Why a digital S&OP process should be your top priority

Since the Covid-19 outbreak, manufacturers and distributors face demand and supply chain uncertainty on a scale never previously experienced.

Balancing supply and demand under these circumstances is a major challenge, and with a heightened focus on safeguarding company cash flow, there’s less room for planners to maneuver. Building stock to absorb future dips and spikes in demand is not always an option.

Navigating these waters is tricky, but it becomes nearly impossible without the right tools and processes.

This was the backdrop to the recent webinar “Digital Sales & Operations Planning in Times of Unrest” hosted by Supply Chain Effects Magazine, where Patrik Färdow, a seasoned COO with a career spanning major consumer products companies such as Kraft, Coca Cola, and Orkla Foods, and Erik Sandberg, Managing Director of Optimity Sweden, came together with Stefan Karlöf, Editor-in-Chief at Supply Chain Effects to discuss the importance of digital sales and operations planning in these volatile times. You can watch the webinar on-demand here.

First up, what is digital Sales & Operations Planning?

A digital S&OP solution supports all stages of the sales and operations planning process. It includes forecasting and demand collaboration tools to build a consensus demand plan and production and distribution planning capabilities to optimize everything from capacity and shift schedules to inventory pre-builds.

Digital S&OP also provides real-time analytical capabilities to help identify issues in the supply chain, thereby helping stakeholders to focus on the most pressing issues. Add to this the ability to simulate the impact of key business decisions before making the actual decisions, and you have the basis of a digital S&OP platform.

Why digitalizing your S&OP process can’t wait?

There are several inherent problems with “traditional S&OP“, many of which expose businesses as they try to navigate the turmoil caused by the pandemic. It comes down to the lack of speed, accuracy, and availability.

Ensuring your S&OP process is fully digitalized on a platform designed for the task and can serve as a complete supply chain system of record, all three of these issues can be addressed.

1. Speed

In times of rapid change, few business processes are as important as S&OP. This is where representatives from all business areas come together to align commercial, operational, and financial decisions to maximize business performance.

However, S&OP is an iterative process and can often be very time-consuming. This is a problem when so many critical decisions have to be made quickly. By digitalizing S&OP, many process steps can be automated. Communication and information exchanges can take place much more quickly, and the process can deliver more timely results.

2. Accuracy

Companies are currently watching as traditionally stable and predictable demand patterns are erased. While some have suffered a major drop in sales, others have seen an increase in demand but have to deal with major shifts between product categories and regional and national markets.

To manage these swings, companies need to tap all potential sources of information. A collaborative demand planning effort – where local expertise is included – can make all the difference.

Also, when all data required for S&OP is available on a secure and common platform, the contributors feel much more assured that the information they are looking at is both accurate and consistent with what everyone else is seeing. With track and trace capabilities for every change made, there’s a clear record of who’s provided what input, when it was done, and why.

With the current pace of change, this transparency is key to maintaining accountability and trust in the information, and ultimately the resulting plans.

3. Availability

The sheer number of people involved in S&OP makes the process sensitive to peoples’ availability. With many of us now working almost exclusively from home and with more people than normal away on sick leave, this can cause major delays or even grind things to a complete halt. This can have serious consequences, as important business decisions will have to be made based on partial information or none at all.

A digital S&OP process removes these issues as every stakeholder can participate fully and effectively from any location.

To hear Patrik, Erik and Stefan discuss this and to see digital S&OP in action – click here.