How to Improve Your S&OP Process

To meet revenue and profit goals, companies need a strong process for sales and operations planning (S&OP). However, the S&OP process can be surprisingly tricky.  

The task seems simple enough: take goals and information from each department – sales, marketing, development, manufacturing, sourcing, and finance – and create one plan for everyone to follow. However, many companies struggle to create a cohesive plan.  

Common S&OP challenges  

  • They operate in silos, and each business unit creates their own plan based on competing interests and inaccurate information. As a result, companies don’t get the full picture.  
  • They rely on Excel to enter, track, and share department information. This manual process is cumbersome, time-consuming, and prone to error.  
  • They try to accomplish too much and create a plan that lacks focus.  
  • They struggle to find the optimal balance between lowering production costs, minimizing inventory, and providing great service.   

Sound familiar? If you’re like many companies, you’ve worked through at least one of these challenges in the S&OP process. And the resulting plan may have fallen short, leading to inventory issues, production snags, or unnecessary expenses.  

So, what does a strong process look like? 

A strong S&OP process is one that addresses organizational risks to maximize operational success. It can help you: 

  • Better focus on P&L and balance sheet impact  
  • Get a full view of the market lifecycle
  • Create accurate demand plans 
  • Improve supply chain resiliency 
  • Mitigate risk

How to improve your S&OP process  

The benefits of a strong process are clear but creating one can be tricky. Here are a few things you can do to improve your S&OP process.  

Align goals across all departments. The traditional planning process is disjointed and siloed and often leads to competing goals. To get the full picture, you need expertise from stakeholders across the company, and you need their buy-in on the final plan. By creating “one set of numbers”, or one integrated plan, employees will be more invested in its success.  

Make it easier to share information. Many companies rely on Excel to enter and distribute information among departments, a process that can take several weeks. Not only is this process tedious and time-consuming, it’s also vulnerable to error. One typo can throw off forecasting or create inaccurate assumptions. The more you can simplify or streamline the way you share information, the better.  

Focus on your core competencies. A core competency is a specific way your company or employees work to gain a competitive advantage. It’s something that’s not easy for competitors to imitate, it’s reusable for many products and markets, and it adds unique value to your product or service. To create a clear, actionable plan, try to focus on your top one or two core competencies. Don’t try to do everything at once.  

Tie your plan to financials. Despite its name, the S&OP process shouldn’t only include people directly involved with sales and operations. While some companies overlook financial executives, these experts can help standardize key performance indicators and show how a decision may financially affect the company. Finance can also play a key role in managing risk and helping the company strike an optimal balance when it comes to competing priorities.   

Need help?  

Many manufacturers know their S&OP process needs to improve but aren’t sure where to start or how to fix problem areas. Together with our partner OneStream, the experts at MCA Connect can help.  

MCA’s unique S&OP service begins with an assessment process to determine S&OP readiness. We then provide best practices education, assist in establishing the required process ownership, and refine the process based on a company’s unique needs. We also work alongside channel management to break down internal barriers and remain engaged through the first completed S&OP cycle. In short, we figure out exactly what you need to do, show you how to do it, and support you every step of the way. 

With more than 20 years of manufacturing experience and expertise, MCA Connect’s strategic advisors are well-equipped to create an S&OP tailored to your business. We align people, processes, and technology to help clients achieve their goals as efficiently and profitably as possible. 

OneStream is a software tool that unifies corporate performance management processes such as financial consolidation, reporting, planning and analytics through a single, extensible platform. With it, your employees can break away from the limitations of Excel and manage all of their information in one place.  

To learn more about the ways MCA Connect and OneStream can improve your S&OP process, contact us today.  

MCA Connect