How’s Your S&OP?

That's a question we put to readers of SCMR. The answer: We can do better.

By Bob Trebilcock & Judd Aschenbrand

Bob Trebilcock is the editorial director of SCMR. He can be reached atbtrebilcock@peerlessmedia.com. Judd Aschenbrand is the research director of Peerless Research Group. He can be reached jaschenbrand@peerlessmedia.com.

July 08, 2016

Matching inventory with demand has never been more important. Yet, with all of the tools at our disposal, too many manufacturers and distributors still find themselves with too much of what customers don’t want and too little of what is selling.

You would think that sales and operations planning, or S&OP, would be both widely deployed and the answer to supply chain managers’ prayers. Indeed, companies likeRed Wing Shoes have realized impressive results after streamlining their S&OP process. Yet the theme running through articles we’ve published in SCMR from Bain & Company and Hughenden Consulting, too often S&OP results are falling short of expectations.

What has been the experience of readers of SCMR? To find out, Peerless Research Group surveyed our readers. Here’s some of what we learned.

1. Only a slight majority have adopted

While you might think that S&OP is ubiquitous, only 57% of respondents have adopted S&OP. The remainder are assessing their needs or considering adoption in the next year.

2. It’s good news, bad news

Here’s the good news: Nearly 21% say their S&OP process is highly effective. A similar number – 17% say they’re not realizing much, while a 62% majority say their process is somewhat effective at best. Clearly there is room for improvement.

3. Hope (for improvement) springs eternal 

Respondents appear to recognize the potential for improvement in customer service (67%), overall supply chain improvement (66%), information accuracy (61%), better management of company resources (59%) and improved on hand inventory levels (58%).