<!––>The statistics are certainly disappointing: Two thirds of organizations with an S&OP (sales and operations planning) process find themselves stuck at the lower levels of the S&OP maturity curve.

In my experience, one of the prime causes of S&OP failure is misplaced ambition. Too much ambition in terms of how quickly progress should be achieved. Far too little ambition in terms of what can, ultimately, be achieved.

Take for example a large enterprise with production facilities across several countries. Some of its products are almost identical, making it possible for a facility in one country to fulfill demand in another. Other products are unique to facilities which fulfill demand across the entire region.

Each country has a supply chain manager, and their collective challenge is to align forecasted demand with production capacity. They achieve this with a weekly conference call where they look at each other’s spread sheets and agree on how to allocate demand across various facilities.

In this scenario, they arrive at a ‘solution’ without full visibility into:

• Where the bottlenecks are
• The impact on the supply chain
• Whether or not it’s the most profitable option

Of course these supply chain managers realize their method is far from ideal. The question at the top of their mind is one shared by many of their peers: “How quickly can we move up to the next S&OP maturity level?”

Wrong question.

Or rather, a short-sighted question because it fails to take the desired end state into account.

For example, implementing a system that provides visibility into production capacities would be an obvious improvement in the short term but could be disastrous if there were no way of building on this capability to move further up the S&OP maturity curve.

Which brings me to my first tip: Think big – not just in terms of what you’re aiming to achieve with your S&OP process but also in terms of the supply chain planning platform that will support your progress all the way to S&OP maturity.

My second tip – take small steps – reflects the fact that S&OP maturity is a process rather than a one-off ‘big bang’ event.

Bearing in mind that any point solution should be part of a comprehensive supply chain planning platform, here’s my one-step-at-a-time advice to those supply chain managers.

Step 1: Improve visibility

Keep up those weekly conference calls but replace your spreadsheets with a planning system that maps demand and capacity directly. The system should flag bottlenecks instantly and enable you to explore the impact of various supply-demand scenarios within seconds. What are the consequences of moving production to another facility? Should you change capacity by adding or removing shifts? Should you tweak production dates? An effective planning system will help you answer these questions swiftly and accurately.

Step 2: Improve the intelligence of the planning system

In addition to enabling you to explore scenarios easily, the system should also offer optimal solutions based on sales forecasts and production capacities. These solutions will then form the basis of those weekly conference calls.

Step 3: Achieve full integration

This is the goal: a single supply chain planning platform that connects sales, production, procurement and finance, and enables sales managers to make profitable, accurate delivery promises within seconds.

S&OP maturity can be achieved if you begin with the end in mind and keep making progress – one step at a time. To learn more about avoiding the pitfalls, download your free briefing, “Top 4 pitfalls of S&OP implementations” now.