Last week I volunteered to give up a day of vacation to facilitate the Sales and Operations Planning (S&OP) IE event in Las Vegas. I like to facilitate groups, so I was looking forward to the day. As the session progressed, I had a realization that the audience was asking the wrong questions. They went on, and on, and on, and on.
I did not have the time or the energy to turn the tide, but I write this blog so that you can ask the right questions. What do I mean? Please read on…
Sometimes, when I facilitate S&OP sessions, I feel like I am a therapist listening to a group therapy session for people struggling with the victim complex. When you talk to a victim, they always find some way to weave in the fact that they have been victimized into the conversation. They are a martyr for a cause. I feel that many supply chain professions act like a victim when they talk about sales involvement in S&OP. They are a martyr for the operations cause. Their conversations are centered on these questions:
- How do you get sales to give you a better forecast?
- How do you get sales to come to the S&OP meetings?
- How do you drive ownership of inventory with sales?
Let me let you in on a little known secret. You don’t. These are the wrong questions. You will never be successful trying to leverage change from the supply chain team. Especially if you have a victim mentality trying to make sales “responsible for inventory and forecasts.” You will retire <or get fired> before you MAKE sales do anything. Instead, change the conversation. Build a guiding coalition at the profit center level where sales reports. How? Start with the fact that S&OP on average drives a 2% increase in sales. <Now you have their attention. This is something that they care about.> Then make it worth their while…
- How do you eliminate sales bias? Apply lean forecasting approaches to the forecasting process to eradicate sales bias and error. Make all people accountable by understanding the value of their contribution to the forecast.
- What is the role of sales in the forecasting process? Don’t waste their time. Do not ask sales to forecast. Ask them for input on general trends and apply it to the forecast. Sales should never be asked to forecast at an item level.
- How do you get sales to the S&OP meetings? Make it worth their while by making it important to their boss.
- How do you make sales responsible for inventory? You don’t. You make the entire team accountable for inventory as part of the S&OP process.
There are natural tensions between sales and operations. Use the tensions to improve the process. Never wear the cloak of the victim. <No one looks good in that color…>
This week, I am busy writing my book. Let me know if you have any great case studies to share.