[Reblog] How to Integrate Financials with S&OP

A few days back, well-known S&OP / IBP consultant Stephen Crane posted an article on LinkedIn entitled "How to Integrate Financials with S&OP." It was refreshing for us here at River Logic to see this type of post coming from someone like Stephen — a big voice in the S&OP / IBP space — as this is a concept we've been trying to push for years now.

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An S&OP Expert Interview Series by Niels Van Hove

Over the last month, Sales and Operations Planning (S&OP) and Supply Chain expert Niels Van Hove has published a series of expert interviews on his blog, Supply Chain Trend. The goal was to understand where S&OP stands today and what each interviewee's view is for the future. Below is a list of the 5 interviews he conducted with a link to each, as well as an introduction on why Van Hove chose to conduct this series on S&OP.

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Sales and Operations Planning is Still the Best Way to Manage Global Supply Chains

The evolution of linear supply chains into global demand-supply networks has been happening over the last two decades. Companies have benefitted from low cost supply of labor as well as raw materials to bring down the Cost of Goods Sold for the products that they manufacture. This has resulted in bottom-line profits.

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An S&OP Communication Plan: The Final Step in Support of Company Strategy

Occasional River Logic guest blogger and global supply chain influencer / expert Niels Van Hove recently published an Sales and Operations Planning (S&OP) commentary in Foresight Magazine's Summer 2016 edition. Entitled An S&OP Communication Plan: The Final Step in Support of Company Strategy, Niels makes the argument that without frequent and systematic company-wide communication, S&OP goals will remain largely unmet, despite advancing levels of S&OP maturity within a particular business or enterprise.  

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Beyond S&OP and IBP ... A Commentary on the Need for New Technology

In his article in the previous issue of Foresight, Dean Sorensen (2016) argued that while there is increasing complexity in business environments, there has not been enough focus on tying strategy to execution. I am in agreement with him: I think the biggest systems integration challenge facing CEOs is how to seamlessly tie strategic decision making to operational execution (Sales and Operations Planning). 

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What-if Analysis: 3 Applications in the S&OP Process

While embedding financials is the bedrock for expanding the value from S&OP, adding robust what-if analysis capabilities can unleash its maximum potential, thus delivering true Integrated Business Planning.

What-if analyses allow users to evaluate alternative strategies, policies, and tactics to maximize their revenue, profit, and working capital performance while delivering on service level commitments and properly considering risk and supply chain constraints. Over the past year, we’ve discussed this topic with current and potential customers and partners. We’ve found companies tend to be fairly clear in articulating their business needs. Surprisingly though, S&OP managers have more difficulty articulating the technology capabilities required to deliver on the business need.

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Five Key Questions a Successful S&OP Process Strategy Should Ask

Sales and operations planning has been around for decades. At the time it was created, the emphasis was on setting up a process that would facilitate collaboration between the commercial departments (e.g., sales, marketing) and operations (e.g., manufacturing, procurement, inventory, distribution). The objective of this collaboration was to agree on one plan, such that the company made the products it was planning to sell in the most efficient manner.

Existing silo-based technology was adapted to support the S&OP process. Whether it was the early spreadsheets, demand/supply planning systems that incorporated more advanced algorithms, or collaboration tools that act as a system of record, the focus was on driving sequential refinement of decisions along the process.

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Supply Chain Brief