Ventana Research: Sales and Operations Planning Process Scores a 'C'

     

Ventana Research has released its Sales and Operations planning (S&OP) Dynamic Insight research which gives companies an opportunity to self-assess their S&OP, or Integrated Business Planning process.

More than half of the companies participating gave themselves a “C” grade for this core business process, citing several key complaints:

  • No data
  • Bad data
  • Lack of organizational participation

A whopping 68% of companies say that the lack of data or bad data is a problem for them when it comes to S&OP.  And that fact chips away at confidence when it comes to trade-off considerations such as knowing supply availability, utilizing inventory investments, and others.

Scoring another ‘C’ grade is the subject of participation. Thirty percent of respondents lament that more participation across the enterprise is needed in the S&OP process to include functions like sales and marketing, manufacturing, logistics, finance, and senior management. In fact, leadership’s support is critical to collaboration since almost 75% of surveyors say that leadership participation is necessary to S&OP being executed well or very well.

Supply Chain Planning Insights

An ‘A’ insight from the report worth noting involves the frequency of planning. Like any discipline, practice makes perfect. That applies to frequent S&OP, which 64% of respondents said their companies managed well or very well. These once-a-week planners make the better grade, showing that attendance to planning frequently matters.

Another ‘A’ comes in the form of being able to drill down on the details. One in four companies said they could immediately access the data behind the results, allowing a better understanding of the next best steps.

Finally, the research prompts Ventana to recommend that a dedicated supply chain planning software be used for S&OP. For a plan to best map to the organization’s strategies, accuracy is needed; yet, half describe their S&OP as somewhat accurate.

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Ventana goes to note what is common knowledge: Almost always, spreadsheets lack the power and flexibility to do the job well.

River Logic sees the challenge its customers have had with using spreadsheets for S&OP as well. A recent success story revealed that a snack foods industry customer used more than 20 spreadsheets for its S&OP planning, missing out on significant profit opportunities until they began using the River Logic prescriptive analytics platform.

Robert Kugel, Ventana SVP & Research Director, sums it up best, “I recommend that all midsize and larger companies look into using a dedicated application rather than spreadsheets for managing the S&OP processes.”

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