Getting Sales & Marketing on Board with S&OP

Getting Sales & Marketing on Board with S&OP



Talking recently with my S&OP mentor, Bob Stahl, he mentioned that at a recent conference on forecasting, he heard the keynote speaker say, “…we should spend less time trying to precisely predict the future, and more time preparing for its inevitable variability.”



This statement got me to thinking: the reason Executive S&OP has gotten such traction is that it does just that; it provides a tool that allows companies to better see the future with its uncertainty and variability in a way that they can better prepare for it. Executive S&OP not only looks at the demand side of the business but converts that picture into resource needs and financial consequences, without knowing full granular detail for the full horizon.



Here are some of the things that make that possible: 
  • Using “Market-Facing” Family definitions enables correlation to extrinsic market indicators resulting in a more reliable forecast.
  • Eliminating the need for full granularity of the forecast over the entire planning horizon (which may be up to 24 months). 
  • Using “simplifying data assumptions” about the detail to convert the forecast into resource and financial projections. 
  • Not using complex software with its attendant long learning curve.
  • Using a clear and defined process, rooted in data, in a disciplined and cross-functional way.

When Sales & Marketing doesn’t fully understand how Executive S&OP works, they often run, not walk, from the forecasting task. That’s because they think that they will once again get flogged for inaccurate forecasts. 


In my experience, once they do understand how Executive S&OP works, they join the effort willingly and enthusiastically, making a huge contribution. Following an effective implementation, one Sales & Marketing executive said:

 “Unlike before, the sales & marketing people have full confidence that the supply and finance people are working with one agreed upon demand number, and that demand number is known to everyone. It allows and supports easy and rapid scenario analysis that deals with the risk and consequence of various alternatives, enabling leadership to be proactive versus reactive.”


Properly and effectively done, Executive S&OP can enable companies to achieve results not before possible. The “trick” is to do it properly and effectively!

____________________________________________________
About FarStar: FarStar is boutique consulting firm with a focus supply chain transformation, of which a key lever is Sales & Operations Planning. With team members located in Canada and the US, the company has extensive experience across a wide range of industries including aerospace, defence, high-tech/electronics, and industrial products in a variety of business environments, ranging from make-to-stock to engineer-to-order.


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