The full benefits of SIOP (Sales, Inventory & Operations Planning), also known as S&OP, blossom when it is treated as an organization-wide strategic initiative instead of a narrower supply chain project.

Although supply chain and operations resources typically coordinate the SIOP process because their skills align closely with the planning processes, SIOP succeeds when it becomes an organizational priority. At its core, SIOP focuses on two areas:

  • Aligning demand with supply
  • Aligning Finance and the functions that influence or are impacted by demand and supply around one plan

Thus, SIOP cannot be successful as a supply chain project alone. The appropriate resources should be involved throughout the process, including:

  • Resources related to demand – Sales, Marketing, Customer Service, R&D, New Product Development, customers, and other resources that provide insights into future demand and changing customer requirements.
  • Resources related to supply – Manufacturing and Operations, Planning, Procurement, Logistics, Quality, Engineering, outside processing partners, suppliers, and other resources required to fulfill demand.
  • Resources related to financial and business performance – Finance, executives, and other leaders focused on revenue, profitability, cash flow, working capital, inventory, customer service, and overall business performance.

Sales, Operations, Supply Chain, and Finance team members are essential to providing inputs, feedback, and insights and aligning on priorities and execution. For example, if the SIOP process determines that overtime, additional employees, equipment, inventory, or outside capacity will be required to support customer demand, Finance and the executive team must be aligned with those decisions and their financial implications.

Bringing the appropriate resources into the SIOP process on a weekly and monthly cadence creates cross-functional alignment around customer demand, supply capabilities, financial objectives, and business priorities. Not every resource needs to participate in every meeting; however, the right inputs, expertise, and decision-makers must be incorporated at the appropriate points in the process.

Once you have the appropriate resources involved, the key is to align them around one plan — the “secret sauce” to SIOP success. If you are interested in learning more about achieving results with SIOP, review our SIOP results by the numbers, read our book, SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EBITDA Growth, or contact us for a complimentary SIOP readiness discussion.

 

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