When someone decides to embark on implementing Sales, Inventory, and Operations Planning (SIOP), one of the first questions they ask themselves is, “Can we do this on our own? Or do I need help?”

In other words, they’re asking themselves, “Do I need a consultant to implement SIOP?”

These are great questions.

In this article, we’ll explore:

What is SIOP?

Before we begin, let’s define SIOP.

Sales, Inventory, and Operations Planning (SIOP) is a dynamic and predictive process that proactively forecasts customer demand and translates these sales forecasts into capacity, operational, supply chain, and financial plans while integrating and aligning with forward-looking strategic supply chain decisions, inventory and profitability projections, and across all business functions.

SIOP focuses on balancing supply and demand, optimizing inventory levels, and enhancing operational efficiency to drive profitability and growth. It also provides a predictive view into operational (machine, labor, storage, logistics), supplier and capacity requirements across your end-to-end supply chain so that key strategic decisions can be evaluated such as make vs buy, reallocation of production, pricing and lead-time strategies, etc.

By leveraging real-time data and cross-functional collaboration, SIOP helps organizations adapt to market changes, reduce costs, and improve customer satisfaction. It is a crucial tool for achieving resilience and scalability in today’s competitive landscape. 

Why You Need a SIOP Consultant or Internal Expert for Implementation

We recommend engaging a SIOP consultant or utilizing an internal expert throughout your SIOP implementation journey. Although it is always preferred to have a project leader that is capable of facilitating, leading, and navigating through a SIOP design and rollout, it is essential that the leader is capable of tailoring the design and rollout on the fly to maximize customer value and bottom-line results. Successful SIOP rollouts become supply chain transformations from gaining insights into future demand through the entire order fulfillment process inclusive of the use and modernization of ERP and related technologies. Thus, do not leave them to chance.

A SIOP expert is someone who has not only been intricately involved in multiple successful SIOP implementations but also has significant business process and systems transformation expertise. To be considered an expert, they must have developed SIOP designs for complex business situations and have held a significant leadership role in guiding the implementation process. And, most importantly, they must understand and can incorporate supply chain strategies, lead ERP and advanced technologies optimization, understand financial and cost implications, and work effectively with people of all layers of the organization and with data from multiple, frequently disparate systems. You might already have such experts within your organization if they have substantial and successful SIOP experience, possibly from a sister division or a different company.

For example, at a building products manufacturer, the COO brought in an outside SIOP consultant to lead the SIOP design and rollout. The COO became the executive champion and worked closely with the consultant to achieve significant success with SIOP. Later, the COO transitions to a smaller aerospace manufacturer as CEO and effectively takes on the SIOP expert role, leveraging his prior experience to drive success.

On the other hand, it is not common for this expertise to be readily available in-house. In our experience, it falls into the “20” of the 80/20 rule. In these cases, you will need to source your SIOP expert from among seasoned consultants focused on manufacturing and supply chain management with a specialty in demand and supply planning. For example, our firm, LMA Consulting brings these key elements together with its core service offerings.

These professionals are not novices; they bring years of experience both in business leadership operational roles and as consultants, and they possess the ability to communicate effectively with top management. 

What Reference Questions to Ask a SIOP Consultant

When seeking outside SIOP support, it is essential to thoroughly vet potential experts and check their references. What is important is to get someone with end-to-end supply chain and SIOP experience to talk with the potential consultant as the devil will be in the detail. You will need to ask questions about the design to understand if the consultant has the background and capability to figure out what to do, how to maximize success, and how to pivot with changing conditions. If you do not have a person like this in-house, consider bringing on an expert to help with the interview as SIOP will impact your customer, profitability and cash flow. 

Here are key questions to ask a SIOP consultant:

  • Have you participated in multiple SIOP implementations? Ask him/her to describe the companies, situations and rollouts. 
  • Dive into detail on at least one SIOP implementation. Ask him/her to take you through the assessment, design, pilot, rollout, issues, solutions, and results.
  • What results were achieved? Ask him/her about what results occurred across SIOP projects and what does he/she think was most important in achieving the results.
  • What specific roles did you take on during those implementations? Ideally, you will want someone who has not just led a project but has also delved into details of both demand and supply.
  • How did you get Sales to give you information?
  • How close was your capacity information to reality? How do you know? What was your biggest challenge with the Operations team?
  • Did Purchasing participate in the project? Did you gain a materials forecast? How did you achieve this?
  • Did you have a challenge in getting Sales and Operations on the same page? How about Finance? R&D? Etc. Ask him/her to describe the situation and how it was addressed.
  • Do you follow a structured process or methodology for implementing SIOP? If so, describe it. Did you have to tailor the process? If so, how?

In addition, ask for references and /or testimonials. 

Why SIOP Issues Often Don’t Revolve Around the Process Itself

You might be wondering, ‘Why is this such a big deal? The SIOP process appears quite straightforward.’

Indeed, the basic logic and process are simple and based on common sense, as we outline in our ebook SIOP (Sales Inventory Operations Planning) Creating Predictable Revenue and EBITDA Growth. However, it’s easy to underestimate SIOP’s simplicity. The monthly cycle is something you could assign anyone to facilitate, and the information appears as though it would be simple to get (forecast, machine workloads, etc.). In fact, most clients tell us that they already track much of the data and information we request. We ask them to humor us as the value will become apparent as you experience the process and start relying on it for key decisions. 

The powerful value of SIOP is to gain confidence you are tracking the “right” information and trends in a directionally correct way so that you can use it to make critical strategic decisions (make vs buy, consolidating facilities, expanding product lines, updating pricing, customer and product profitability). To achieve this result, > 90% of the time, you are actually pursuing a business process and systems transformation designed in a way so that you can gain quick wins and deliver tangible results on a quarterly basis. Thus, you’ll need significant expertise in sales, quoting, CRM and order management, supply chain, operations, inventory, the use of ERP and related technologies, data management, financial impacts, and business systems and process upgrades.

Equally important is to get each of your functional leaders on the same page to align on the sales forecast and agree upon the appropriate strategies and operational plans to maximize customer value and deliver bottom line results. Typically, companies perform in silos and focus on achieving individual goals instead of looking at the big picture where one function might deliberately perform worse to its goal in order to achieve a greater company goal. To achieve this alignment, trust in the SIOP process and the engagement of all key functions is of paramount importance. As this occurs, results accelerate faster than predicted 100% of the time. Thus, strong leadership and SIOP support is required.

In summary, successful implementations significantly benefit from the involvement of a SIOP expert or consultant.

Why You Might Want to Hire a SIOP Consultant (Even if You Have an Internal Expert)

Even if you have an internal expert to help with SIOP, it might be a good idea to secure an outside consultant anyway.

Why?

  1. Objective Perspective: A consultant provides an outside and objective pair of eyes on your processes. Internal experts may be too close to the existing systems and workflows to identify opportunities for improvement. A consultant brings a fresh, unbiased viewpoint, helping you uncover blind spots and implement more effective strategies.
  2. Best Practices and Benchmarking: Consultants bring a wealth of knowledge and experience from working with a diverse range of companies. This exposure allows them to provide best practices and innovative solutions that your internal team might not have encountered. By leveraging their extensive experience, consultants can incorporate additional design elements into your SIOP process to maximize results, mitigate risks and develop strategies to overcome bottlenecks that drive superior results.
  3. Enhanced Focus and Speed: Internal experts often juggle multiple responsibilities, which can dilute their focus on the SIOP implementation. A dedicated SIOP consultant, on the other hand, can concentrate solely on ensuring a successful SIOP project and accelerate progress and results. Their specialized knowledge, streamlined approach and ability to pivot seamlessly will accelerate the process, allowing you to realize the benefits of SIOP sooner.
  4. Proven results advisory: A SIOP consultant can be similar to an insurance policy. As decisions need to be made, changing conditions arise, bottlenecks occur, and potential delays arise, relying on an expert that has “been there and done that” before can be invaluable to maintaining momentum, overcoming obstacles, and keeping the focus on practical results.

    Assuming you work with a good SIOP consultant, the project will fund itself and achieve a powerful return on investment.

    How to Hire an SIOP Consultant

    Hiring the right SIOP consultant can make a significant difference in the success of your Sales, Inventory, and Operations Planning implementation. Here are key steps to ensure you make the best choice for your organization:

    1. Assess experience: Look for consultants with a proven track record in demand planning/ sales interaction, supply chain, manufacturing, technology, and SIOP across multiple industries. They should have substantial experience both in leadership roles and as external advisors. Most of these areas of expertise are covered in our article on how to hire a supply chain consultant.
    2. SIOP maturity expertise: Find a consultant that specializes in SIOP who can clearly discuss all the stages of the SIOP process from assessment, design, pilot, implementation, and creating sustainability. 
    3. Business maturity expertise: In addition, search for a consultant with extensive experience in driving business process and systems transformations. These experiences should include process upgrades, better utilization of ERP and related technologies, the rollout of advanced technologies, and the creation of data analysis and/or automation tools
    4. Technical capabilities: The SIOP consultant should understand enough about ERP and related technologies, data management, and developing reports/ coding to steer the process effectively. 
    5. Review references: Confirm the consultant’s expertise by reviewing testimonials and references to verify success and effectiveness.
    6. Evaluate Methodology & Approach: Although following a standard methodology can be helpful, what is more important is the consultant’s approach to ensuring quick wins, quarterly results, and his/her ability to incorporate changing conditions. Success requires a standard framework with the agility and expertise to know when and how to pivot.
    7. Cultural Fit: The consultant should align well with your company’s culture. Effective communication and collaboration are crucial, so a good cultural fit can enhance the overall implementation process.
    8. Collaboration & facilitation capabilities: No matter the client, there will be misalignment or disagreement between functions and/or people somewhere during the SIOP journey, and so you’ll need an expert who knows how to resolve these types of issues, align people with win-win objectives, and gain engagement throughout the process.
    9. Schedule a Consultation: Before making a final decision, schedule a consultation to discuss your project in detail or request a SIOP workshop for your executive leadership to gauge their expertise, approach, and, most importantly, their ability to deliver results. For example, LMA Consulting offers Supply Chain Power to close this loop and provide a jump start. 

    At LMA Consulting Group, we specialize in SIOP rollouts that drive results and profitable growth. Our seasoned experts bring years of experience in leadership roles and as consultants, ensuring your SIOP project is successful and delivers powerful results. 

    Ready to Take the Next Step?

    We invite you to sign up for a complimentary 30-minute call with one of our SIOP experts. During this call, we will:

    • Discuss your specific SIOP challenges and goals
    • Provide insights into our approach and methodology
    • Determine how we can best support your SIOP journey

    Don’t miss this opportunity to gain valuable insights and start your path to success with SIOP. Schedule your complimentary discussion now.