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Projects: Sales & Operations Planning

August 12th, 2008 Comments off

During a career we can look back & recall projects that shaped our experience level and positioned us better to take on new challenges presented in our career. Some of those projects also involve pulling together such a large group of folks that it simply eclipses any “projects” you might have encountered during your B-school stint. For myself, one of these projects was the Sales & Operations Planning (S&OP) implementation that was started during our integration with APC. This was a project that was kicked off with a North American meeting that pulled together approximately 40 key individuals throughout NAM and was introduced by the company President. There were also other global kick-off meetings that happened in the other regions. This was a major corporate effort.

As the company moved farther into the implementation process, it became clear that there were going to be some major challenges to effectively integrate our two entities and leverage our operational resources. However, in the short-term, there were a number of issues to address. At a consolidated level, there were a number of potential concerns in this $6.5b merger. Primarily:
1. The potential for declining customer service levels.
2. Inaccurate sales forecasts.
3. Declining product margins.
4. Rising inventory levels.
5. Misaligned performance metrics.

Any one of the potential areas of risk listed above had the ability to materially effect our results and compound an already difficult integration process. As we kicked off the meeting, this was a process that many were not familiar with and there were only a few that had gone through a similar situation with previous employers. The meeting was focused on covering some key areas such as:
1. Why were we implementing S&OP? What are some the signs that would signal such an effort?
2. Conduct and overview of S&OP and the efforts we should anticipate would be necessary.
3. We needed to review the common terminology that would be utilized globally in this effort.
4. We need to review the necessary roles & responsibilities for this effort and individuals assigned.
5. What was the anticipated timeline?

It’s pretty apparent from just this topline synopsis that this is not a multi-week project. This was a project that was anticipated to take the better part of a year to complete and fully implement. This was a project that was going to involve just about every functional area in the organization and had an equally opportunistic ability to improve our financial results and improve our working capital performance. I do plan on covering the elements of this implementation in more detail in further postings. If you have participated in an S&OP implementation I’d love to hear from you…

Thanks for reading . . . .