What’s the secret to a successful S&OP process?
In this video, we reveal the key factors that drive effectiveness and success.
Watch now to find out how to make S&OP work for you.
The MD’s Role to Effective Sales & Operation Planning
The success of Sales & Operation Planning (S&OP) often depends on one critical factor: the active involvement of the Managing Director (MD). While many focus on processes, data, and cross-functional collaboration, the real difference-maker is the MD’s leadership. Without an engaged and committed MD, even the best S&OP frameworks can quickly lose their impact and fail to deliver the expected results.
The MD’s role is more than just giving approval; they need to be an active force behind the process. With the authority to influence all areas of the business, the MD ensures that S&OP aligns with broader company goals. Unlike department heads, the MD has the power to drive change across functions, making sure every part of the organization is on the same page. Without this top-level support, S&OP may struggle to gain traction and fail to fully deliver its potential.
The MD as the Driving Force
In any business, the MD is the only person who has the authority to influence every part of the organization. This is what sets the MD apart from other executives when it comes to S&OP. Supply chain teams, for example, often handle the analysis and planning for S&OP. They’re experts in data and forecasts, but they lack the power to implement decisions across other departments. Sales, finance, or customer service can be resistant to change if they’re not aligned with the overall strategy, and this is where the MD’s leadership comes into play.
The MD has the ability to enforce alignment across all functions. Their involvement in the S&OP process sends a clear message that the initiative matters to the whole business, not just one department. This broad span of control makes the MD indispensable to the success of S&OP.
Sustaining the Momentum
We all know that without effort, even the best processes can lose steam. This concept is known as the second law of thermodynamics, which states that without input, things naturally deteriorate over time. S&OP is no different. If the MD isn’t putting energy into the process, it can quickly become just another set of meetings with little impact.
But here’s the thing: the MD doesn’t need to invest a massive amount of time. It’s not about spending hours every week in S&OP meetings. It’s about ensuring the process remains a top priority, that it gets the attention it needs, and that it’s positioned as a vital tool for strategic decision-making. When the MD is engaged, the entire company follows suit, ensuring the process stays fresh, relevant, and effective.
A Forum for Decision-Making
Ultimately, S&OP is about making informed, strategic decisions about the future of the business. Without the MD fully owning this process, those critical decisions are at risk of being sidelined. The MD’s leadership helps ensure that S&OP remains the core decision-making forum for the organization.
The success of S&OP doesn’t just come from good processes or the right data. It comes from strong leadership at the top. Without an engaged, enthusiastic MD, S&OP’s potential won’t be realized. It’s the MD’s involvement that makes all the difference.
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Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated February 22, 2023, under the title “ Sales & Operations Planning (S&OP) – The Greatest Success Factor“.
