participants in the round table discussion agree with this, but the burning question is how to achieve that balance?
One useful tool in assessing the maturity of a company’s approach to S&OP is the Gartner S&OP Maturity Grid. According to Martijn Lofvers, Chief Editor of Sup- ply Chain Magazine, conversations with Dutch companies suggest that many of them are still at stage 1 (‘reacting’) or stage 2 (‘anticipating’) or somewhere between the two. Many participants around the table affirm that they are still struggling with balancing demand and supply tactically. Only a handful of those present say that their companies, or one or more divisions, are at stage 3 (‘collab- orating’) or stage 4 (‘orchestrating’). “At Medtronic, the stage of S&OP maturity varies per division,” says Director of Sup- ply Chain, Frank Schaapveld. “This can be apportioned to the diversity between the business models, to supply and demand volatility, and to the organisational struc- ture of the different divisions.” The S&OP process is often separate from the annual budget cycle, and there can be confusion about the Key Performance Indicators linked to the process. Another
challenge is that the various colleagues involved want to discuss matters at different levels of detail
and work with different planning hori- zons. “How can companies move from a volume-driven supply and demand align-
ment to a profit-driven S&OP process in that kind of situation?” wonders Maarten Bánki, Design and Implementation of Global Sales & Operations Planning at FrieslandCampina. According to Chase, it is necessary to have a planning hierar- chy in place in order to arrive at just one plan and one version of the truth. “Other prerequisites are an effective governance structure with clear roles, an understand- ing of responsibilities and mutual agree- ments.”
Breaking the habit
FRITS SCHAAFSMA (DANONE): “S&OP is different voor each organisation and even each region.”
Frits Schaafsma, Supply Chain Director at Danone/Numico, comments that it is important for the supply chain depart- ment to speak the company’s language: finance. “Talk in terms of turnover, costs, profit and loss,” he says. Several partici- pants are experiencing communication gaps within the S&OP process due to their various internal departments speak- ing different ‘languages’. It is also proving difficult to break the habit of functional thinking. Furthermore, the characteristics and priorities vary per department, as do the dynamics and scope of the planning process; the sales department talks in terms of turnover per product group or customer group, production in terms of capacity planning, supply chain in terms