Gerard de Bruijn, formerly of Bavaria: ‘A lack of good executive leadership will result in good people leaving the company.’


lse van Koetsveld, Wessanen: ‘It’s difficult to talk to Sales about volumes if they are mainly focused on turnover.’


Anouk Wissink, Vezet: ‘Our challenge isn’t to optimize the margin, but rather to achieve the necessary delivery performance.’


employees and inefficient supply chains. If no decisions are made at senior level, or if the decisions keep changing, that results in smaller-scale, isolated decisions that have a big impact and generate lots of unnecessary costs – such as too much inventory of the wrong product, or vice versa. “In the ensuing day-to-day chaos, people then become stressed and feel unsupported, causing good employees to leave the company,” said De Bruijn. Therefore, companies must have realistic objectives and a realistic strategy as well as an appropriate internal organization, including support from a decisive board. Besides that, clear, open and extensive communication is essential. De Bruijn is an advocate of a setup in which the com- pany’s IBP leader reports directly to the CEO or, if necessary, the CFO. “And in companies where the S&OP leader nor- mally reports to the supply chain director, that can mean a significant mindshift.”


Right competencies 22


Syncronic, a Danish consultancy firm, advises companies not to embark on IBP too quickly, but rather to first make sure that they have a mature S&OP process. The firm sees plenty of companies which, although they say they have implemented


S&OP, still make it mainly Supply Chain’s responsibility in practice. “For IBP it is essential to involve Finance in the meet- ings, but that’s difficult if Sales isn’t fully on board,” says Fredrik Olsson, founder and managing partner of Syncronic. It helps to formulate joint KPIs to break down silos within organizations, and especially also to get Sales on board. “Sales is often only focused on the top line of the balance sheet – the turnover – but IBP’s focus is on the bottom line – the profit margin that remains once eve- rything else has been factored in. Includ- ing the bottom line in the KPIs stimulates Sales to pay more attention to that too,” comments Henrik Knak, a partner at Syn- cronic.


The two men point out the importance of a long planning horizon, preferably 24 months. Making the right long-term choices requires the ability to look far ahead at things like the market develop- ments, the available production capacity and new product introductions. “Besides leadership and top-management sponsor- ship, it’s also important to have the right people with the right competencies lower down in the organization. Demand plan- ners not only have to have good analyti- cal skills, but must also understand the


business. They also have to understand how the tools they use work. We often see that an S&OP process relies heavily on an Excel application that has been created by one of the employees, but if that employee leaves – for whatever reason – no one else knows how the application works or has been set up,” continue Olsson and Knak.


More buy-in


Wessanen, a fast-growing manufacturer of organic food products, took its first step towards IBP last year. The company had already implemented S&OP, but realized three years ago that it needed to breathe new life into the process, which meant redefining all tasks and responsibilities. “Once that process was up and running, we reached the conclusion a year ago that we were ready for the next step. So now Finance has been given a seat at the S&OP table too,” says Ilse van Koetsveld, Director Supply Chain Transformation at Wessanen.


Up until that point the annual budget rounds were the only occasions that sales & operations planning was linked to the financial consequences. “Now that the underlying process has reached maturity, it’s the right time to make the financial implications of our choices a fundamental


SUPPLY CHAIN MOVEMENT, No.29, Q2 2018


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