“IBP makes it easier to weigh up the options by providing clarity about their consequences for the margin.”
Vezet started with S&OP by holding a weekly meeting for the management team, with the primary aim of optimiz- ing the shipping percentage. Wissink: “Just one year later it became clear that we were ready to move to the next level, and we separated the strategic issues from the operational ones. We now have five operational S&OP processes for our four factories: consumer convenience, fruit, convenience food and pre-processing. The relevant production manager, account manager and planner get together once a week to discuss and resolve operational matters. Which promotions are in the pipeline? Which changes are being made to the product range? Are there any capac- ity problems? For the first six months, we held a management-level S&OP meeting every week to monitor this operational process. Now that it is running well, we can reduce the frequency of that meeting to once a month. That meeting is where we discuss strategic issues, such as which capacity do we need in the long term? And should we invest in new production lines or locations?
Low as possible
All four factories are located on the same site in the Dutch town of Warmenhuizen, which makes alignment easier. If one fac- tory needs to utilize the capacity at one of the other factories, that is arranged during the operational S&OP meeting without requiring board-level permission. “We aim to place the decision-making respon- sibility as low as possible in the organiza- tion. That’s where people have the best understanding of which problems there are and how they can be solved. To avoid conflicts of interests, we’ve aligned the KPIs. In the past each department had its own KPIs and they weren’t necessarily in line with one another. Sales was judged on turnover and Production on efficiency. Now, we’ve formulated shared objectives which focus on the shipping percentage. And one director is now responsible for both Production and Supply Chain, for the same reason. That enables us to weigh
up the various interests even more objec- tively,” comments Wissink.
She echoes De Bruijn when she says that S&OP or IBP is not an end in itself: “Whether you call this process ‘S&OP’ or not, as far as we’re concerned it was the only way to meet the high expectations of
our most important customer. S&OP is a method to improve performance, which means that it can be different within each and every company. In our case it’s less relevant to involve Finance in the meet- ings, but it’s essential to have input from Purchasing.”
SOFTWARE FOR S&OP AND IBP
Both Wessanen and Koninklijke Vezet are in the process of selecting a software tool to support their S&OP processes. Until now, Wessanen has been mainly using Excel to consolidate and analyse data from different systems. “That approach was very time-con- suming and also limited our ability to act. We’re now looking for a system that calculates not only volumes but also the associated value. The system must also offer support for scenario planning and workflow management. Now that we’ve transitioned to IBP, even more disciplines have to give us their input before we can align everything. We can auto- mate that whole process by setting up workflows,” says Ilse van Koetsveld.
Vezet concludes that finding the right supporting software is no easy task. Anouk Wis- sink: “We’re looking for good forecasting, planning and scheduling tools, preferably in an integrated suite so that we can access all the information we need for the S&OP meeting at the touch of a button. Forecasting is particularly crucial for us, but the best tools for that job are usually supplied by software vendors who don’t have the best overall supply chain software suite. So we’re now deciding whether to go for a specialized forecasting tool or to opt for an integrated solution.”
Consultancy firm Syncronic is familiar with the dilemma about the whether the best solu- tion is a ‘best of breed’ or a complete software suite. “Functionality should no longer be a problem, because various tools provide plenty of options. Relevant aspects of the software suites from organizations such as SAP have also been substantially improved in recent years. Another factor is who to select to implement the software. We’re increas- ingly noticing that companies don’t want to be dependent on just one software vendor, so they choose to work with an independent implementation partner instead. Software sup- pliers that try to resist this will struggle in the future.”
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SUPPLY CHAIN MOVEMENT, No.29, Q2 2018
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