S&OP Study Prelim Summary Charts used in the Why Is S&OP So Hard? report Executive Overview Sales and Operations Planning (S&OP), the cross-functional process to align the commercial processes of sales and marketing with the operational processes of supply and manufacturing, is having a renaissance. It is not a new process. Companies have worked on these processes for over 35 years; but today, only one out of two companies believes that their processes are effective. Why is it so hard? Answering this question is the goal of this report. Figure 3. Sales & Operations Planning Process Overview A mature S&OP process improves organizational agility and alignment; but, this requires focus and clear leadership over a period of at least three to five years. A higher level of success happens when the S&OP processes report to a profit center manager and decision making is aligned to the commercial processes. With one in two companies aligning S&OP to product line production, not to commercial processes, it is difficult to drive maturity. Ideally, the leader of the S&OP process understands both the commercial drivers, and the supply constraints, and can make the pivot; but this is seldom the reality. Today, due to popularity, companies have more than one S&OP process. In this research, a multinational company will have four to six separate and distinct S&OP processes with different maturity levels. While many will try to drive improvements with big technology initiatives, based on a decade of research on the topic, we recommend starting by tackling the change management issues. In this report, we share five barriers, and four misconceptions while giving supporting research to challenge change in the organization.

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Sales and Operations
Planning Study
Preliminary Summary Charts
January 6 – May 1, 2015

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Agenda
 Study Overview
 Sales & Operations Planning
 Supply Chain Agility
 Company Performance

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Study Overview

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Most Respondents Are Manufacturers, in Process
Industries, and with $6B in Revenue on Average

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Top Industries for Respondents Include Food & Beverage,
Chemical, and Consumer Packaged Goods

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The Majority of Respondents Work in a Supply Chain Role,
Primarily at the Director or Manager Levels,
and Are Based in North America or Western Europe

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Agenda
 Study Overview
 Sales & Operations Planning
 Supply Chain Agility
 Company Performance

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Performance Summary

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Companies Have 4 Distinct S&OP Processes on Average

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Over Two-Thirds Use “S&OP” to
Describe the Process

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Just Over Half Consider Their Primary S&OP Process
to Be Effective

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Volunteered Reasons for Why Primary S&OP Process
Is Effective

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Volunteered Reasons for Why Primary S&OP Process
Is Less Than Effective

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Most Common Goal of an S&OP Process Is to
Match Demand with Supply

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Less Than Half Consider Their Primary S&OP Process
to Balance the “S” and “OP”

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Two-Thirds Report Primary S&OP Process
Is Executed at Least Most of the Time

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Primary S&OP Processes Are Slightly More
Aligned by Product; Typical Frequency Is Monthly

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Spreadsheets Are the Most Common Technology Used and
SAP Is Most Common Product Used

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For Over Half, the Budget Is an Input to the S&OP Process
But Does Not Constrain It

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Sales-Operations Collaboration Is Among Most Important
and Top Performing Element of S&OP Processes

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Managing Opportunities/Risk, Running What-if Analyses,
and Using Technologies Show Greatest
Performance vs. Importance Gaps

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Most Common Challenge with S&OP Implementation
Is Getting to Right Data in Timely Fashion

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Vast Majority Believe Their Primary S&OP Process Is
Important for Improving Supply Chain Agility

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Agenda
 Study Overview
 Sales & Operations Planning
 Supply Chain Agility
 Company Performance

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Most Common Definition of Supply Chain Agility Is the
Ability to Adapt to Variations in Demand and Supply

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Agility Performance Is 30% Lower Than Importance

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Current Agility Is Perceived to Be Three Times Higher
Than One Year Ago

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Agenda
 Study Overview
 Sales & Operations Planning
 Supply Chain Agility
 Company Performance

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Top Supply Chain Descriptors:
Many, Room for Improvement, Reactive,
Tactical, and Cautious

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Top Supply Chain Strengths:
Many, Controlled, and Aligned

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Sales & Marketing and Manufacturing & Procurement
Are Most Important to Be Aligned and Most Aligned

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Greatest Alignment Gaps Are with Sales & Operations,
Operations & IT, and
New Product Development & Distribution

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Over Three-Quarters Report That Their Company Is
Doing Well at Meeting Corporate Goals

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Most Important Measurements to Meet Goals Include
EBITDA, Operating Margin, Cash-to-Cash Cycle,
and Days of Inventory

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Most Commonly Tracked Measurements Include Operating
Margin, Days of Inventory, EBITDA, Cost of Goods Sold,
Forecast Accuracy, and Days of Receivables

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Top Areas of Business Pain Are Alignment, Data, Visibility,
Demand/Supply Volatility and Executives