Adaptive S&OP: Surviving, Adapting, and Thriving in the VUCA World
“Every manager seeks control – the ability to make the right things happen. Surprises fill the absence of good controls. Even pleasant surprises are problems, as they indicate that things did not happen as expected.
Sales and Operations planning provides the general manager and staff a means of gaining more control. With it they can operate their business more effectively: set attainable objectives, see consequences, evaluate alternatives, communicate approved plans, measure performance and achieve predicted results.”
~Richard C. Ling from the preface of “Orchestrating Success”
“Orchestrating Success” written in 1987, was the first book on the concept of Sales and Operations Planning. Many books on the topic were subsequently written from a variety of perspectives. Yet, 30 years later leadership teams continue to face the same problems and dilemmas.
Ian Wilson, a former student of Dick Ling, once said, “however good our research may be, we shall never escape from the ultimate dilemma that all our knowledge is about the past and all our decisions are about the future.” These decisions will impact all three time frames in a business – strategic, tactical and operational.
Like different instruments in an orchestra, these three different ranges must be effectively, constantly and consistently harmonized for a company to not only survive, but to adapt and thrive in the VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) world.
An effective Sales and Operations Planning process is a necessity for every company. Some things have dramatically changed since 1984, when S&OP was first defined, and yet there are some very basic things that have not changed at all. Managers still seek control of the business – the ability to make desired things happen, and avoid undesirable things. However, companies face an ever increasingly complex environment, coupled with increasing marketplace volatility. This requires companies to strive to be more flexible and responsive, by focusing on flow; streamlining both planning and execution, while strategically conserving the use of their valuable resources, to those that maximize ROI. Instead of investing capacity, cash, and space into items prematurely, a company must leverage its resources, to produce only those products that will be demanded by their customers, now — and in the rapidly evolving and volatile future.
How can a company transform to an agile demand driven adaptive enterprise, capable of staying ahead of today’s hypercompetitive market? Clearly, the answer must be a systemic change—an alignment of vision, strategy, tactics, and operations. This presentation will describe the Sales and Operations Planning process, that provides the basis of this adaptive transformation that must occur, for a company to become a Demand Driven Adaptive Enterprise, and realize sustainable and significant return on investment.