Overcoming the “Catch 22” of
Sales and Operations Planning
Implementation
Joe Shedlawski, CPIM
R.A.Stahl Company
Agenda
• Introduction
• Why Engage Top Management
• The Elements of Successful S&OP
• What's the Challenge (Catch '22’)
• How to Engage Top Management
• Discussion
Introduction
What is a Catch 22?
A catch-22 is a paradoxical situation from
which an individual cannot escape because
of contradictory rules
Why Engage Top
Management?
Top Management’s Role:
“Keep the Herd Moving,
Roughly West”
Energy Alignment
Accomplishment
Accomplishment
Sales/Marketing
(Units or $ by Family)
Finance
(Gross Revenue)
Executive S&OP
A process to raise and reconcile
disagreement/conflict, agree upon, &
communicate THE company game plan
Operations
(Units/hours/
Material)
Product Development
(New Product Issues)
Implementation Alternatives
Hard Benefits
• Customer service
• Inventory
• Obsolescence
• Freight cost
• Order lead times
• Supplier lead times
• Time to launch new products
• Plant productivity
UP
DOWN
DOWN
DOWN
DOWN
DOWN
DOWN
UP
Soft Benefits
•
•
•
•
•
•
•
•
Enhanced teamwork
Improved communications – institutionalized
Better decisions with less effort and time
Better $$$ plans with less effort and time
Greater accountability and control
Enhanced execution of strategic plans
Window into the future
Energy alignment: Keep the herd
moving roughly west
The Elements of Successful
Executive S&OP
Top Management’s Place
ProActive
Volume
Behavior
Supply
Demand
ReActive
Behavior
•How Much?
•Rates
•Market Facing Families
•The Big Picture
•Strategy/Policy/Risk
•Monthly / 18 - 36 Mos
•Executive Responsibility
Mix
•Which Ones?
•Timing/Sequence
•The Details
•Products/SKU’s/Orders
•Tactics/Execution
•Weekly/Daily 1-3 Months
•Middle Mgt. Responsibility
What’s the Challenge?
Keeping that herd moving roughly west is
more of a cultural challenge than a
technical one!
Culture
• Interpersonal relationships reflect the culture of
an organisation
• The sum of those relationships defines the
organisation’s culture
• These relationships reflect a web of implicit and
explicit agreements throughout the organisation
Research (AMR study, 2010)
Success with Executive S&OP consists of:
• 10% technology
• 30% process definition and discipline
• 60% culture change
Cultural Changes:
• Post-S&OP
Pre-S&OP
• Lack of involvement by
Top Management
• Acceptance of poor
data
• Silo mentalities that
inhibit
interdepartmental
collaboration
• Reactive decision
making
• Inter-functional
collaboration, with open
trust between
departments
• Data-driven decisions
• High level of crossfunctional discipline
Proactive approaches
to demand and supply
plans
* How S&OP Changes Corporate Culture:
Results from Interviews with Seven Companies
Stahl/Mello; Foresight Journal: Winter 2010
Top Management’s Role
In Executive S&OP, it’s necessary to voice
disagreements! Management must:
• Create a culture that allows the Ugly Moose to
be put on the table -- so that they can
completely and effectively resolve
disagreements and conflict, setting proper:
–
–
–
–
Policy
Strategy
Risk assessment
Performance measurements
Before it’s in the MIX Space!
Conflict Resolution *
• Disagreement has two parts:
– Substantive issue
– Emotion behind that issue
• Disagreement becomes conflict when the
emotion is not completely addressed
• Lasting conflict resolution must deal with
both elements of disagreement
• Doing that effectively can be learned:
– With a motive to do so and
– A framework on which to work
* “Getting to Resolution”
Stewart Levine
Top Management’s Catch 22
• If Top Management does get involved from the very
beginning:
– There is risk of personal or organisational discomfort that
comes from changing the culture
– BUT that is necessary to bring about lasting results
• If Top Management does not get so involved and
committed:
– There is less personal risk of disruption
– BUT there will likely not be any substantial business
improvement
* Overcoming the "Catch 22" of Implementation
by Robert A. Stahl and Joseph F. Shedlawski
Foresight Journal Spring 2012
How to Engage Top
Management
“The Big Lie of Strategic Planning”
Harvard Business Review – Jan/Feb 2014 by Roger Martin
“A detailed plan may be comforting, but it’s not
a strategy.”
The Problem: Executives know that strategy is important.
But almost all find it scary, because it forces them to
confront a future they can only guess at. Strategy making
is uncomfortable.
The Solution: Reconcile yourself to feeling uncomfortable,
and follow three rules:
1. Keep it simple
2. Don’t look for perfection
3. Make the logic explicit
Engage Top Management
• Identify and enlist an Executive Champion;
someone with executive influence, willing to
“put skin in the game”
• Connect the hard benefits of executive S&OP
to successful implementation
• Follow a path of low risk/low cost
• Obtain quick results to build confidence
• Provide feedback on progress/success
• Generate local ownership and enthusiasm
Business
Improvement
Low Risk Implementation Path
Executive
Briefing
Go/No-Go #1
Live Pilot
Demonstration
Go/No-Go #2
Kickoff
Session
Phase II
Expansion
Low Cost
Low Risk
High Impact
Quick Results
Phase I
Pilot Demo
1
2
3
4
Months
Phase III
Financial
Integration
5
6
7
8
9
Leadership’s Role
During Change: Immerse in the Detail
•
•
•
•
•
•
•
Lead educational process
Manage cultural changes
Assure proper resources
Approve procedures
Insist on clear targets (goals)
Participate
Measure progress
Leadership’s Role
(Continued)
Ongoing: Remove from Detail
•
•
•
•
•
Insist on meaningful participation
Insist proper homework be done
Raise and resolve disagreement and conflict
Make clear decisions
Hold people accountable to process and to
results
• Encourage and expect realistic improvement
• Lead management development
• Measure performance
Corporate Role*
• Mandate the fundamental concepts
and principles of executive S&OP
• Demonstrate a willingness to air
disagreement
• Assure resources to develop
necessary and appropriate tools
• Track progress – process discipline,
cultural, key performance measures
• Reward success
* S&OP Principles: The Foundation for Success
Robert A. Stahl and Thomas F. Wallace
Foresight Journal Fall 2012
Discussion
Thanks for Listening!
joeshedlawski@gmail.com