The S&OP Pulse Check 2017 Your yearly dose of S&OP insights

Niels van Hove, author of the blog

Supply Chain Trend

Background

I started the S&OP Pulse check i to fi d a s ers I could ’t get fro a y

conference, consultant or whitepaper. Now in its 6th year, it is still there to share

insights and knowledge with S&OP practitioners

As a coach, I’ ery i terested i culture, i dset a d

behaviours. The S&OP pulse check 2017 shows that:

1. Effective S&OP is related to positive cultural change

2. Mental Toughness supports effective S&OP

3. Behaviours are not addressed enough in S&OP

I hope you enjoy this years insights

Summary

Key insights S&OP pulse check 2017

People

&

Culture

Process

&

Systems

• Effective S&OP processes see more positive cultural change

• Mental Toughness supports effective S&OP

• Behaviours are not addressed enough in S&OP implementations

• Integrating financial planning is now the main action in S&OP

• Managing the product portfolio remains underused

• 51% believes there is a lack of S&OP process & system innovation

• 64% believes there is a need for more S&OP standards

• People skills & resources is the main roadblock to implement S&OP

The main cultural changes driven by S&OP

Question: What are the main cultural changes driven by S&OP? (n=59)

Source: Supply Chain Trend 2017

The main cultural change due to S&OP is improved understanding,

communication and collaboration between functions

22%

25%

27%

29%

34%

36%

49%

53%

54%

54%

68%

75%

More willingnes for people to change

Better conflict resolution

Improved constructive behaviours ingeneral

A more positive business andatmosphere

Less animosity and finger pointing

Improved understanding of companygoals

More empowered decision making

Improved team work and holisticbusiness views

Improved trust between functions andpeers

More data driven and factual decisionmaking

Improved collaboration betweenfunctions

Better understanding andcommunication between functions

The main cultural changes driven by S&OP

Question: What are the main cultural changes driven by S&OP? (n=59)

Source: Supply Chain Trend 2017

However, effective S&OP processes see much more positive

cultural change impact versus non-effective S&OP processes

31%

69%

54%

38%

54%

21%

39%

27%

18%

21%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Better conflict

resolution

Improved team work

and holistic business views

Improved trust between

functions and peers

Improved constructive

behaviours in general

Improved understanding

of company goals

Other Effective S&OP

Parti ipa ts i effective S&OP processes,

see significant more proof of trust,

teamwork, constructive behaviours and

u dersta di g of o pa y goals.

Niels van Hove

1. Control: ‘I really believe I can do it’. ‘I can keep my emotions in check when doing it’. Self worth, Efficacy.

2. Commitment: ‘I promise to do it – I’ll set a goal’. ‘I’ll plan it’. Tenacity, Stickability, Grit.

3. Challenge: ‘I am driven to do it’. ‘Setbacks make me stronger.’ Seeing opportunities not threats.

4. Confidence: ‘I believe I have the ability to do it.’ ‘I can stand my ground if I need to.’ Self Belief.

Mental Toughness supports effective S&OP

The 4 C’s of Mental Toughness

Mentally Tough individuals are pro-active, perform under pressure, are open to

change and confident. Mental Toughness has four components

Mental Toughness can be measured and improved.

For more information go to MentalToughness.online

88%

88%

69%

69%

85%

42%

33%

42%

45%

36%

S&OP stakeholders show commitment to theS&OP process, meeting agenda and planning

rules.

Our leadership team is willing to change directionswhen circumstances change

In S&OP meetings we keep our emotions undercontrol, even when we disagree.

In our business it is common to pro-activelyengage across different functions to solve issues.

In S&OP meetings we challenge each other andthe status quo.

Other Effective S&OP

Question: what is your level of agreement with the following statements?

(n=59). Percentages in graph shows agree and strongly agree

Source: Supply Chain Trend 2017

Mental Toughness supports effective S&OP

Organizations with effective S&OP processes show more commitment,

challenge, emotional control and willingness to change

Challenge

Take

Control

Emotional

Control

Confidence

Change

Commitment

Behaviours are not addressed enough

Question: Do you think behaviours are addressed

enough in S&OP implementations? (n=59) Source: Supply Chain Trend 2017

63% of practitioners think that behaviours are not addressed

enough in S&OP implementations

O er ti e, o pa y eha iours defi e o pa y ulture. If eha iours are ot addressed, o pa y ulture ill ot sig ifi a tly ha ge

Niels van Hove

32%

63%

5%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No Don't Know

The main actions in the S&OP process are evolving

Question: What are the most important actions in an S&OP process? (n=59)

Source: Supply Chain Trend 2017

Integrating financial planning & budgeting is chosen

as the main action in S&OP for the first time since 2010

27%

36%

42%

46%

53%

54%

54%

63%

64%

75%

Collaborative planning with customers/vendors

Actively manage our product portfolio

Scenario planning to reduce supply chain risks

Trying to reduce inventory to free up workingcapital

Stay aligned with the company strategy onmonthly basis

Scenario planning to achieve optimal financialresults

Manage supply constraints within the S&OP plan

Manage demand forecasts within S&OP

Create a profit optimized supply-demandbalanced plan

Integrate financial planning & budgetting with theS&OP process

The main actions in the S&OP process: trends

Question: What are the main actions

in an S&OP process?

2010

(n=50)

2011

(n=134)

2012

(n=52)

2014

(n=40)

2015

(n=123)

2017

(n=59)

Integrate financial planning & Budgeting

in the S&OP plan 49% 52% 56% 67% 56% 75%

Actively manage our Product Portfolio 23% 23% 24% 36%

Including the integration of financial planning has been growing,

whilst product portfolio management remains underused

49% 52%

56%

67%

56%

75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010 2011 2012 2014 2015 2017

Integrate financial planning & budgetting

in the S&OP plan

There is a perceived lack of S&OP innovation

Question: Do you think there is enough

coordinated process innovation in S&OP? (n=59) Source: Supply Chain Trend 2017

Over 50% of participants think there is a lack of

S&OP process and system innovation

Question: Do you think there is enough

innovation in S&OP systems? (n=59) Source: Supply Chain Trend 2017

There see s to e a dis o e t et ee hat e dors thi k S&OP i o atio is a d hat the pra titio er thi ks this is

Niels van Hove

32%

51%

17%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't Know

31%

51%

19%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't Know

S&OP and IBP definitions and standards

Question: Do you think there is a difference

between S&OP and IBP? (n=59) Source: Supply Chain Trend 2017

For practitioners it is still unclear if there is a difference between S&OP and IBP.

There is a clear need for industry standards

Question: Do you think we need more industry

standards around S&OP? (n=59) Source: Supply Chain Trend 2017

Niels van Hove

If after 30 years of de elopi g S&OP a d IBP e e supply hai people struggle to u dersta d hat it is, ho a e get other usi ess fu tio s o oard?

53%

29%

19%

0%

10%

20%

30%

40%

50%

60%

Yes No Don't Know

64%

25%

10%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No Don't Know

The main reasons to implement S&OP

Question: What are the main reasons to implement S&OP? (n=59)

Source: Supply Chain Trend 2017

For the 6th year in a row, the top two reasons to implement S&OP

are about communication and creating consensus

24%

25%

37%

39%

46%

53%

54%

54%

56%

58%

73%

81%

Integrate customers and/or suppliers

Create competitive advantage

Improve asset utilization

Improve top line revenue

Manage demand volatility

Improve customer service

Reduce risks in supply chain network

Improve executive visibility

Implement company strategic plan

Reduce supply chain costs

Create a consensus standardized one number plan

Improve cross functional communicationTop 2

since 2010

The main roadblocks to implement S&OP

Question: What are the main roadblocks in implementing S&OP? (n=59)

Source: Supply Chain Trend 2017

People skills & resources is now the main roadblock in implementing S&OP,

overtaking the usual number 1 senior leadership support

15%

22%

22%

31%

36%

41%

41%

44%

44%

47%

51%

58%

Lack of time to run the process

Lack of a clear companystrategy

Obstructive behaviours

No clear S&OPimplementation plan

Technical and systemcapability

Too many other businesspriorities

Clear roles & accountability's

Data accuracy and integrity

The organizational silo's

Process discipline

Senior leadership support

People skills/resources

2%

10%

25%

36%

20%

3%

3%

Consultant

Analyst

Manager

Senior Manager

Director

President/VP

CEO/MD/Owner

0%

10%

10%

3%

0%

69%

2%

Marketing

Finance

Operations

Logistics

Sales

Supply Chain

Procurement

Survey Demographics

The 2017 S&OP pulse check had a total of 59 participants

Job level Functional area

5% 3%

2%

8%

3%

15%

29%

19%

3% 5%

2%

5%

Agriculture Automotive Biotechnology Chemical Consulting ConsumerProducts

Food, Beverage &Tobacco

Manufacturing Pharmaceuticals Retail &Wholesale

Transportation &Warehousing

Other

Industry

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Building Mental Toughness

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The S&OP Pulse Check 2017 Your yearly dose of S&OP insights

Thank You