Questions below were asked during the live S&OP Supply Chaincast. For any additional questions, contact the experts.

How would you approach S&OP across multiple manufacturers who shared a common end customer?

It would be unusual for manufacturers to share a common S&OP process. Each company needs to adapt S&OP to its own organization and culture. At the same time, as they share a common customer, they will each want to align with that customer's S&OP. In this way, each will be serving the customer as effectively as practical.

Can you provide precise examples of decisions that are taken at executive level, management level and operational level in S&OP forums?

Slide 15 of the S&OP presentation (PDF) provides some specific examples. More generally, the issues addressed at various organizational levels are analogous to the product hierarchies and the logistics hierarchies.

To what extent is performance monitoring and management part of S&OP? Does S&OP only focus on decisions, or is it also where one steps back and assesses how we are doing?

Performance monitoring and management are not, per se, included in S&OP, which is a planning process. At the same time, setting KPIs and other measures for tracking progress is central to improving supply chain performance.

What specific KPIs do you recommend for use in the S&OP process?

Specific KPIs should be selected, and subsequently evolved, depending on the weak areas of business performance and the company's objectives. That having been said, the most commonly used measures are versions of the following for different portions of the inventory (product-locations, SKU classes, etc.):

• Cost:
• Inventory turnover / weeks of supply
• Lost gross margin
• Customer Service
• Order fill rates
• SKU in-stock percentages
• Combined
• Gross margin return on inventory investment (GMROI)
• Forecast accuracy

What is the operating relationship between S&OP as a business model and the SCOR-based process of Supply Chain Planning?

S&OP is more than supply chain; it includes all operating units:

• Demand – Sales, Marketing, Product Development, etc.
• Planning – Supply Chain Planning, Inventory Management, Production Scheduling, etc.
• Supply – Sourcing, Procurement, Purchasing, Manufacturing, etc.
• Finance – Accounts Receivable, Accounts Payable, Finance, Controller, etc.

Supply chain planning will align with the S&OP plans, so that supply chain people are enabling these. Supply chain planning is important, but S&OP is the enterprise-wide integrated business plan – what we will SELL, what we will BUY – thus, what we will MAKE, MOVE, and STORE.

Do you lock in a BUY plan for the next month as an outcome of the S&OP exec sign-off?

Absolutely. The BUY plan is part of the supply plan. The supply plan takes into account what is in storage, in transit and already in the ordering pipeline. The rest needs to be in the BUY plan. Companies should only be BUYING what they need to supply the demand for the time periods addressed. If the BUY takes three months, then the company needs to know the DEMAND out three months or more.

How do you recommend consumer goods vendors' best analyze POS data?

CPG manufacturers have asked for POS data for years, and now with many retailers, they can obtain it. Knowing "near real-time sales" adds valuable information to the producer (for its forecast and S&OP process). Knowing the facts of what SKUs and categories are selling helps them with fact-based planning and assumptions. Some demand-driven software now can provide all trading in the supply chain for that category/item visibility at 15-minute intervals.