S&OP/IBP: Clarity improves action readiness!

Last week I found myself in a roomful of supply chain professionals where, as Involvation, we’d been invited to chair a discussion on ‘S&OP: achieving and maintaining S&OP effectiveness… and keeping all disciplines on board’. The key issue is how to motivate people and increase their action readiness in terms of Sales & Operations Planning (S&OP) and Integrated Business Planning (IBP).

The concept of ‘action readiness’ is especially tricky to define. After all, it encompasses attitudes, behaviour and culture. The crux of the matter is: at which point are people really ready to take action?


S&OP is all about making decisions

One of the interesting points that emerged from the supply chain professionals’ discussions was that because S&OP/IBP is all about making relevant decisions, it must also be absolutely clear who is making which decisions and where. Furthermore, they concluded, a clear framework with clearly defined S&OP/IBP-related tasks and responsibilities improves people’s action readiness because everyone then knows where they stand.

Create a clear decision-making framework

During the session, one of the participants – an experienced supply chain director – hit the nail right on the head in my opinion. He suggested that it’s necessary to provide clarity on not only what is to be decided within S&OP/IBP, but above all what isn’t. Furthermore, he said, it should be made explicitly clear that the decisions made in the S&OP/IBP process must no longer be made anywhere else within the organization. Until that point is reached, there will be a lot of confusion which will detract from people’s readiness to make a real success of S&OP/IBP.

Clarity improves action readiness!

I completely agree with him. Clarity improves action readiness! Therefore, when it comes to S&OP/IBP, remember the following points:

  • Provide clarity on what is and isn’t to be decided within S&OP/IBP
  • Make it clear which decisions should be made by whom (and in consultation with whom)
  • That avoids confusion and prevents the decision-making process from becoming fragmented
  • The result: increased S&OP/IBP action readiness and hence effectiveness

Last but not least: spare a thought for what this means for the people involved. They may be given new responsibilities, but they may also have to relinquish existing ones. Some decisions will be made within S&OP/IBP and others won’t. Not everyone will find it easy to adjust, so be prepared to provide explanations and guidance.

If you always do what you always did, you will always get what you always got
Albert Einstein