One of the advantages of being a freelancer is that I get to work with multiple companies in a short amount of time, which made me experience hands-on that companies can behave very similar even if they’re totally different in size, purpose and industry since they’re all made out of humas which exhibit.. human behaviour (wow, who would’ve thought…).
So I’m thinking a lot about what they have in common a lot since I don’t like to repeat myself but evolve, hopefully benefiting the companies I work with in the process..
Shifting the Burden
One pattern (or “archetype”) that I often observe is “Shifting the burden”.
Which is a pattern that occurs when, for example, stock is low. Instead of wondering what the systemic reason behind this is, companies usually just panic and buy more. The root cause (fe. poor communication in the supply chain) is never solved and next time, the problem is even worse. (The Beer Game is of course a famous simulation of this.)
I think that S&OP has a vital role to play in this. To not cooperate with, ignore or even insitutionalize these reoccurring patterns that sends organizations spiraling downwards.
How? Let’s say you have a metric “safety stock”. Don’t just use it as a red flag for this specific S&OP cycle, but monitor it over time as well and use it as an indicator that something structural is occurring.
Quantitatively, I like to look at variance of a metric for this purpose.
Qualitatively, I simply listen to see If I’m experiencing deja-vu…
Observe the pattern.
It’s easy to just say: we’ll fix it now and we’ll meet again in one month.
Because it’s hard to adress the systemic cause, assuming it’s even noticed.
However an S&OP practicioner is in an unique position to observe this pattern and bring it to the attention of decision makers, including suggestions for the levers to be pulled.
Does this go outside of the scope of S&OP? I don’t think so. Ultimately it is a means to an end which is to improve business performance.
I would argue that training that bird-eye view makes S&OP an invaluable asset to a company instead of just “that meeting cycle that we do every month”.
Lesson for Leaders
Lesson for leaders on the receiving end of the S&OP cycle:
Ask proactively about these patterns. Which issues do we see occuring over and over again each month? What’s being done about them that tries to solve these issues structurally?
Are you observing recurring patterns in your organisation?
