Rethinking S&OP (The Future of Supply Chain) - Ep 158

Full transcript available: www.lokad.com/...
Lokad CEO Joannes Vermorel critiques the Sales and Operation Planning (S&OP) process as outdated and inefficient for modern businesses. He argues that S&OP, designed for simpler times, struggles to keep pace with today’s complex, fast-moving business environment. Vermorel criticizes the process’ slow refresh rate, its reliance on meetings and spreadsheets, and its focus on unified forecasts. He suggests that large companies should eliminate their S&OP divisions, likening them to obsolete fax machines. Instead, he proposes a shift towards improving access to information, transforming S&OP teams into data lake teams.
00:00:00: Introduction
00:01:49: S&OP: Quantitative alignment and decision making
00:04:08: S&OP for company-wide synchronization, not value alignment
00:06:56: S&OP: Team collaboration, unified forecast, and deliverables
00:09:36: Commitment agreements and bureaucratic challenges in S&OP
00:13:12: S&OP: Slow process, qualitative insights, and information flow
00:18:59: Evolution of companies, product complexity, and supply chains
00:23:19: S&OP: Costly, slow, outdated, and software-mediated
00:26:37: S&OP: Origins, formalization, and impact of technology
00:30:33: S&OP: Need for alignment, critique of meetings
00:33:30: S&OP: Comparison to cancer, forecast generation, and auditing
00:36:35: S&OP: Informational problem, data flow, and software necessity
00:40:52: Focus on unchanging fundamentals, critique of unified forecast
00:45:11: Consequences of stock out, repetition, and e-commerce questions
00:48:42: Difficulty of decision-making, critique of S&OP formalization
00:52:47: Value of qualitative analysis, critique of S&OP deliverables
00:56:43: Termination of S&OP division, removing unnecessary divisions
01:00:00: Upskilling, importance of accessible information, and data access
01:03:40: Converting S&OP team into data lake team
01:05:33: Conclusion of the interview
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[@sachinrkrishnan6680]

Great talk! Was wondering what’s your take on an aggregate level SOP without going into each and every product but focusing on product families?

[@Lokad]

Thanks for the kind word! We are going to publish soon an upcoming debate about S&OP. Tons of further materials in this long interview. Stay tuned! Best regards, Joannes