Sales & Operations Planning: Achieving Excellence

Transcription

1 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT Sales & Operations Planning: Achieving Excellence Jan Stentoft 1

2 Agenda Brief about Sales & Operations Planning Content Benefits Success criteria Research gap Project by The Danish Industry Foundation with a focus on behavior Implementation issues Key Behavioral Indicators & Key Performance Indicators MBTI and the TeamDiamand Summing up 2 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

3 Background: Short CV Professor in Supply Chain Management (SCM) Research and teaching in SCM, supply chain innovation, operations management (+ offshoring and reshoring of manufacturing) and administrative system development (business processes, IT systems and Industry 4.0) Strong focus on applied science Head of research of Reducing Cost of Energy in the Offshore Wind Sector through Supply Chain Innovation and in Improved Competitiveness through Sales and Operations Planning Practical experience Managing consulting for +100 private public enterprises; Director at LEGO System A/S, Group ERP project manager at Gumlink A/S, Change Agent at Dandy A/S; Chairman of the Board of Kolding Gymnasium +255 publications (international peer-reviewed journal articles; book chapters, books, research reports, trade press articles etc.) 3

4 New publication Stentoft, J., Freytag, P.V. & Eckhardt, S. (2018), Sales & Operations Planning: It s all about people, DILF Orientering, Vol. 55 No. 2, pp Can be found at: blications/sales--operations-planning- its-all-about-people(7d ac65-408a-8012-f5cba1e10944).html 4

5 What is S&OP? Sales & Operations Planning (S&OP) is a tool that integrates different business plans to one overall plan to balance demand and supply and to build bridges between strategic and operational plans. S&OP operates at a tactical planning horizon (typical within 3 to 24 months) S&OP is a cross functional business process Literature about S&OP is a mixture of grey and academic literature

6 Benefits with S&OP 6 Source: Stentoft, J., Mikkelsen, O.S. & Rajkumar, C. (2018) Supply Chain Management: Sources for Competitive Advantages, Hans Reitzels Forlag, København

7 S&OP success criteria Top management anchoring Strategic alignment (aligned objectives, S&OP is related to corporate strategy) Organizational alignment (cross functional participation; clear roles and responsibilities; process management, consensus, accountability, facts instead of feelings) Performance management (the right KPI s are established; avoid too many) Project planning (start with pilot, quality of information between the participants (precise, complete and real time based); avoid bias in baseline data) Common evaluation and reward systems Organizational and behavioral readiness (trust and commitment, loyalty, conflict handling, empowerment to make decisions, training and education, change management, coaching for improvement). Meeting culture (continuous S&OP meetings, meeting attendance, structured agendas, process meetings to prepare decision meeting, CEO driven decision meetings) 7 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

8 Brief about the S&OP project at The Danish Industry Foundation S&OP implementation with a special focus on SMEs Focus on behavioral aspects (90% people and 10% technique) S&OP as a mean to tier down the silos 10 companies are followed from selling in the S&OP to top management to implementation and operation 8

9 Project partners on behavior Mercuri Urval drives the behavioral part: Individual personality tests (Myers-Briggs Type Indicators based on Jung s typologies) Team-performance in new S&OP processes using the TeamDiamond from Brøgger Business Psychologists 9

10 Hard & soft wiring The main part of the S&OP literature has a focus on the more technical stuff - the hard wiring - (process steps, planning levels and horizons, organization and KPIs). There is little focus on the human side - the soft wiring, the people that executive the processes. Here we introduce the concept of Key Behavioral Indicators, as a new initiative that can be implemented in ongoing S&OP processes or as a central component in the development of new S&OP processes. 10

11 10 implementations Large enterprises Medium-sized enterprises 11

12 Research methods In the 10 companies: Qualitative interviews Observation studies Questionnaire-surveys National questionnaire-survey among Danish manufacturers 12

13 S&OP: First people then data S&OP effect Process and data Process and people Data-driven competitiveness through S&OP Data model: Master Data Management Forecasting Aggregate Planning Call-off S&OP with a behavioral focus Time 13

14 S&OP implementation process 14 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

15 S&OP maturity 1. Process effectiveness Process effectiveness describes the characteristics and activities an S&OP process should include (e.g. pertaining to doing the right things ). 2. Process efficiency Process efficiency refers to aspects of how to integrate and align a set of plans with minimal effort (e.g. doing things right ). 3. People and organization People and organization is concerned with empowering all members of the crossfunctional S&OP team, gaining top management support and sponsorship, and managing employees attitude toward S&OP. 4. Information technology Finally, information technology focuses on this dimension as an enabler for S&OP. 15 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

16 Process effectiveness maturity Source: Wagner et al. (2014) 16 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

17 Process efficiency maturity Source: Wagner et al. (2014) 17 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

18 People and organization maturity Source: Wagner et al. (2014) 18 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

19 Information technology maturity Source: Wagner et al. (2014) 19 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

20 Status in the project 8 out of 10 is operation or in the pilot phase One company is in pilot but is not part of the overall project anymore due to lack of will to participate One company ended with AS-IS as key-resources leaved the company The 8 companies are monitored during the next year with small change surveys National questionnaire-survey is in progress Final conference day in March 2019 including tools. 20

21 Personality theory MBTI is a self self-assessment tool, where the test person select among two alternatives on a range of questions about how they perceive them self and their awareness on other things, people and ideas (Myers et al., 1998). MBTI operates with four personality preferences about how people behave: 1. Extraversion-Introversion (EI) 2. Sensing-Intuition (SN) 3. Thinking-Feeling (TF) 4. Judgment-Perception (JP). Based on these four dichotomies, 16 psychological types are developed each being represented by a four letter abbreviation (e.g. ESTJ) The purpose is to obtain insight into the personality types to understand and acknowledge differences between people. There do not exists one best type! 21 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

22 Key Behavioral Indicators The specific indicators that are important of creating business results are called for Key Behavioral Indicators (KBIs). KBIs can be more different to measure than KPIs since there can be subjectivity included KBIs can be defined in the relationship between a superior and a subordinate and between peers to stimulate that there is fit between with one says and what one does It is important that the KBIs are being coupled to the personality tests KBIs can be adjusted continuously and be changed as there is a need to focus on other behaviors 22

23 It takes two to tango: KPIs & KBIs Role What we should do KPIs Who we are MBTI What we actually do Behavior KBIs Source: Stentoft, Freytag & Eckhardt (2018) Unleashing the Full Potential of Sales & Operations Planning Recognizing Key Behavioral Indicators 23 We can say that humans not are doing what they should do but do things based who they are. Knowing who they are, the KBIs can be established to monitor the way we are doing things, while the KPIs monitor what we have to do. Together, the KPIs and KBIs secure that we doing what we have to do! DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

24 TeamDiamond 24 Source: Brøgger, B. & Bohnsen, L. (2013) DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT

25 Observed challenges It is a challenge to select the right KPIs The daily operation interrupt the development When key-resources stop the process stop Implementation requires long hauls KBIs are difficult KPIs => Management KBIs => Leadership 25

26 MBTI at Mac Baren Tobacco Company Common language through MBTI. Appreciation that leadership is about relationships between different people One's guards have been lowered (legitimate to ask colleagues for their well-being) Consciousness about different listened level Mutual respects and recognition High employee engagement and group dynamic 26

27 More information Home page: Videos Cases Practical articles Tools 27

28 Summing up Effective S&OP processes must be supported by a set of KBIs to secure better achievement of KPIs: Three central learnings at this stage: 1. The importance of commitment in the whole organization 2. The need for a common language to talk about the individual and the organizations challenges 3. The need for persistence in the process implementation and to comply with the defined rules of the game 28

29 Thank you 29 DEPARTMENT OF ENTREPRENEURSHIP AND RELATIONSHIP MANAGEMENT