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Vol 32 - No 03 - May 2006 National events: Tom Wallace - “S&OP the state of the art” We met on the twenty third floor of the Shell House Tower, sandwiched between the London Eye and Waterloo Station. A waiter took our coats and we were greeted by waves of lavish canapés and a free bar. As we thanked our host, Shell Lubricants, for their hospitality, technicians were busily preparing to record the forthcoming event. Tom Wallace and his wife joined the gaggle of members. Tom Wallace had the glow of a guru. His slides were basic and his craft was in simplifying a technical message. He suggested that we, the members, ask questions at any time and we responded without hesitation. His opening gambit was “S&OP is back and it’s bigger than ever and in the UK the IOM owns the space”. This inspired me as I grinned over at my fellow IOM members. Tom unravelled his agenda into six elements; (1) Role and importance of S&OP (2) What is S&OP? (3) The tools for both volume and mix consideration. (4) Why is S&OP so popular? (5) Case studies and benefits of best practice. (6) The future of S&OP Tom was speaking to a knowledgeable audience and in a session entitled “State of the Art” we were looking for his piece de resistance. It took me a while to find it. It was not some great new undiscovered facet that we had missed, but he let us see S&OP through his lens. It was the context that S&OP fits in the 21st century. For example, Tom told us that there are three types of supply tools: reliability enhancers, waste reduction tools and co-ordination tools. S&OP sits firmly in the latter alongside ERP, Kanban and Vendor Managed Inventory. Moreover as complexity and rates of change have accelerated for most companies, S&OP is one tool that offers resolution. A more striking insight was the way our understanding of the scope of S&OP was changing. It was originally seen as the “volume” piece of the business plan intending to balance supply with demand on a two year horizon. Now however, S&OP had been broadened to include “mix” as well as “volume” as MRPII has been swallowed up by ERP software. At the strategic end of the planning spectrum “Executive S&OP” is the new term for top management’s role in the process. In his first anecdote, Tom recalled a Proctor & Gamble VP of their $4b household laundry business saying that without S&OP he used to pull levers that were not connected to anything. Executive S&OP connects the levers. When confronted with the dilemma of how much time should a CEO contribute to the S&OP process, he answered 1.5 hours per month. Tom explained his version of the 5-step process. It was not quite the same 5-step process that I teach my clients, but the difference was minimal. When he outlined where global S&OP fits alongside “regional” S&OP he had added two more steps, step 6 global consolidation and step 7 global top management review. At steps 6 and 7 headquarters aggregate steps 4 and 5 from their national businesses and had to squeeze them into the monthly process. The section “why is S&OP so popular?” offered three insights, two of which surprised me. The first surprise was the “Adoption Curve” which states that it takes 15 plus years to gain acceptance after the initial idea. S&OP was first launched in 1986 and it has taken till now to gain enough traction. The other surprise factor was that “Lean” is discovering S&OP. Lean needs consistent stable plans to thrive and S&OP offers a window into the future to allow time to stabilise the plans. Regarding benefits, Tom outlined five out of thirteen best practice case studies. At this stage he was running out of time and was less convincing than the earlier messages. Finally Tom outlined his future for S&OP which consisted of a team of executives working in real time to identify and optimise the right decisions for the company. He talked of executive war rooms, running simulations at the speed of light and the ability to manage disparate data sources. In conclusion, it was a pleasure to meet an intellect who was involved with the pioneers of supply chain management, a man who has co-authored 11 books, taught thousands of people across the world and consulted in, GM, Proctor & Gamble, Pfizer and the US Defence Department to name but a few. Best of all Tom is a nice chap who has high regard for the IOM. Joe Booth MIOM Related Topics:
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