Earlier this year, we teamed up with ORTEC to develop an S&OP maturity assessment. S&OP is especially relevant for companies that have a very diverse product portfolio and complex production processes. A mismatch between demand and supply can be very costly in such cases. So far, professionals from around the world have taken the assessment. Although most respondents are from the chemical and pharmaceutical industries, the insights are relevant for many sectors. Here are some of the key trends.
Delivery reliability is a real challenge
The biggest struggle, even for companies with a fairly high S&OP maturity, is delivery reliability. More than 90% of respondents state that they regularly struggle to deliver products as promised. This outcome is not surprising when plans are not fully aligned. Nevertheless, this is one of the most important KPIs to deliver on strategic objectives.
Data & scenario analysis are underused in S&OP
The results clearly indicate that S&OP processes take confirmed, and often expected orders into account, with some attention to costs. Yet, there is a lot of potential for profit maximization. This can be better achieved by using scenario-specific data, and paying attention to KPI trade-offs. Many interesting insights can be gained through scenario analyses. However, even when data is accessible, it’s often difficult to turn it into insights for improved decision-making.
KPIs are not supported company-wide or used to drive S&OP
More than half of respondents say they have KPIs. However, these indicators are often not used to drive S&OP and are not yet supported company-wide. KPIs are the most important tool to keep agreed objectives as the main driver in decision-making and facilitate alignment.
The benefits of a well-implemented S&OP process
Based on our findings, there is still a lot of room for improvement when it comes to S&OP. From our experience with customers, we know that a well-implemented S&OP process is certainly worth your while. Overall, our customers see ROI within 6 to 24 months. Check out the infographic below to learn about the benefits and take our S&OP scan to identify improvement areas.