The Digital Supply Chain Challenge: Breaking Through by Markoff Richard & Seifert Ralf W

Author:Markoff, Richard & Seifert, Ralf W. [Markoff, Richard]
Language: eng
Format: epub
Publisher: IMD Publishing
Published: 2020-10-09T00:00:00+00:00

Partial S&OP owners

There are nine companies with solid or dotted line authority over one of the two ends of the S&OP alignment process, but no authority over the other. The supply chains of these companies cannot exert influence over the whole S&OP process, at least not in a formal way. It is difficult to frame the supply chain managers in these companies as owners and orchestrators of the entire S&OP process. These companies are labeled partial S&OP owners .

Connectors

Lastly, in one company, the supply chain managers were in the unique position of possessing no solid or dotted line authority over either end of the S&OP process. This type of governance is simply as a connector . It would be difficult for this company to argue that the supply chain managers influence and orchestrate the generation of a true demand plan, or a production plan to meet it, when they have no influence over either the process or the result.

This result is a bit startling. Over one-third of the companies interviewed – 10 in all – are partial S&OP owners or connectors . Planning what a company should and will produce and when it produces it are the key operational deliverables of the S&OP process. For 10 of the 27 companies we interviewed, a significant part of the S&OP process – the raison d’être of supply chain management – is not under the authority of the broader supply chain organization.

The next step is to explore to what extent these four governance models – strong bidirectional S&OP owners, weak bidirectional S&OP owners, partial S&OP owners and connectors – succeed or fail in achieving the two S&OP alignment objectives in the horizontal and multi-functional dimensions.

S&OP governance: Which model is best?

Having defined the four S&OP governance models, we can compare the extent of their S&OP alignment. For each model, Table 3.1 shows the percentage of companies achieving horizontal alignment of supply and demand and the vertical alignment of demand using the definitions described earlier. It reveals that the type of S&OP governance clearly influences the ability of the S&OP process to obtain horizontal and vertical alignment.

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