As referenced in the S&OP: 7-Step Business Process article, the Executive S&OP Meeting serves multiple strategic purposes. In addition to updating corporate strategies and measuring on-going performance relative to targets; these meetings allow to assign financial resources across the organization and for designing systems that eliminate conflicts between organizational units.
Closed Loop S&OP
Cohesiveness is an underlying goal of executive planning. Ideally, all team members within a corporation will work together to successfully achieve the goals of the business. Aligning the daily activities of cross functional teams in a way that optimizes overall company performance can be bad. Indeed, it can be an organizational dynamic that causes companies to struggle. Developing a methodology for creating metrics that drive both desired behaviors and decision making is vital to the companies’ success.
A closed loop S&OP system enables corporations to make decisions based on a single source of truth. “Clean data” that we share across an organization and that we update in real time enables companies to perform “what if” scenarios to see the impact of their decisions across the entire organization. Reliance on a centralized database also promotes organizational transparency. Authorized team members can have a deep and complete understanding of the objective data that was the basis for decisions. In the cases of predictive modeling, it also enables team members to understand the effectiveness of leveraging clean data. But also tweaking models to incorporate up-to-the-minute input reflecting changes that might impact either demand or production.
Decision Execution Management
Decision Execution Management (DXM) provides a structured methodology to measure, communicate, and track decisions. DXM metrics drive accountability across an organization. Good or bad, we can trace back the results of a decision to its source. Over time, we can develop performance metrics to determine the effectiveness of decisions. This process can serve as a catalyst for ongoing improvement. If the outcome of a decision did not turn out as hoped for, then the team can, collectively, go back and look at the assumptions that were used in making the decision. In the end, these Executive S&OP Meeting can refine the decision-making process to improve future outcomes.