One version of the truth in S&OP – Our collective memory

One version of the truth in S&OP - Our collective memory

A bad example to start with

The events of 6th January 2021 in Washington DC are still fresh in the mind. A group of people, seemingly encouraged by the 45th President of the United States of America, marched from the Whitehouse. They broke into the Capitol building in an apparent attempt to overturn the result of the recent presidential election and interfere with the peaceful transfer of power. S&OP collective memory

“Seemingly” and “apparent” are the words I want to focus on here. Nobody can really be sure, from his 11,000 word speech, exactly what the President was asking the crowd to do. Should they march on the Capitol and burn it down or just stand outside and make a point?. Analysts will be poring over this for years. They will also look at social media posts from his supporters on that night as they try to make sense of his message. Delving back a little further; they will look at the many different versions of the truth that proliferate on social media platforms.

Clarity and consensus

S&OP is the most collaborative process that exists in most businesses. There are multiple players at different stages, providing inputs, making decisions and implementing the outputs. Everybody needs to pull in the same direction to decide the best tactics to align with the strategy. For this we need clear messages and clear objectives. We do not need 11,000 word speeches, however diverting or inspiring they may be. We do not need the wild west of self selected twitter feeds. We need one version of the truth. S&OP is all about reaching a consensus about what we are going to do and how we are going to do it. 

Building the collective memory

The collective memory in a company is the sum of useful knowledge of historical events that we can use to inform the possible futures. It should be visible, concise and contextual. Before we can understand the collective memory in S&OP, we should look at our individual memories for 2 main points

  • You can’t expect anyone  to remember everything they said – “I’ve slept since then”
  • No one person knows everything

A true collective memory needs to deal with this by recording important points and making them available to anyone who needs to know. This includes people who were merely  “not at the meeting”, as well as people who have yet to go to the company.

Over the years demand planners have been encouraged to make use of comment boxes as they add promotions or other events to individual demand plans. At the beginning of a demand planning project as sales history is analysed for the first time, nobody can remember why sales were up or down for a certain period in the past. Companies ask several people for their recollections. The person who “should” know has either forgotten or left the company. There is usually no collective memory. This is a simple example. Sales history is a linear path, and comments can be made in a straight line.

S&OP and Collective memory

Retaining more complex data where decisions are interrelated has, until recently, been more challenging. S&OP has been performed in spreadsheets and slide decks with a different sheet or deck each month. Decisions from meetings are recorded in meeting reports, if at all. All the important stuff is on email – Delete that mail from your boss at your peril! This tendency has increased in recent months as disruption to supply chains is always good for the suppliers of email server space.

Now we have supply chain systems that are capable of so much more. We have user friendly web based front ends that eliminate the need for slide decks and Excel spreadsheets. In the same system we have all of our demand and supply plans. Not just for today, but in the past too. We also have socialisation within the S&OP system. All of our comments and decisions in one place.

We can, if we are brave, eliminate mail as a source of decision or memory. We can stop the quoting of a mail from 3 months ago as though it were a sacred text. And, on top of that, We can stop the search of mails by sender name (excluding calendar requests and round robins but within a vague timeline) as we hunt for the one piece of information we are after. That one piece of information that is contradicted by a message later on in the same chain, or in another chain. Or in a chat or hangout.

New tools – New rules

The new tools are easy to use  – Dashboards with alerts and tasks along a clear workflow, easy links to decision making workspaces and so-on. Ease of use should not stop us from thinking about how we use these tools. It is easy for the online chat function to become another source of communication that has to be searched, in addition to email. It is also easy for our comments to become unstructured and to develop gaps. 

On the other hand, it is only slightly harder to become more focussed in how we use these new socialisation tools and start to draw real benefits. Firstly, the use of comments.For decision making, we make comments compulsory. Maybe not for all decisions – Does each change in a commercial forecast need to have an explanation?

To take an example, in the S&OP meeting, there is a decision to increase the demand for a category by 10% for the next 3 months. If this is just a number it may be entered almost unchallenged, especially if the most senior person is suggesting it. If this needs a comment or reason, then the thought processes change. Firstly the senior person knows the decision will need to be justified, so suggestions will follow thinking – 5% instead of 10%?. Secondly, as a reason is needed, this gives a pause for thought for the whole team as words are framed. The decision may change in comparison to the initial suggestion (4%?), but it will have a framework and accountability. Next month when the team reviews the decision, the memory will be stronger. If it isn’t at least the comment will remind us why we said 4%.

Secondly, we have the socialisation aspect. This is a working space. So let us not share videos, memes, jpegs and office gossip (OK, home-office gossip) – We have email for that. Let us limit the use of this to points directly related to the job in hand. One more rule. If we make a decision, we record that decision  with the data, not just as part of the chat. 

Conclusion – collective memory and culture

As we make creating a collective memory part of our culture, we clarify accountability and responsibility. More than that, accountability and responsibility become collective. S&OP is the most collaborative process in most businesses; recording the decision making process breaks down silos. Building collective memory in S&OP does not only create a one-truth legacy. It repressess blame culture. Email is not the medium of recorded history. 

Now, too we are increasingly working remotely, whether we are working from home due to Covid, or working with other locations on national and international company wide global S&OP decision making. As S&OP meetings become both more essential and more virtual, it becomes ever more important to build the collective memory with one version of the truth.

We no longer want to look at a number from a few months ago and ask “Did we mean to stand outside and make a point, or were we trying to burn it down?”

Howard Roddie
Howard joined QAD DynaSys at the end of 2018 bringing more than 30 years of supply chain experience to the Services team (He won't say exactly how many more). He has built systems on 5 continents in a variety of project roles. A specialist in Manufacturing and Distribution and an enthusiastic proponent of optimisation and AI technologies, he is as interested in the problems of supplying remote outposts in sparsely populated areas as he is in solving the problems posed by the growth of mega-cities. His idea of an alternative route is an Ice road over a frozen lake.