S&OP and SIOP. Two concepts that I have seen used in job descriptions, resumes, supply chain meetings, ect. These are often two concepts that I have seen being used interchangeably – which can be misleading. In summary, S&OP and SIOP are different levels of maturity in an organization – with SIOP being the more mature of the two.
S&OP processes will generally consist of the following meetings in a monthly cycle:
Demand Planning –> Supply Planning –> Cross-Functional –> Executive Review
If I am working with a company that is starting from scratch, the above is the general method I advise them to start with. It’s the foundation that is needed to develop the communication aspect that is so critical for success during these implementations. A general rule of thumb is one of the above meetings should occur once during a monthly cycle with one meeting occurring each week.
For example:
October
Week 1 – Demand Planning
Week 2 – Supply Planning
Week 3 – Cross-Functional
Week 4 – Executive Review
SIOP processes are built off the above, but have more financial influence. For example, understanding inventory levels and their impact on financial projections, cash flow, and other metrics. There tends to be a deeper sense of accountability, higher amounts of Executive exposure and support, and the process is overall viewed as a fundamental company backbone. The additional meetings and checkpoints that occur can vary within organization, as true SIOP processes are not completely cookie cutter and are molded to make a specific company the best in class.
I advise companies to start with S&OP, and give it time to mature. This is not something if done correctly is done in a month or two. Each meeting has a specific purpose, inputs, and outputs. Teaching the variables to an entire organization is a tedious activity and a lot of organizations require S&OP/SIOP specialized consultants to come in and help set-up the structure. The length of time to set-up for each company can also be varied depending on the current state of the company.
S&OP and SIOP is critical for supply chain success. If your company does not have one bringing the idea to the table will help make you a valuable asset to the company.
Supply Chain Nerds 