S&OE: The Main Lever to Improving Customer Service Levels
When it comes to operational execution — which demands rapid response to exceptions — teams are fighting against old information, slow response times, and costly last-minute expedites to maintain service levels.
It’s time to arm teams with the tools to drive efficiency and repeatability into their exception management, so they can reduce operational costs while significantly improving customer satisfaction.
The Great News
Here are some steps teams can take today to begin setting a foundation for a structured S&OE process.
Constrain scope wisely
Don’t confuse starting small with starting within one team. Supply chain is by nature a multi-function operation, and therefore, requires multi-function execution flows. Instead, consider starting with one product line or business unit. This horizontal approach will help solidify a cross-functional foundation while also proving value quickly.
By tracking how long each sequential exception takes to get resolved and what it took to resolve it, supply chain teams will start to learn what additional information they need, what techniques produce the best results, and what areas need the most attention.
Set up a virtual center of excellence that focuses on problems spanning every function (e.g. inventory, sourcing, manufacturing, and logistics). This team will create and publish incidents as they arise, assemble cross-functional teams (e.g. by bringing together key people from logistics and planning to reduce route lead-times), assign owners to drive to the end-to-end objective, push third party partners to collaborate, and essentially connect the dots of your operation between external and internal teams.
Did you know 60% of service levels do not live up to S&OP projections?
Download our 2019 Benchmark Report on the state of S&OE (sales and operations execution) in today’s Fortune 1000 companies.
Follow an S&OE Drumbeat
In order to instill these practices into the DNA of the organization, it is crucial to set up a monthly S&OE drumbeat. The drumbeat is the operating cadence used by teams to derive insights from S&OE. The purpose of the drumbeat is to put in place the right operating model that will drive incident resolution, continuous learnings, and overall process improvement.
Don’t shoot the messenger
Mission critical to the success of building an S&OE process is support and encouragement at the executive level. Surfacing an incident means asking teams to point out problems rather than sweeping them under the rug. If teams are punished for flagging issues “that shouldn’t have happened” rather than celebrated for tracking incidents, setting a structured S&OE process will fail before it even began.
You’re Closer Than You Think
Getting your supply chain organization on the right track for supply chain automation is very much within your reach. Because digitizing S&OE means taking small steps in the right direction. By using tools that support executional best practices and taking measures to instill these behaviors into the DNA of your company, you will lay the foundation for a truly digitized, seamless supply chain.
Arm Your Teams with the right tools for S&OE.
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Learn 5 Tactics to Jump Start Your Supply Chain S&OE Center of Excellence
Establishing an S&OE center of excellence can help organizations extinguish fire-fighting while increasing revenue, reducing inventory costs and optimizing productivity. Learn how to jump start your S&OE center of excellence in this handy guide.