When the forecast becomes fraught with errors, individuals within the organization begin to question the need for a laborious S&OP effort. As an alternative, they might recommend going with a "gut feel" for developing a forecast. According to Gatten, however, "this is exactly the time you need rigorous data analysis and open, cross-functional communication. You need to stay on track with S&OP."
For an S&OP manager, extensive communication among principals is the key to maintaining a hold on the process. "Make sure you have the pulse on what's going on in the marketplace," Gatten says. "Talk to operations leadership about issues like excessive inventory." At all times, communication should be "open and honest."
It's important to reach beyond the company's walls to external supply-chain partners in order to obtain a better demand signal. In difficult times, says Gatten, "people tend to hunker down and stop communicating." The opposite should be occurring. One technique that Emerson deployed was to move the executive S&OP meeting in front of the functional one. The change allowed executives to be better informed about what was going on, and helped planners to gain approval for the forecast more quickly.
Another tip, says Gatten, is to look at the statistical forecast model and re-weight planners' emphasis on history. Emerson placed more emphasis on the nearest three months of actual data, so that the forecasting tool could better detect changing trends in volatile times.
