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EXECUTIVE SUMMARY Countless manufacturing companies have tackled the challenge of implementing S&OP. Those that have nurture the process to maturity reap considerable benefit streams. However, service sector companies- with no products to buil no inventory to ship, and no shelves to stock-have missed out on similar advantages simply because there's no unifi process model for mirroring the integrated planning strategies of the manufacturing world into the real of service.
One of the more interesting informal discussion topics at business forecasting and supply chain conferences centers around a simple question: Could the S&OP process be leveraged in non-product service industries such as (but not limited to) municipal government, school systems, universities, and correctional institutions, or in non-public service sector organizations such as consulting, banking, and financial services? Over time, these informal debates became personally intriguing, leaving me scratching my head and wondering- could there be a better way to plan the service sector, and could S&OP be the answer to an unasked question?
With my curiosity aroused, I set about looking for S&OP processes in the service sector, focusing my personal lens on examining planning processes of all sorts and types. After more than a decade of casual observation, I offer with certainty that there are forecasting and planning processes with varying degrees of maturity and efficacy being used in most service organizations. I am also aware that only a handful of these service-sector planning processes are as sophisticated as a mature S&OP process, and none these were actually called S&OP. As I prepared for this article, I deepened my search, and with the exception of the occasional informal debate, I found only scant treatment of service-based S&OP in literature such as technical journals or white papers. Service-based S&OP it seems, is about as elusive as the Loch Ness Monster.
S&OP PROCESS
It may be useful to step back for a moment and define the S&OP process. For the uninitiated, S&OP is a rigorous, multi-step, cross functional, mid- to long-range planning process model that is heavily deployed in manufacturing companies. The S&OP process uses a series of monthly review meetings to help facilitate alignment and collaboration. The first step in S&OP, a demand review meeting, is meant to build consensus around demand. The unconstrained...