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S&OP Process and NPI
There are kinds of projects defined as innovation for the next years. Some projects are incredibly ambitious and impressive in terms of their stakes and impact on the company’s market. Yet all these projects started! Some are successful, some quickly abandoned, and others remained in the project portfolio pipe, but all already started. If we … Continued
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Agilea
- Create a connected disposable packaging
- Propose 3D impression for medical Prosthesis
- Define Virtual/alternative currencies (such as Bitcoin)
- Green computing
There are kinds of projects defined as innovation for the next years.
Some projects are incredibly ambitious and impressive in terms of their stakes and impact on the company’s market.
Yet all these projects started! Some are successful, some quickly abandoned, and others remained in the project portfolio pipe, but all already started.
If we talk with the Project manager, some of them will tell us they should never launch the project when they did, but they did not know of any means to stop their brilliant and ambitious engineer teams.
In Supply Chain, a process makes the incoming flows of forecasts, orders, and other elements possible: The S&OP process 1.
Therefore, we can ask ourselves: How do we incorporate new projects into the company’s Supply Chain Process?
Our proposal is a three steps approach:
1 / Use the 6-question method on innovation developed in this article.
The principle here is to test the integrity of the idea by understand/validate that it indeed brings an improvement, reduces/eliminates a current problem, and does not pose a particular implementation problem.
• By using this approach, we observed that we delete 30% of the ideas, but above all, we frame the remaining views much better.
2 / When this idea is validated, we will measure this idea’s financial impact both on the investment side (number of hours of work, investment to be made) and on the potential turnover.
At this point, we can see the impact of the idea on the company’s business plan. We can update an NPI2 review in the S&OP process with these different elements.
Besides, as mentioned in the Adaptive S&OP body of knowledge of the Demand Driven Institute, it is recommended to record the assumptions that would validate the associated Business Plan plausible (or not).
• Then, we have a financial framework containing a set of assumptions that may or may not validate this idea.
3 / Define the critical resources with defined tags
There is a flow of projects in progress and ready to go. How will this idea fit into these flows?
We recommend that you use the tag mechanics.
Indeed, in your project flow, you have more critical resources than others, you have more essential waypoints than others, a more or less consumed buffer.
It’s time to ask how do these tags behave on the current project flow?
Depending on their condition, we can use it to help the project management team make a decision. The team can assess the state of the operating model of the current project portfolio.
So with these three elements, your project is integrated into the S&OP process:
- One framework resulting from a relevant questioning
- A business plan based on different scenarios based on assumptions
- A state of the operating model of your project management
You are in an excellent position to lead a decision-making meeting around your choice of projects to start.
Note that this S&OP sub-process is used well beyond new products!
How would your business benefit from testing these continuous improvement ideas in a process like this?
Please do not hesitate to contact us to discuss it face to face.
1 S&OP = Sales and Operations Planning
2 NPI = New Product Introduction
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