TABLE OF CONTENTS The meeting structure should be consistent at each S&OP meeting. This allows all process owners to know exactly what to expect and to come prepared with their homework done, ready to reconcile gaps in performance and to share learning. This top-management gathering, which happens every month, should adhere to the agenda outline in Figure 6.1.
1. Review of last 30 days The accuracy metrics by product family are reviewed.
a. Review financial plan accuracy by product family The top-management financial manager (usually the CFO) communicates root-cause analysis of any process variation and actions to improve upcoming accuracy. Because in many businesses the books are not yet closed for the month at the time of the S&OP, the numbers are often built from averages average cost of units per product family and average revenue per unit from the same product families. These estimates can be compared to forecast margin or gross profit. This is another reason to make sure the product families are the right ones. If there are big swings in cost or price within the family, it may make sense to reevaluate the family groupings.
By defining the families correctly and having the spreadsheets available for analysis during the S&OP, management can make better decisions regarding capacity changes or inventory investments. After all, profit is why everybody is at the meeting! When and if the actual numbers available later after the closing do not match, again, great learning can happen as a...
