World Class Sales & Operations Planning: A Guide to Successful Implementation and Robust Execution

Chapter 12: The S&OP Process in Service Industries

Every company has a common belief at the start of the conversation on process change. It is usually stated like this: You do not understand; our business is different. Even a good friend of mine, who works in government agency social services, used that statement the other day. The reality is not as clear, however. In fact, there are many commonalities from business to business many more than differences at this level. Service businesses, from a standpoint of S&OP, are not very different at all from manufacturing firms. If you substitute the word service each time product or units are described in the normal S&OP process, the descriptions generally work as stated.

TYPES OF SERVICE ORGANIZATIONS AND APPLICABILITY TO THE S&OP PROCESS

Several different applications of S&OP are described in this section. It should become obvious that this process will work in just about any business and create value. The following lists are not complete but are instead a sampling of various businesses to give a better, more clear idea of the possible application of the S&OP process. Hopefully the variation is enough to give a sense of the application of S&OP. It would take too many pages to name all of the potential applications.

  1. Engineering services groups In the mid-1990s AlliedSignal s Transportation and Power Systems Group (now Honeywell) set out to apply the Class A ERP model to its engineering services group. The S&OP process was, of course, at the top of their business model. The company quite effectively planned...

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