A period of increasingly free and open world trade that has characterized the past decades appears to be ending, replaced by a new and more challenging era of international commerce. This will pose a significant challenge to most product companies with international operations. Even as they have honed their ability to balance supply and demand, companies are more vulnerable to supply chain issues when events disrupt the smooth flow of goods and services. Organizations can address this vulnerability by enhancing their ability to adapt quickly to environmental changes.
Analysis of our S&OP research suggests that many companies that deal in physical products are doing a mediocre job of sales and operations planning and so may need to identify ways to improve. For instance, one-half (51%) of participants rated their company’s S&OP performance only as adequate while fewer than half that amount (22%) said they do it well or very well and another 22% think their performance is poor. The results suggest that senior executives in companies with only moderately complex supply chains should pay closer attention to S&OP because of the challenges that they are facing today. It’s likely that achieving more effective supply chain planning and management will grow in importance as the journey to a new trade equilibrium is bound to be bumpy.