I never knew what those three letters strung together meant until I was looking for an inventory planning expert ten years ago. Bob Stahl was the third person I contacted and I was hanging onto every word he was conveying about inventory management. My client agreed, and he was quickly hired as our S&OP expert to take our merchandising planning to a whole new level.
Interview Highlights
S&OP is Still Relevant
According to Bob, S&OP is as foundational as double-entry bookkeeping. The only thing that has changed is how it is used and implemented while adding simplicity to the process.
Balancing Demand and Supply
- negative consequences when demand > supply
- negative consequences when supply > demand
Demand Anticipation
- the focus is not on predicting
- forecasting is not a precise science
- we are no longer a WWII supply-driven economy – why demand anticipation comes first
- size of the business does not matter
- focus forecasting or fitted forecasting is just an assist to S&OP
Removing Complexity
- the volume view
- the mix view
- S&OP is the volume view
- executives focus on the volume view
- managers focus on the mix view
The 3-legged Stool
- market view
- customer view
- modeling view
Sometimes, the distribution will be part of the 3-legged stool. The key point is that any single view does not tell the entire story.
The 60-30-10 Rule
- data competency leads to 10% of S&OP success
- taking data and using it for a disciplined approach leads to 30% of success in S&OP
- the final 60% is about changed behaviors
Other Relevant Key Points
- S&OP works during pandemics
- S&OP co-exists with strategic planning
- D.A.M – the demand anticipation meeting
- the reason Bob likes working with consumer products businesses
Bob Stahl’s Books
Bob is the co-author with Tom Wallace on four books on S&OP. I you want a quick introduction on S&OP, start with The Executive’s Guide down below. The other three are more operational in nature.
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Other Books, Articles and People Mentioned
Reconciling differences is difficult in any setting, especially in an S&OP-mindset-driven organization. Bob’s favorite book in his area is Getting to Resolution by Steward Levine.
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As we were discussing the compatibility between S&OP and strategic planning, Bob mentioned an HBR article by Robert Hayes. The 1985 article is entitled Strategic Planning – Forward in Reverse?
While discussing the 10-30-60 rule which I thought was brilliant, Bob stated that Lora Cecere, a long-time supply chain improvement expert, inspired this mental model. Lora is also a writer and is the Founder and CEO of Supply Chain Insights. My favorite book of Lora’s is Supply Chain Metrics that Matter.
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Bob also has great S&OP content on his website.
Bob Stahl is a Class Act
Yes, we make mistakes. Our interview with Bob was our second. That’s because we botched the audio. I was embarrassed to ask Bob to redo the interview. Let’s see – kind, considerate, understanding, and more. That’s how Bob responded when we asked for the do-over. Millions of thanks, Bob.
Great podcast. I really enjoyed listening. Bob is a client of mine who I have worked with for many years. He is a bright, talented man and you did a great job of getting the best out of him. I learned a lot about someone who I have known for a long time. Thanks for sharing.
Greg, thank you very much.
Concur – I cannot say enough about his enthusiasm and expertise on S&OP. One other point I took for granted after listening to him – he’s very humble.