We believe that in many companies the S&OP process like a means without an end. We run our monthly S&OP meetings, discuss back and forth, take decisions, or sometimes don’t, but in general we lack a stronger purpose, and as a result, we see at best a spotty attendance by the CEO, who seems to live and run a parallel world.
The strategic benchmarking technique developed in our book “Supply Chain Strategy and Financial Metrics” changes this. We have shown that our ultimate objective as a company is to generate shareholder value as measured by the Return on Capital Employed or ROCE. We have also shown that different strategies are different routes to generate that ROCE.