• Strategic Planning: Not sure, certainly doesn’t flow through to us. Score 0-1.

• Managing and Leading People: Although the results aren’t that dramatic, we felt good about this. Score 3.

• Driving Business Improvement: Well, we think there are some encouraging signs like this meeting. But before these last two days, we have done nothing but firefight. We’re not aware of any initiatives affecting us. Score 0.

• Integrated Business Management: Sorry Greg, but whatever processes there are, and we know you hold some forecast meetings, they don’t seem to do anything for us. The Checklist reads like they should. Score 1.

• Managing Products and Services: Where do I start! We found the concepts and practices being referred to are exactly what we need, but we don’t have any of them. Integration of plans is nonexistent. We’re in a totally reactive mode. We each use our own version of project planning, and we have no mechanism to plan for resources except to work harder even though we’re already on overload!” This brought an unsympathetic groan from the other participants. “We just try to do our best, but we don’t really track progress or spending as the Checklist suggests. We usually catch major quality problems prior to launch, but have to correct a good many after launch. The Checklist refers to a Stage and Gate type development process that Charlie in our group has used in another company, but poorly, as he explains it. I can’t say we have any process that meets those Checklist criteria. And as for project planning milestone performance, what milestones? We’re almost off the scoring scale, and I don’t mean on the high side. All in all, we felt fairly depressed until Dan came in and helped us stop flogging ourselves over our shortcomings. If we’ve understood correctly what’s required, we’d have to score ourselves 1.

• We didn’t know enough about the other definitions to score, except Demand Management where we concluded there was none. Score 0.”

• Integrated Business Management: We do a lot of work each month pulling together our numbers, and initially scored ourselves 3. But later, Tom came in and asked us to reread the definitions and descriptions. It didn’t take me long to change my scores. Others on the team, with varying degrees of reluctance, changed their scores as well, with one notable abstention.” David made a note and would try to determine who that was. “We do hold a type of Demand Review each month, but where we fall way short of the requirements is that we spend all our time talking about the hot products, backorders, and anticipated volume for the next few weeks. Some questioned the value of thinking further ahead since it’s just a theoretical exercise. We’ll have to resolve that concern later.” Roxanne intervened and said the upcoming education would cover all these process issues, and she stressed the word “process.” Jeff continued. “It all went downhill from that point. Tom stayed with us during this part of our meeting. It was very helpful to get his clarification as we went along. We have both demand and supply planning activities, but as for being integrated . . . I wish. We have no policy document for reference. I could go on and on. Greg, bottom line, we just aren’t doing Demand Management. We do some forecasting and then hope like crazy the customers do what we forecast! Scoring was problematic; a few people thought that from a simple demand perspective we were doing fine. The rest of us thought that you couldn’t take an isolated demand perspective. So our score is 0 or 3 depending on the perspective. You choose!

• You’ve heard about Managing Products and Services from that team; I guess overall we concur with their comments, although we scored it 0.

• Managing Demand: Before we read the through the definitions, we thought we’d score 4.5 (excellent), or even 5, on the first requirement, definition 6.10, about having an ‘Unconstrained Demand Plan.’ We are expert in asking for all the demand we want and then some!” This brought some raucous laughter from the others present. “What brought us back to earth were the requirements at the next lower level of detail, the descriptions. A few of us thought those requirements were unreasonable, and I noted that on our summary for David. But most of us began to see something new and powerful in what we read. Personally, I found it exciting and inspiring. Without going on forever, we at best have poor compliance with ownership, accuracy measurement, horizon, and detail; and no compliance with assumptions and time fences. So I’ve recorded my view of the score, which is not a consensus, of 0.”

• Strategic Planning: There is little evidence that business strategy influenced the way the supply chain was designed and operates. So we scored it a 1.

• People Processes: Like the others, we enjoy working for this company and we get along well with senior management. Training is available for those who want it. There is a good deal of communication, but it is borderline frenetic and focused on the most recent crisis, which means we only hear the latest concerns and what we are doing wrong, not the broader picture of what we should be doing. Specifically, communication out of the monthly supply meeting is sketchy at best, and priorities that are communicated are often changed within 24 hours. Very recently, we have observed that the Leadership Team seems committed to change things for the better. Unfortunately we’ve heard this before. Nevertheless, we’re hopeful and scored this area 3.

• Driving Business Improvement: When we looked at the requirements we could see that our history of firefighting and heroics stops any serious compliance with these best practices. Nothing is sustained. Score 1.

• Integrated Business Management: Some of us have experience with S&OP from our past in other companies. We used that experience to help us understand the questions. Our response to this section of the Checklist was a bit of a downer; we could see intention, but no execution. For example, we don’t adequately include products and portfolio in the plans, and demand discussions are more about SKUs than about families. Supply numbers seem to be about unchangeable finished goods production plans. Our focus is always on surviving the next few weeks or months. There are no longer-term plans; resource planning is based on the ‘give it your best guess’ algorithm. The final killer for us in this area was the ‘one set of numbers’ requirement. We scored this 0.5.

• Products and Services: We don’t have ‘integration’ of requirements; we have unilateral ‘insertion’ of requirements into our schedules, usually without warning. There is no ‘New Product Master Plan,’ and the modus operandi is reaction instead of planning. But somehow we do launch new products, albeit usually late and requiring postlaunch modifications. We gave it a 1.

• Demand Processes: These are weak or nonexistent; for example, there is no process to track assumptions. We sell products, but we don’t manage customer order-promising, meaning we often fail. At the aggregate level, not aggregates by families, but aggregate for the entire business, there are numbers that probably aren’t too far off. But numbers at that aggregate level are just not useful for planning. Score is 0.5.

• Supply Chain Management: Product does move through the supply chain, but more by luck than planning, and with huge inventories that usually seem to be of the wrong products and wrong components. We noticed that no one has mentioned Data Management. Not surprising because data management processes for the supply chain are informal. They are not managed, not audited, and not even on our radar. Some team members think we might be okay and that I am a bit obsessive about this. But I learned a long time ago that without validation of the accuracy of basic data, we won’t know if it’s accurate, and should suspect the worst—which is exactly what we experience. Score 1.

• Internal Supply: We covered the inputs and outputs, not what happens in between. We left that to Sandy’s team who’ll be covering this [see Figure 13.1]. Depending on which numbers you take, internal supply does a good job delivering against its own plans, but a terrible job against actual customer orders and warehouse replenishment requirements. From our perspective, this is 1.

• Managing External Sourcing: Since purchasing falls into the plants’ planning responsibilities, you would think there should be some supplier plan stability. But there isn’t because of all the emergency orders released inside lead times. And we’re too busy to be proactive about incoming quality; we react to the occasional bad quality delivery by screaming at the supplier. As for supplier relationships, I’m sure if they didn’t need our business they’d fire us! We threaten them with termination if they don’t jump through hoops to get parts to us within days when the agreed lead time is weeks. Sadly we had to rate this 1. That’s it.”

• Integrated Business Management: We provide good numbers every month. We’re not sure what others do with them but from our side we score this one 3.

• Strategic Planning: Since we haven’t gotten any input about strategic planning from corporate in the past, Tony set up a process for us to develop our own operating strategy before he left the company. Tony always said the rest of the organization would do well to catch up to us. So, and not to boast, we gave ourselves a 4.

• People: We’re a very effective team, except when Sales comes along with an unreasonable request. We work hard on developing our people, and have good communication processes among ourselves. Score 3.

• Managing Products: We experience the vacillations of poor decision making in the product area, but we’ve buffered ourselves with time and budget to cope with most of it. Score 3.

• Managing Demand: This is the bane of our existence. Demand is out of control, and we need to keep them at arm’s length to stop them from disrupting our performance. Clearly their processes are very poor. Generously, we scored this definition a 1. In truth, we have internal processes to buffer us from their demand swings, but there’s no integration processes. We work to meet the major plant objective of being productive and efficient. Perhaps the one exception is linkage to financial planning. I mean we get reports every month, so something must be working, although we often don’t agree with the variances reported. Overall Score 2.

• Supply Chain Management: No real comment here. We ship product out when it’s ready, but occasionally have nowhere to put it. After considerable debate we scored that a 2.

• Internal Supply Chain: This is where we spent most of our time. For the Master Supply Planning requirement, we have a master supply scheduling process, although we don’t call it that, but it doesn’t seem to match up to the definitions under this topic. That’s probably because of the industry we’re in. We do consider all demands, but we have to move around those that don’t fit our planning model. All our plans are valid and conform to our utilization and overhead absorption goals, although for some reason these important objectives aren’t mentioned in the Checklist. We do rough-cut capacity planning. We do use the ERP system. We enter our plans into the system every day after we have rebalanced our schedule in the Excel spreadsheets that Tony put together for us. We have to use those because much of the information in the system is inaccurate. The spreadsheets work well and we do load the schedules into it, so we feel pretty good about this area. As everyone knows, we have capable people, and we encourage them to get appropriate qualifications. Our Master Supply Schedule drives all our planning activities. We update it whenever we need to; we weren’t sure what ‘in a timely manner’ meant, but we think we’re okay. We’re the experts, of course, at Material Requirements Planning. Clearly we’re doing this or nothing would get out of the plants. We weren’t sure what ‘formal system’ meant, but we guessed it meant ‘done by the material planners,’ so that’s okay, too. We create purchase requisitions whenever stock hits a reorder point, and we tell our suppliers, so we’re okay there, too. For Capability Planning, we don’t use a finite scheduler, but we know what capacity we have and are scheduling longer production runs to maximize output. We’re clearly capable in this area. As for demonstrated capacities, we tried creating schedules with them a couple of years ago, but that just didn’t challenge production people enough, so now we create schedules that keep the pressure on production to raise the output to higher levels than in the past. Based on our experience, we know this is the right way to run our business and motivate production departments. The Checklist’s wrong on the next point. It says the plan should be ‘refreshed daily,’ but that isn’t necessary because we don’t intend to change our plan. So we update the schedule weekly and completely revise it monthly. That takes much less time than what the Checklist says is required. As you can see, we think our processes are quite a bit advanced over the Checklist. We scored ourselves a conservative 3 since there must be ways improve our processes.”

• We work to the schedule, keeping a close eye on utilization, of course. We often need to resequence orders to reduce total changeover time. Despite our time fences, we still have too many changes. We’d prefer a four-week fixed zone, but we try to be flexible when it’s really necessary. We respect the intermediate production schedules from the material planners even when we think they’re wrong. We record all our activities on production logs that the supervisor sends back to planning every couple of days to put into the ERP system. So in that sense, we’re definitely using the ERP system. As to safety and housekeeping, we have an extremely good safety record for our type of industry, including a Georgia OSHA award. We are strict about cleanliness and orderliness; we conduct housekeeping audits every week. We meet the latest schedule as closely as we think is reasonable, but efficiency and utilization goals have to be met. Most of us wanted to score ourselves 4, but the nonproduction people on the team disagreed strongly. So to reach consensus, we scored ourselves 3. That’s about it.”

• Strategy: Agree it’s about 1.

• People: We thought 2.

• Improvement: It seemed to us it was ‘on hold’ rather than active, so we scored 1.

• Integrated Business Management: We agreed with 1.

• Product: Nothing to add to the other presentations: score 1.

• Demand: Same deal, 1.

• Supply Chain: We’ve heard a lot about that, and we’d agree with most of it. Score 1.

• Internal Supply: Obviously we have a good deal of interactions with planning and production. Despite the upbeat comments from the internal supply team, from our perspective internal supply is pretty weak, so we’d score it 1.

• External Sourcing: Not a lot of experience here, so we opted to give it a 2.

• Data Integrity: Although not a chapter in the book, this is our favorite subject and the one we spent most of our time discussing. Some of us have been through ISO9000 audits in our previous lifetimes, and our view is that we don’t have robust data processes.”