Step 4. Partnership meeting. The purpose of this meeting is to make sure there is a consensus reached between Finance, Engi­neering, Sales/Marketing, Planning, and Manufacturing on meet­ing the company game plan. Any and all issues and problems preventing agreement or consensus are discussed. This is the most important meeting in the entire SOP process because it is where the key business issues and problems are addressed by both sides of the Demand = Supply equation. Also, solutions and alterna­tives are discussed and agreed to. The decisions that come out of this meeting will have a major impact on the ability to meet the customer expectations in a timely manner, while maintaining maximum flexibility and minimizing the cost of doing business, inventories and backlog levels.

The end result of the Partnership meeting is to document the solutions and alternatives. The cost of the recommended solutions is determined. Any solutions where agreement or consensus cannot be achieved also are documented.

An agenda is prepared for the final SOP meeting. The agenda should be in all the participants' hands at least three days before the SOP meeting. This will allow people to come prepared to the SOP meeting.

Step 5. Sales and Operations Planning meeting. Key and aggregate performance measurements are reviewed. Also reviewed is the impact on the sales plan, RONA, cash flow, profit, on time performance, net operating income, gross margin, major capacity and facility needs, new product introduction, sales/marketing, and operational key issues. This meeting should not be a detail review of everything. The issues, solutions, and cost in resources should be clearly and concisely presented. The SOP meeting addresses the Macro issues because the Micro issues have been discussed and resolved in the first 4 steps.

85-90% of the focus in this meeting is on the future. That is, starting with Month 3 and looking out into the future in a proactionary manner. Review the issues and solutions that were agreed to in the Partnership meeting. All open issues, problems, and recommended solutions/alternatives that were nol agreed to in the Partnership meeting are discussed. Decisions are made. Agreement is reached on the solutions. Accountability and respon­sibility are assigned for solving the problems in a timely manner. Authority for implementing the solutions is then delegated. A consensus is reached on the company game plan. The SOP information is finalized and documented in the minutes of the meeting.

What has happened in the SOP process is the development of both

a horizontal and vertical partnership that cuts across the traditional functional silos. The required involvement, ownership, and buy in for a single company game plan that now exists because people at different levels in the organization were involved in helping set a company game plan.

The people who will be assigned responsibility and accountability for executing the plan have been actively involved in setting and agreeing to the plan. People Empowerment/Participative Man­agement now becomes a reality. The "feet and mouth" are in synch—words are followed by specific actions. The Sales and Operations Planning process now becomes the powerful compet­itive tool that it was designed to be.

So, if your company is struggling with the SOP process, then review the 5-Step SOP process to see if each step is being performed at a high proficiency level.

Following the 5-Step SOP process will help give your company an SOP tune up. It will help guarantee a more effective and productive use of your company's scarce resources. Effectively using the Sales and Operations Planning process will give your company a competitive advantage.

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