Implementing SOFP

SOFP Series Blog #8

This is the last blog in this series. In the previous blogs we looked at why SOFP is important to lean organizations and how SOFP is specifically a lean approach. We then went through the 5 primary steps that occur during a monthly SOFP cycle. In this last blog we’ll take a look at how to implement SOFP.

The most important thing to realize when approaching SOFP is that this is a major change. There is a tendency among some people to look at SOFP and say “We do this already. Just we do it in a different way.” Or “We just need to tweak our master scheduling or our S&OP. Piece of cake!!” This is completely missing the point. SOFP is NOT a more formal way of master scheduling. What we are doing with SOFP is updating the company’s business plan every month – and we are doing it with all the various team involved in creating value for the customer, and with the senior executives of the organization.

What will SOFP do for us? A well run SOFP process will give you improvement in almost every aspect of your business. The basics are:But there are a lot more:

Can you put an ROI on all of these benefits? No – but you know it when you live with it. What is the benefit of a calm and orderly process where everyone knows how their work fits with everybody else? What’s the benefit of consensus among the value stream teams? What’s the benefit of eliminating the daily crisis management. Many companies have daily “production planning meeting” where they decide how to ship today what needs to be shipped. This is not planning this is crisis management and expediting.

A well implemented SOFP and lean production creates a calm and orderly workplace, creates communication among the various people involved across the value streams and beyond. Provides team-based cooperation and accountability. Leads to on-going lean improvement.

But (as my friend Bob Stahl observed) “implementing SOFP is not easy because it requires people to make changes – to do their jobs differently and more cooperatively – up to and including the senior executive in charge of the business”

To implement this well requires a good deal of training for the people, assigning responsibilities within each value stream and each step. Identifying the level of forecasting and the methods for forecasting demand. Doing the same for the production capacity too. You will need to develop a clear and formal approach to completing the 5 steps. This will assign who does what and when they do it. You will need to develop the SOFP Planning Sheet and teach people how to use it.

It is always best to pilot the approach in one or two value streams first so that you can get a group of people who have hands-on experience before you roll it out across the company. The pilot will also open up issues and problems you may not have thought about.

It takes about 6-9 months to implement SOFP in an typical medium-sized manufacturing plant. But it takes about 2 years of doing SOFP before you will feel that you have mastered the methods and achieved your objectives. Sometimes more. Don’t be dismayed about this. You only do it one per month and so you only have 12 or 13 occasions each year to work the process and make it better. The continuous improvement is rather slow and involves coordinating a lot of people.

So …. give yourself a break. Don’t expect short term miracles. But you must persevere until you have mastered SOFP and you are seeing great improvements and benefits to your company.

Key to the whole thing though …… Is executive level management driving the process and staying with it – especially when there are “crises” and problems coming right and left. A well planned operation can weather the crises and recover quickly and effectively.

I hope you have found these blogs to be helpful. Please let me know how your own SOFP implementation is working out.

Brian Maskell bmaskell@maskell.com