The Tyrannosaurus Rex amongst all S&OP Biases

10. January 2022

S&OP without bias seems impossible.ย Much can be gained by creating awareness of different manifestations of bias during the implementation and execution of S&OP.

Here are a few examples of bias in an S&OP context:
โ‡จ โ€œ๐Ž๐ฏ๐ž๐ซ-๐ฌ๐ž๐ฅ๐ฅ๐ข๐ง๐ โ€ is a smart paraphrase for โ€œUnder-forecasting Biasโ€ โ€“ who can be blamed for selling โ€œtoo muchโ€? There may be many reasons for โ€œunder-forecastingโ€ behaviour such as ๐˜ฃ๐˜ข๐˜ด๐˜ฆ-๐˜ณ๐˜ข๐˜ต๐˜ฆ ๐˜ง๐˜ข๐˜ญ๐˜ญ๐˜ข๐˜ค๐˜บ or ๐˜ข๐˜ฏ๐˜ค๐˜ฉ๐˜ฐ๐˜ณ๐˜ช๐˜ฏ๐˜จ.
โ‡จ โ€œ๐Ž๐ฏ๐ž๐ซ-๐Ÿ๐จ๐ซ๐ž๐œ๐š๐ฌ๐ญ๐ข๐ง๐  ๐จ๐Ÿ ๐๐๐ˆ (New Product Introduction) ๐ฏ๐จ๐ฅ๐ฎ๐ฆ๐ž๐ฌโ€ and โ€œ๐ญ๐จ๐จ ๐จ๐ฉ๐ญ๐ข๐ฆ๐ข๐ฌ๐ญ๐ข๐œ ๐๐๐ˆ ๐ญ๐ข๐ฆ๐ž๐ฅ๐ข๐ง๐ž๐ฌโ€ is also a typical phenomenon in S&OP and may be caused by ๐˜ถ๐˜ฏ๐˜ช๐˜ฒ๐˜ถ๐˜ฆ๐˜ฏ๐˜ฆ๐˜ด๐˜ด ๐˜ฃ๐˜ช๐˜ข๐˜ด, ๐˜ฐ๐˜ท๐˜ฆ๐˜ณ๐˜ค๐˜ฐ๐˜ฏ๐˜ง๐˜ช๐˜ฅ๐˜ฆ๐˜ฏ๐˜ค๐˜ฆ ๐˜ฃ๐˜ช๐˜ข๐˜ด, ๐˜ข๐˜ท๐˜ข๐˜ช๐˜ญ๐˜ข๐˜ฃ๐˜ช๐˜ญ๐˜ช๐˜ต๐˜บ ๐˜ฃ๐˜ช๐˜ข๐˜ด, or ๐˜ฆ๐˜ด๐˜ค๐˜ข๐˜ญ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ฐ๐˜ง ๐˜ค๐˜ฐ๐˜ฎ๐˜ฎ๐˜ช๐˜ต๐˜ฎ๐˜ฆ๐˜ฏ๐˜ต. Thatโ€™s not a surprise, considering the huge effort that cross-functional teams are putting into such NPI projects.
โ‡จ โ€œ๐’๐ž๐ฅ๐Ÿ-๐š๐๐ฎ๐ฅ๐š๐ญ๐ข๐จ๐งโ€ after an unexpected business success and โ€œfinger-pointingโ€ after an unexpected business failure are often connected to ๐˜๐˜ช๐˜ฏ๐˜ฅ๐˜ด๐˜ช๐˜จ๐˜ฉ๐˜ต ๐˜ฃ๐˜ช๐˜ข๐˜ด โ€“ because we (our department) โ€œknew-all-alongโ€ how things would turn out with the new product, key customer, or external trend!
โ‡จ โ€œ๐’๐š๐ง๐๐›๐š๐ ๐ ๐ข๐ง๐ โ€ is a metaphor for โ€œUnder-forecasting Biasโ€ and a great example of ๐˜š๐˜ต๐˜ณ๐˜ข๐˜ต๐˜ฆ๐˜จ๐˜ช๐˜ค ๐˜ฎ๐˜ช๐˜ด๐˜ณ๐˜ฆ๐˜ฑ๐˜ณ๐˜ฆ๐˜ด๐˜ฆ๐˜ฏ๐˜ต๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ or political bias โ€“ the less ambitious the budget predictions, the lower the performance target, the bigger the reward for overachieving the target. A clear indication that there is something wrong with the culture, collaboration, and trust within an organisation. Thatโ€™s probably the Tyrannosaurus Rex among all the S&OP Biasesโ€ฆ

I would like to share an insightful article written byย Bent Flyvbjerg about the TOP TEN BEHAVIORAL BIASES IN PROJECT MANAGEMENT. The distinction between ๐œ๐จ๐ ๐ง๐ข๐ญ๐ข๐ฏ๐ž ๐›๐ข๐š๐ฌ and ๐ฉ๐จ๐ฅ๐ข๐ญ๐ข๐œ๐š๐ฅ ๐›๐ข๐š๐ฌ is particularly insightful. Political bias arises from power relations and is especially relevant for big projects and decisions in the middle of organisational pressures.