Webinar: ‘Reflecting on behaviour would increase effectiveness of S&OP processes’
February 4, 2014
‘In setting up the S&OP processes, the behaviour of people would have to be incorporated in the process design’, says Freek Aertsen, Academic Director for the TIAS Executive Master of Operations and Supply Chain Excellence (MOS) and Director of EyeOn. ‘If you take human behaviour from various fields of study into consideration when setting up a process, you will be rewarded with a more effective and efficient process.’
Image: © Nationale Beeldbank
Why is it important to take human behaviour into account in planning processes?
‘In the operations management field of study we are really very good at devising various models and techniques for improving effectiveness. However, we often pay less attention to the aspect of human behaviour. If one actually took the time to consider this, the effectiveness of a planning process would increase, or the likelihood of a prediction being correct, would increase. A book was recently published on this topic: The Signal and the Noise: Why So Many Predictions Fail. This book clearly indicates that people are not necessarily good at predicting the future.’
What can be improved upon, for example?
‘The book describes two types of managers: the ‘Groundhog’ and the ‘Fox’. The ‘Groundhog’ firmly sticks to his / her opinion, and will defend it to the end. He / she will not alter his / her opinion either. The ‘Fox’ observes his / her environment carefully, and takes action based on this environment. The ‘Fox’ is therefore more subtle. People tend to listen to the opinion of the ‘Groundhog'. Just look at the TV. People who are very certain of themselves often appear on TV, but frequently these predictions aren’t correct. The predictions of a ‘Fox’ often appear to be correct, but since these people are more modest when it comes to their opinions, we have the tendency to ignore them.
If you take the opinions of people from different fields of study into consideration when setting up a process - in other words, adding various truths together - you will end up with a superior process. The manner in which we make decisions in the S&OP process also has an impact on the quality of the process’ outcome.’
A wealth of knowledge on decision making and human behaviour
Is much research being done on this topic?
‘A field of research does exist on this topic, namely Behavioural Operations Management. This field of research looks at the behavioural components of processes. In this field of study we don't see much research on this topic, as of yet, but in other fields of study we do see a wealth of knowledge on decision making and human behaviour. The Journal Operation Management recently published a special issue on this topic. This shows that the topic is becoming increasingly more important.’