Which resources are key in a company?
Which Resources Should Be Reviewed During the S&OP Process? The answer is simple: the key ones. But how can they be identified?
This is where it gets tricky, as the answer usually depends on individual perspectives. Some might say machine capacities are crucial, others might point to the workforce size, while others emphasize the availability of specific people with particular competencies. Yet another group might consider, for instance, the availability of the transport fleet to be key.
This depends on the individual’s role within the company. For example, logistics professionals focus on logistical aspects, while the purchasing department prioritizes supplier availability. It also heavily depends on the company’s business model. Yes, the business model—not necessarily the industry or type of activity. Even within the same industry, companies may operate under entirely different business models and environmental conditions, meaning their key resources can differ significantly.
This leads us to the unfortunate conclusion that there is no universal way to determine these key resources, and each company must figure it out on its own. However, there is hope—a set of fundamental questions can help identify these resources, regardless of the industry or business model.
Let’s start by explaining what we mean by “resources.” These include all fixed, movable, living, human, capital, licenses, intellectual property, or employee competencies. In short, everything required to run a business. Some of these resources are like air—we don’t notice them as long as they exist and function (e.g., IT systems). Others we are keenly aware of, and we often feel their absence or surplus (e.g., warehouse inventory). Therefore, our key resource could be anything—from software to warehouse space, the number of accountants, or the availability of a production line or raw materials.
Key Questions to Identify Essential Resources
Question 0: Can the Company Operate Without This Resource?
This is a fundamental question that helps eliminate potential “false friends” from the list—items that might appear in the next question but are not truly key resources (at least from the perspective of the company’s overall operations). An example might be recreational areas near a facility. Expanding such areas may require decisions made months in advance, placing them under question 2. However, they are not critical resources essential to fulfilling the company’s mission.
Question 1: Which Resources Are the Most Costly?
A resource that generates high costs requires special attention and optimization. Optimization, in this context, means maintaining it at a level where it is neither in short supply nor in excess. Such resources are often people, represented by the so-called headcount. Another example is the broadly understood machinery fleet. Companies aim to avoid situations where machines, often costing millions of euros, remain idle. Unfortunately, this is not an uncommon occurrence. Actual machine utilization rates as low as 30% are not unusual.
Question 2: Which Resources Require the Most Time to Adjust?
Returning to the example of workforce levels: some businesses can increase or decrease their workforce within hours without issue.
Training a new employee takes only a few minutes. The company relies on employment agencies and operates in a region where the availability of workers is, at least from the company’s perspective, virtually unlimited.
However, in other industries, training an employee may take months or even years. Finding a qualified worker on the market can be nearly impossible, even when considering talent acquisition from anywhere in the world.
From this perspective, workforce expansion can be a key resource that requires careful monitoring.
Other examples include machinery, buildings, warehouses, technological installations, and other investment elements, which often take months or even longer to implement. Decisions regarding these resources must be made well in advance.
Question 3: Which Resources Are the Bottlenecks?
A bottleneck is a resource in the supply chain or process that becomes the first to be overloaded as volume increases.
Companies often look for such bottlenecks in their machinery fleet or, more generally, in the production area. However, bottlenecks can also occur in shipping, receiving warehouses, or even the customer service department (in terms of order processing capacity).
Whatever the case, it is essential to identify these as key resources.
Question 4: Which Resources Are the Most Problematic?
Summary
Key resources in the S&OP process are those that directly impact company operations and generate high costs. They may also take time to adjust, act as bottlenecks, or cause recurring issues. By asking a few fundamental questions, organizations can identify these resources effectively, regardless of industry or business model.
Where to Find S&OP Materials
I encourage you to deepen your knowledge of S&OP. You can easily find educational materials online, including my YouTube channel, IBF’s (Institute of Business Forecasting and Planning) YouTube channel, MPM webinars (recordings on YouTube), the first Polish book on S&OP by Roman Wendt, and a free S&OP e-book available for download from my website (PAWELBIRECKI.COM).
Paweł has worked in various industries and held a wide range of roles throughout his career. He’s been a manager, a planner, a lecturer, and even a shift supervisor in a coffee shop. Each of these experiences has taught him how to work effectively with people and how to ensure that processes run smoothly and efficiently.
His core expertise lies in Sales and Operations Planning (S&OP), inventory optimization, production planning, and process management, enabling businesses to align their operations, improve their KPI performance, and enhance financial predictability. Paweł focuses on improving communication between departments and implementing strategic solutions that drive measurable results.
