In a previous blog I highlighted that the term ‘Supply Chain Planning’ is not a new one, but what is rapidly changing is the increasingly dynamic nature of modern day supply networks and their need for endless inter-connectivity between supply & demand. The questions are simple right; what to buy, how to buy, when to buy. I also highlighted that one of the key factors in us seeing a ramp up in Supply Chain and S&OP use cases here at Bedford is credited to Anaplan’s continued advancement in this field. With the release of a number of new accelerator apps, clients can get an immediate sense of how these business functions can truly integrate in a real-time platform.
I’m not saying that on day one post download you will be up and running with an integrated model, that’s simply not attainable as companies will have differing S&OP definitions but what you can now believe in is a platform which can empower you with the modelling capabilities to deliver this solution in a flexible and collaborative manner. In a business function where legacy issues have arisen with disjointed technologies, clients have questioned how to best piece the different components together and therefore neglected the core principles of delivery; an effective requirements plan. In a lot of legacy cases, the technology restraints have formed a company’s roadmap perception rather than the roadmap itself truly shaping the deliverables and success criteria of an implementation. The criteria must shape the outcome; What are we trying to achieve? How can we measure the success criteria? How can we best align Sales & Operations?
So how do we go about it….
Operational Plan – we must ensure that our plan represents appropriate constraints, variability and current capabilities of operations. This of course is an on-going exercise, which needs to be reflective of changing technologies, customer base, delivery points and shipment structures, otherwise the plan will lose credibility within the organisation.
Balance Demand with Supply – we need to understand the true trade-offs of volume and product mix to balance customer service and inventory plans in order to best tie off against our supply strategy. Not an easy task, but with flexible ‘what-if’ scenario driven modelling it is now possible to look at many differing balancing factors without creating wholesale changes to a model.
Maximise Profitability – commonly dubbed as Integrated Business Planning [IBP], we now look to have a clear supply chain strategy where the best results will occur when the process is iterative: starting with demand, passing to supply modelling & inventory management, and then overlaying financial impact and analysis. This process will generally require multiple cycles hence the importance of a truly integrated and collaborative platform.
Key questions in understanding these stages: What is being sold? What should we make? What should we distribute?
Below are a few of my favourite myths commonly associated with S&OP:
• Supply Chain moves so fast that it is impossible to plan accurately;
• We can do it just as good in excel;
• You don’t need a technology to effectively plan Supply Chain;
• S&OP is DEAD…….
I just don’t buy it and in my opinion the opportunity to automate your S&OP is too great to pass up!