As demand planners/supply chain planners, we now have a range of advanced supply chain planning solutions available to us. The options are wide-ranging, but one thing is becoming increasingly clear – the value of demand planning/S&OP in the Cloud. Here I share my implementation journey at De La Rue, the world’s largest printer of banknotes, and listed on the London Stock Exchange.
New Tools Mean New Opportunities For Connected Supply Chains
Anaplan has made big strides with their UI and core engine with a renewed focus on supply chain; SAP is solidifying their position in the S&OP space with their IBP solution capitalising on their immense footprint and legacy solutions, connecting with their existing, more traditional core ERP; and Microsoft Dynamics seems to grow exponentially in both connectivity and functionality with seamless integration across business areas starting with CRM.
Even Tableau, at its core a data visualization tool (and a very good one at that) is adding more and more functionality to their inbuilt logical functions suite to run more complicated computations. In short, we have a lot of sophisticated solutions to choose from.
Throw in some SQL skills (which is increasingly common for a supply chain analyst) and you can have a custom, self-service solution built in no time!
S&OP In The Cloud Is The Future Now
I was recently involved in designing and developing custom supply planning solutions using Cloud software. As a supply chain professional, I can’t stress enough the importance of tools that facilitate a medium-long term vision for managing a global demand collection cycle, data analysis, and RCCP planning for a number of global manufacturing sites (covering a big chunk of the S&OP cycle). Thanks to the Cloud, this was managed through a single, central location, without ever relying on IT.
While there were challenges, there is a simple way to implement Industry 4.0 cloud solutions to run not only a fully connected supply chain but to facilitate full Integrated Business Planning (IBP).
By sharing lessons learned from my own implementation, I am hoping to give you a blueprint for selecting connected planning software.
What Does Your Planning Software Need To Do?
You have two overarching goals when it comes to software solutions:
1. To establish a centralized approach to run a global supply chain that will drive major short and long-term decision making for the company.
2. To establish a straightforward way of designing and implementing a fully connected global planning system, including advanced manufacturing and scheduling.
For me, the first takeaway is clear. Make no mistake, this is the way forward! Going forward, traditional supply chains will fundamentally change. Supply chain/demand planning will expand its responsibilities, and will empower decision making across an organization. Some organizations have embraced this already, some are trying, and many are yet to consider it.
Most medium and large enterprises are not in the position to unlock the full potential of their existing data.
Now, let’s focus on the second point, the systems that should empower this vision of the modern supply chain. This is easier said than done. Without one of the best of breed solutions, most medium and large enterprises are not in the position to unlock the full potential of their existing data. Nor will they benefit from a fully connected environment.
The Problems Of Trying To Make Legacy Systems Work
Many companies are still plagued my multiple legacy systems that do not “talk” to each other and require extensive capital and resources just to keep them operational. This is where we are at in my current company. We are at the stage where some progress is being made but a strong foundation is lacking.
And this is no surprise. Experienced systems consultants have had to scramble and acquire new Cloud skills and brilliant graduates are grasping the new technologies and solutions well but lack the functional knowledge. Given that stakeholders will often rely on the experts (that’s us), this means there’s a gap between the functional knowledge and technical expertise that needs to be closed as soon as possible. Generally, supply chain leaders and consultancy firms are waking up to this emerging need for a hybrid mix of skills.
The S&OP Implementation Vision
Below is our S&OP Process vision. Take a few minutes to digest it, because it informs every stage of the design, implementation, and adoption process.
“To provide the required functionality that will enable the wider business planning functions to Plan, Execute and Deliver in a Fast, Connected and Sustainable way against our customer expectations, while providing the required Visibility for the business as whole”.
This is the first starting point for any systems implementation – a clear, strong vision that identifies goals and the purpose. This is your first priority, not a document with detailed requirements or organizational design. Those can wait for a bit.
The rationale behind the keywords in our S&OP Process vision is:
Plan: Be able to collect, analyse and run scenario planning against finite and infinite capacity before committing to the best operational and financial outcome for a given opportunity.
Execute: Be able to run advanced scenario planning for manufacturing scheduling, making the best use of available plant resources.
Fast: Enable quick decision making centrally through connecting commercial demand and RCCP, cutting down the noise and letting manufacturing focus on execution.
Connected: Support a multi-site environment managed through a central location with data flowing back and forth continuously.
Sustainable: Implement the vision while sticking to the budget and further leveraging systems for lean business execution.
Visibility: Enable easy to build, fast and powerful reporting functionality leveraging all available data produced by the above, providing “live” visibility of all levels of hierarchy in the business.
Fully understanding this vision and respecting it as much as possible during the design, implementation and adoption phases is critical to having the right solution in place and selling it internally.
Don’t make the mistake of looking at systems implementation as only an IT implementation!
In many cases, a major change in systems causes subsequent changes in processes, but you still need the right approach for the system’s design. Having in mind the longer-term game of how that will affect processes is crucial for people change management. Don’t make the mistake of looking at systems implementation as only an IT implementation! It’s not. It’s about both systems and people!
The more connected the system’s architecture, the more synergy this will drive down the line for process alignment and adoption, which is key. In other words, it’s not only about “systems driving the right business behavior” or “business process design driving systems implementation”; both are important but on their own neither facilitates an optimal long-term approach.
It’s about making sure the wider vision for systems implementation considers the desired state of business processes and requirements while remaining as connected as possible in order to encourage adoption.
Challenges In Systems Implementation
You should expect some bumps along the way. Some of these are:
– Software being developed for only some areas to save time, not taking the full picture into account in the design phase, making it significantly harder to build and implement any changes down the line.
– ERP not being equipped with functionality for all business areas yet, i.e, advanced scheduling solutions, forcing sometimes complicated links between these niche applications and the ERP which adds cost and complexity.
– Connectivity issues between the core ERP and 3rd parties that are often prone to user error and require manual interventions.
– Continued use of Excel based reports and exports which are updated offline only.
– Disconnected operating sites using their own in-house built tools (still a widespread practice).Lack of scenario planning functionality meaning it is often done in Excel which is prone to errors and time consuming.
– Lack of functional expertise which causes stakeholders to misinterpret key S&OP/demand planning concepts.
Conclusion
What is your experience with supply chain planning systems based on cloud solutions and what do you think the areas of improvement are? Maybe you are currently on this journey and have some key elements to share, at least conceptually. What are they? Or maybe you’re a supply chain consultant dealing with design and implementations – how do you guide your clients to achieve a more connected business environment?
I hope this article has provided some food for thought. I am happy to discuss S&OP systems implementation with both experienced practitioners and people just starting to build their roadmap. Contact me at cristian.circiumaru@gmail.com, connect on LinkedIn or comment below.