Recent upheavals in global supply chains and changes in consumer behavior have taxed even the most robust processes used by elite planners on top tier software. Supply chain is the new buzzword, discussed in boardrooms and in mainstream media.
For sure, it’s a great time to be in planning. We know demand planning is the backbone of our supply chain and S&OP is the nervous system that makes it function.
But many times, we fail to give it the necessary attention or perform preventative maintenance to keep our demand planning and S&OP in top condition. Knowing it’s importance and value to the organization, now is a great time to reevaluate the planning tools we use, processes we have including S&OP, and consider upgrading our own skills.
Planning Tools are Good, but…
In this post, I’d like to offer some considerations when looking at the systems, processes and people that manage our planning processes the next time you need to drive improvements.
If we aren’t maximizing the value of our current software, then what makes us think a new one will produce better results?
Too often, we think we need a new tool or the latest software. Maybe that’s true, but my experience suggests that most of us aren’t taking advantage of the functionality offered in our current tools. If we aren’t maximizing the value of our current software, then what makes us think a new one will produce better results?
Most demand planning software use the same sets of algorithms and have comparable functionality
Most demand planning software available on the market not only use the same sets of algorithms but often have comparable functionality. Comparable functionality might include the ability to allow the software to recommend a best pick model, forecast simulations, manual forecast overrides, and outlier detection.
Most of them typically use some sort of internal sources of data like order bookings or shipments and all use varying time increments for forecasting and measuring results.
However, they can differ greatly in types of data available to build models (internal, external, structured, and unstructured data), user ability to interact with the data, segmentation, metrics and even how results can be shared.
Replacing existing software with something new is expensive. The cost to replace software includes not just the initial investment of a onetime implementation fee, but also ongoing subscription fees and costs relating to ongoing training, system enhancements and maintenance.
Before making that investment, make sure users understand how to use the existing tool
Before making that investment, take the time to evaluate the current tools and make sure users understand how to use the existing tool and see if there’s additional functionality your tool offers for the business to use. You own this tool, why not first explore maximizing the value of the existing software?
Examine Your Processes Before Spending Money On New Bells & Whistles
Next, before rushing to replace that tool, evaluate your processes. Complicated or highly manual processes will undermine the efforts of even the most sophisticated software.
Replacing one software for another while continuing to use the existing complicated or inefficient processes will, at best, let us get the same (or perceived better) results faster. That may be worthwhile in the immediate future, but it won’t be long before we’re back in the same situation looking for something “new” to fix our problems.
Another way to look at it: my new software gave the appearance of fixing the issue since I got the results, I thought I wanted, faster, but it failed to address the underlying issues creating the initial problem.
Instead, we should be just as critical of our internal processes, corporate behaviors, and policies as we are to the tools currently used to drive the business. Process issues not only increase the time in our demand planning and S&OP cycles – they also impact the speed of our software and general confusion in the business.
Understanding our process and the relationships it has with our tools is a critical component in understanding if we need a new tool or perhaps, we should re-implement or change how we use the current one.
Check Your Team’s Skills Relative To Industry Standards
One last thing to consider are the skills and knowledge of our planners. We have a team of skilled forecasters but where do their skills lie? For example, they could be skilled in how our company has always done business but not really understand industry best practices or the interconnected relationships with the software.
Our forecasters could be new to forecasting or maybe even veterans loaded with industry experience, but not really understand how our organization runs its business. Just like with processes and tools, skills of our people are equally important in determining the success or failure of our demand planning and S&OP processes.
Understanding the skills of the people currently running our process, and comparing them to the skills we believe we need in those roles, can prove enlightening.
No matter where individuals on your team fall (forecast newbies to veteran planners), having your team network and collaborate with industry peers, participate in conferences and other events, and seek ongoing professional education creates better understanding and provides opportunity to improve their processes. Encourage planners to seek opportunities to learn the new skills needed, perhaps consider being certified as a CPF (Certified Professional Forecaster) with IBF!
Reinvigorate the Tool, Tweak the Process, or Upskill Your Talent?
Demand planning and S&OP are critical in the value they provide to the success of the business. As we function in this highly variable, global market, it’s imperative that we keep up with the latest software and technology available.
However, it’s equally important to keep driving process improvements and keep the knowledge and skills of our planners up to date. Improving demand planning and S&OP processes and increasing their agility is necessary to keep up with the rapidly evolving global market. Ask yourselves if it’s time to reinvigorate the tool, tweak the process, or upskill your talent.
Misty will be speaking at IBF’s Global S&OP & IBP Best Practices Conference in Chicago from June 15-17. You’ll learn the ingredients of effective planning, whether you’re just getting started or are finetuning an existing process. Early Bird Pricing now open – more details here.