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The Impossible Puzzle

If your organization’s success depends on the efficient performance of a supply chain, social distancing has likely exposed the weak points in your processes and your foundations. Working in supply chain today can feel a bit like blindly putting a jigsaw puzzle together. The question we are all asking ourselves is, “What is the key to overcoming the disruption and uncertainty caused to supply chains by COVID-19?

We believe it lies in your data. Your Sales and Operations Planning (S&OP) will be as good as the data that it relies on and as efficient as the accessibility of the teams’ data. For that purpose, we explain how planning for demand correctly, accelerating decision making, streamlining reports, and reassessing your leading indicators of success can be done by migrating your S&OP process to the Cloud. If your supply chain data still lives in a spreadsheet, this is for you.

Sales & Operations Planning (S&OP) is a critical subset of overall business planning that aggregates information from across the entire business into one integrated plan. Its overarching objective is to manage and allocate a company’s critical resources in the most efficient manner to satisfy customer needs.

S&OP’s highly structured and disciplined decision-making process has always been critical, especially for B2B and B2C organizations, but in today’s business environment, it is even more relevant. Successful S&OP programs lead to improvements in product launch execution, forecast accuracy, product margins, inventory productivity, excess write-offs, and better on-time and in-full order fulfillment to customers.

S&OP at its core includes four key activities:

  • Data collection
  • Supply and demand planning
  • Pre-S&OP reviews
  • Executive S&OP reviews

The typical timeline will cover ~2-18 months, which is significantly shorter than the 1-5 year timelines typically seen in strategic or long-range planning.

One common mistake when reviewing your S&OP program is to isolate planning to specific functions as opposed to the wider business. S&OPs that only focus on their supply chain functions, such as demand planning & forecasting, sourcing, and manufacturing, are missing out on critical data from other areas of the organization. For example, sales and marketing teams are constantly monitoring early demand signals that can significantly impact the demand planning process. This, coupled with their perspectives on new customer accounts (which could identify one-time demand and supply events), is data often missed in forecasting.

Another common organizational pitfall is the lack of integrated planning for new product launches. Successful launches depend heavily on product, sourcing, manufacturing, sales, account management, and demand planning teams being synched on timing, allocation planning, and inventory flows. Organizations that don’t share information and plan together often encounter problems down the road that could have been avoided.

From a technology perspective, S&OP processes are often inhibited by the complexity surrounding data collection and storage. The rate at which data is being transmitted to organizations is only increasing. Data is coming to us in all shapes and sizes and from all locations. The process of ingesting, cleaning, and storing all of this data has traditionally been a very manual and difficult process, and this is where technology should be added to the equation.

One of the largest dilemmas today that organizations are facing is the task of gathering and collecting all of the data from the different aspects of the supply chain. This data comes in different speeds (realtime, hourly, daily, weekly, etc.) and different shapes (structured and non-structured). A lot of modern data tools today can help with this. Data management technology has advanced in the past 5 years, yet most organizations are still using spreadsheets to manage their data. We propose to look to utilize modern data technology tools.

By collecting your data and storing it in a cloud data platform, you are then able to leverage all of the other data tools that are available. All public clouds have a robust set of analytics and visualization tools available. Organizations that can visualize their supply chain data have an enormous advantage over ones that can’t, as being able to have a strong grasp of your data for agile decision-making is critical for organizations. Clouds also have the ability to grow in storage capacity as well as scale compute power up and down. These are very difficult things to do when you manage your data in your own data center. Having this flexibility gives organizations the agility needed to make quick decisions regarding their supply chain.

A core part of the S&OP process is the ability to report on a set of dashboards and metrics to empower decision-makers in your company. Traditionally, this information has been gathered from numerous sources and put together into spreadsheets or presentations. While implementing S&OP in your company will allow you to bring together all of the relevant planning functions into a single room in a disciplined manner, migrating the data these functions provide to the Cloud to create a digital twin is what will allow you to keep your supply chain running efficiently.

If you are working with visualizations on a spreadsheet today, you are only one step away. You do not have to start off with all of your data. Start with one small thing that is causing you pain right now and fine-tune your process over time. The decisions you make today will set you up for long-term success.

Interested in continuing the dialogue about the challenges to expect when migrating to the cloud?

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