You can significantly improve your profitability by optimizing your supply chain. The most important tool for that is an effective S&OP solution, so it is wise to choose one carefully. What does the software need to be capable of? What are the most important functionalities for your company? What kind of implementation partner do you require? And out of all the different options, how can you identify the solution that will add the most short-term and also long-term value for your organization? This 5-step plan guides you through the selection process to ensure you choose the right tooling for you.
Sales & Operations Planning (S&OP) can be the source of some confusion because its definition is not set in stone. Some ERP vendors offer ‘S&OP modules’ that provide little more than basic forecasting and planning functionality. Besides that, there are several terms that are closely linked to S&OP, such as Advanced Planning System (APS) and Integrated Business Planning (IBP). So for reasons of clarity, let’s first establish the core functionalities of an S&OP solution. Supply chain expert Lora Cecere refers to the following three components:
So how can you take a step-by-step approach to choosing the S&OP solution that suits your situation?
Forecasting and planning are the top priority for most companies getting started with S&OP. Nevertheless, it is wise to make sure that the solution you choose facilitates the addition of other functionalities at a later stage. For example, most demand forecasting and supply planning modules work with volumes. However, it is interesting to be able to translate volumes into value too in order to see the impact on the bottom line. Some S&OP software also includes a scenario planning option, for instance. So when choosing your initial solution, check that it can be extended with such functionalities.
Thinking about which phase of S&OP maturity your organization is in gives you a good idea of your current priorities. Looking ahead to future phases can help you to see which functionalities might be important later on.
Once you know which phase you are in and where your priorities lie, you can start comparing the various vendors. Bear the following aspects in mind:
Software should first and foremost be a tool for supporting the processes. Your chosen software should also offer you new opportunities to improve your processes.
Collaboration is extremely important – with Sales in demand forecasting, for example, and with Marketing and Finance too in more advanced situations. Therefore, your S&OP software should support that collaboration, making it easier and hence more effective. It could help your Sales colleagues by only requiring them to submit demand forecasts in the case of strongly fluctuating demand rather than for everything. The stakeholder’s user dashboard should only present information that is relevant for that particular stakeholder. This improves both the working atmosphere and the forecasting accuracy, plus it takes up less time too.
That’s why you should also define which processes are important for your organization and which aspects of those processes you want to improve. Those aspects then become key criteria in your selection process.
Finally, you can actually select the software. The possibilities are almost endless. But with so many different functionalities, how can you choose the ones that really matter for your company? That fit with your processes? That really give you a competitive edge in your market? And that add value?
In most selection processes, it helps to draw up a Request For Information (RFI). As a vendor of S&OP solutions, we receive lots of RFIs. We’ve produced a checklist based on the most commonly asked questions in them. This could form a good basis for your own checklist when selecting an S&OP partner. The items on our checklist relate to:
You can use the aspects that are most important for your organization, both now and in the future. By taking this kind of structured approach to comparing potential suppliers, you gain a clear view of the software functionality.
But the second part of the selection process is actually even more important: drawing up a shortlist of vendors and setting up appointments with them. A face-to-face meeting is the only way to discover if you really ‘click’, and if the vendor will not only provide the right software but will also be a valuable partner during both the implementation process and the further development of your supply chain.
In this recording, we look forward to enlighten you on how to implement S&OP software in your IT landscape. Nick Verstraete, Director of Service Delivery, will talk about the challenges, the fragmented landscape and his vision on IT software selection and implementation.