I came across an interesting presentationhttp://www.linkedin.com/e/-gmos3z-gd2g6xtc-2z/plh/http%3A%2F%2Fwww.gartner.com%2Fit%2Fcontent%2F1411900%2F1411913%2Fsupply_chain_jane_barrett_17aug2010.pdf/OuH_/from Gartnerhttp://www.gartner.com/technology/home.jsptoday. One of the slides included a high level list of capabilities that any S&OP package should have. I’ve taken the liberty of adding my interpretation of each of the key points.
Here are 10 things you should look for in an S&OP software package;
1. Data management and quality - As with any process, the answers you get out are only as good as the quality of the data you put in. A S&OP tool needs to help you manage the process of getting data into ( and out of) your S&OP plan and help you identify and resolve data problems that may exist.
2. Integration into operations planning – S&OP as a plan is useful, but true power comes when the organization reacts to the new plan. Your S&OP tool needs to drive action to the execution team to make the plan a reality.
3. New product introduction and management - New product introduction can be a key strategic factor for your company. Do it right and you are ahead of the game. Do it wrong and you’ll be behind your competitors. Successful companies manage new product introductions as part of their S&OP process.
4. Multi-level and multi-dimensional hierarchies- Corporate and product structures are growing continually more complex. Even small companies can have very complex product relationships. Your S&OP software must be able to represent this structure within the S&OP data and provide S&OP reporting based on one or many of these structures.
5. Assumption tracking and management - S&OP is about making decisions. However, often the thinking that drove these assumptions are lost. Your S&OP tool needs to have a way to track the assumptions that lead to a given direction.
6. Workflow and process management –S&OP is a complex process and it requires multiple inputs. Your S&OP software package needs to guide you through the steps, and track who has contributed and who has not
7. Constraint-based planning – Constraints are a reality. Whether it is a key piece of equipment, or a component with limited global supply, you need to account for the constraint. Your S&OP software package needs to be able to both provide visibility to the constraint and, depending on the nature of the constraint, constraint your demand plan to respect the constrained resource. In some cases, people would like to see both a constrained demand plan (what can I actually do) and an unconstrained demand plan (what could I do if this constraint didn’t exist)
8. Performance management - What gets measured gets done. A key element of S&OP is being able to track performance against various key metrics. Your S&OP software package must support the ability to track various metrics, allow you to chose which metrics to track and report these metrics against different plans so that you can find the best possible path (Hint: See item 10!)
9. Financial planning/budget integration – Businesses do business to make money. Money constrains our business and also allows it to grow. As such, financial considerations are key in S&OP. Your S&OP software package must allow you to see all relevant information in a dollarized view and must allow you to compare key areas to budget values,
10. What-if, scenario management, simulation - When tough decisions need to be made, we often need to explore several different alternatives. Should I run a promotion on this product or should I just cut production? Should I move this production to China or should I try to get a higher price? When working with supply chain, the complexity is too great to allow us to model these possibilities in a simple spreadsheet. You need to be able to simulate these changes and see the impact across your entire supply chain before making a decision. Your S&OP software package must support the instant creation of simulations, the ability to change key factors in a simple familiar interface, and the ability to compare the results relative to your key corporate metrics.
What capabilities are you looking for in S&OP software? Join the discussion and let us know!