Five Ways to Conquer Supply Chain Disruption With S&OP Technologies

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Five Ways to Conquer Supply Chain Disruption With S&OP Technologies

November 18, 2022 Sponsored by Logility  in SupplyChainBrain

Supply chains large and small are under siege by constant disruption. Companies find themselves struggling to serve customers, source materials, manage costs, handle supply constraints and shortages and, above all, gain visibility into what’s next. 

Thanks to technology, however, the headlines aren’t all bad. The latest generation of sales and operations planning (S&OP) applications are providing better tools for managing supply chains internally. And they’re enabling companies to plan collaboratively beyond the four walls of the enterprise. These new S&OP platforms utilize artificial intelligence (AI) and machine learning (ML) to support better, faster and more inclusive decision-making. 

Following are five emerging areas of rapid development in S&OP, underscoring how companies today are using the technology, what they’re getting out of it, and why this new inclusive ecosystem approach to what was once a status process can be transformational. 

 Functional collaboration is essential. 

The chaos of the last few years has been unprecedented. But for supply chain, there’s some good news coming out of the current environment. As a corporate function, supply chain is now front and center in the C-suite, no longer a secondary player in the boardroom. 

At the same time, the C-suite is morphing to include more parties at the table — a greater cross-functional mix of players from all walks of the organization. Sales, finance, operations, marketing and supply chain are working together more closely than ever, ushering in the development of next-generation S&OP technology platforms. 

The C-suite is investing in S&OP platforms that are capable of covering the supply chain end to end — designed, in essence, to work the fragility out of their operations and build in more real-time resiliency. Indeed, all internal and external resources must be coordinated and integrated for a successful aggregate plan. 

 Technology is increasingly in focus. 

To operate in this new environment, enterprises now recognize the criticality of having a single data set — one version of the truth, designed with different “views” and supported by AI, ML, scenario planning and analytics, probability analytics and other smart decision and analytics tools. 

Decision-making gets smarter when it’s augmented by powerful analytics, ML and AI. As Gartner analyst Amber Salley observed, “With the capabilities we have today, we can solve problems in a matter of seconds. We’ve come a long way.” Now S&OP platforms are hardwired with AI and ML, as well as gamification, pattern-recognition algorithms and scenario-building and assessment capabilities. 

The bottom line: Managing with five disparate systems cobbled together through data translation layers and application interfaces is no longer sufficient to operate a world-class supply chain. And forget spreadsheets; they’re not integrated databases but rather reside on individual desktops and the like. As one consultant commented, “Why do people keep using them? Because spreadsheets are easy, and everybody knows how to use them.”  

 Process decision points are becoming more frequent. 

Planning and process decision points are moving from, at best, a once-a-month schedule to a continuous flow. A set, rigid periodic planning cadence schedule is no longer sufficient. 

The process of S&OP is rapidly transforming to a far more dynamic, real-time capability. Early versions of S&OP were about balancing supply and demand on an almost entirely tactical basis and, as noted earlier, reliant on spreadsheets. Spreadsheets were the tools most people used to muscle their way through this onerous tactical process.  

Today’s S&OP platforms provide sense-and-respond intelligence analytics on both the supply and demand sides of the equation. As Gartner explains in a framework for designing a supply chain strategy and process matrix, this enables companies to gather data and transactions and plan, forecast, measure, decide, collaborate, design, simulate and execute operations.  

 These better processes, which consider longer-term, strategic goals as well as shorter-term tactical ones, can be much more focused on generating profitable growth. Advanced S&OP technology also empowers supply chain executives to look at the level of risk and take steps to mitigate it.  

 Scenario planning is becoming vital. 

Today’s S&OP technologies enable effective scenario planning. Companies can “game” different strategic scenarios and, using AI and ML, see how these myriad scenarios will play out in their supply chains. They can operationalize scenarios and aggregate or disaggregate them to see how they might impact performance and profitability throughout the enterprise. This eliminates or greatly reduces the risk factors involved in making strategic business decisions. 

Scenario planning creates a proactive means of managing risk and results. Adoption of scenario-based planning moves businesses away from the old paradigm of waiting for something to happen and then responding — hopefully successfully — but always at a cost in the form of lost sales, market share, or business opportunity.   ...  '