As I was presenting at the European Supply Chain and Logistics Summit last week, the overriding memory I’ll take away was the number of people that were nodding and pointing at the screen when I talked about how unplanned supply chain events that occur need to be addressed immediately and that they cannot wait to be included as part of a new S&OP cycle.
Traditionally, an S&OP cycle is a process geared towards taking a medium/long-term forecast, balancing with aggregate level resources and generating questions/answers to establish preventative action. Usually it’s seen as a monthly process that follows this cycle:
Collate actual data and perform performance analysis
Gartner recently published their Magic Quadrant for Sales and Operations Planning Systems of Differentiation and we take great pride in the fact that Kinaxis has been placed in the Leaders quadrant and is situated highest on the Ability to Execute axis.
Gartner defines a sales and operations planning (S&OP) System of Differentiation (SOD) as a software solution that supports a Stage 4 or higher-maturity S&OP process. According to the report, Leaders demonstrate “Leaders have a strong vision for their S&OP SOD capabilities. They recognize the role they will need to play in enabling the move toward multienterprise horizontal planning allied with vertical integration that links strategy to operations and execution. They are focused on developing analytics to support end-to-end profitability trade-offs and configurable supply chain design and configuration capability.”1
In this regard, we believe we truly out-execute other vendors in the space. Our proficiency in consistently delivering a quality solution and service to our customers is foundational to our value.
Given the configurability of RapidResponse®, it is an ideal solution to take companies through the various stages of S&OP maturity. Our goal is to both enable quick initial success and help our customers advance their S&OP processes from early stages through to Stage 4 (and beyond) over time by leveraging the full capabilities of our solution.
The following guest blog commentary is contributed by Bob Ferrari, Founder and Executive Editor of the Supply Chain Matters blog and Managing Director of the Ferrari Consulting and Research Group LLC.
We often context and plan supply chain transformation initiatives under the three-pronged perspectives of People, Process and Technology enablers. I would urge transformation teams to seriously consider a fourth component, that being Information, including the velocity, context and clarity of information. While some may be of the mistaken belief that the element of Information is solely the perspective of IT, it is rather a jointly-owned, cross-functional element of transformation.
Across various industry supply chains, a lot of executive level visionary thought and leadership energy is becoming focused on supply chain transformation efforts, namely moving the needle towards more agile or resilient supply chain response capabilities. The reasons are many and varied. Today’s clock speed of rapid and continuous business change requires that industry supply chains be more agile and able to anticipate changes in customer, product, or fulfillment segment needs, quicker than competitors. The complexity and sheer speed of events occurring across the global supply chain implies an exceptions-based focus, allowing advanced technology to monitor and oversee day-to-day customer focused fulfillment. Having a bold vision to the end-state capabilities required across the value-chain is essential. With the increasing demands of online and omni-channel customer fulfillment, the end-state is often defined as the supply chain being more predictive and exceptions-driven in terms of response.
Many of today’s industry supply chain and sales and operations planning (S&OP) teams however, find themselves drowning in too much data while lacking in important insights. Hence transformation efforts can start on the wrong footing.
End-to-end visibility is key to the success of any supply chain today, and especially to Schneider Electric. Huillet says the company needs to be able to monitor product and data from the customer all the way back to the supplier.
Quick, tell me everything you know about supply chain! Okay, maybe not everything you know. I’m pretty sure that would take years with the experience some of you have. Maybe more like the CliffsNotes version. Why? Well, I’m new to the supply chain industry and need to get up to speed in a hurry. I’ve just joined the Kinaxis team as the social media and public relations manager, filling in for the next 14 months, and while I’ve got a great handle on the functions of my role, doing it in the supply chain context is something entirely new for me.
I have to admit that up until recently (pretty much the day before my first interview) I hadn’t really given much thought to supply chains. Sure, I had a basic idea of what they were. Oxford Dictionaries defines a supply chain as “the sequence of processes involved in the production and distribution of a commodity,” but as I’ve quickly come to realize, that short little sentence doesn’t begin to scratch the surface of the vast and oftentimes perplexing concepts that encompass supply chain management.
Even with an established Sales and Operations Planning (S&OP) process, if you’re neglecting forecast accuracy measurement and reporting you’re missing a critical piece of the puzzle for demand management success. Yes, it’s often a difficult, time-consuming and complex endeavor, but not doing it limits the prospects for success for the entire process.
While calculating forecast accuracy is important, it’s not enough. You also need measurement and accuracy reports to determine the effectiveness of the entire demand management process.
There are three main components of a demand management measurement tool and process:
Decide the method to calculate forecast accuracy
Determine how to calculate and eliminate any forecast bias in the process
Manage all necessary data to evaluate the effectiveness of the demand management process
Once these components are in place, it’s time to move on to determining added value in the forecast.
Interestingly, it also describes the warning signs to look for if your S&OP process has fallen off the tracks. I suggest reviewing the blog to get a more detailed explanation of the warning signs, and what you can do to counter each, but I’ll summarize things here.
SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!
Sagar Nadgouda, service logistics manager with Nimble Storage Inc., offers his view on how far companies have come in crafting supply chains that are truly transparent and demand-driven.
One top challenge that companies are facing today is the need to innovate the customer experience, with the help of new information technology, says Nadgouda. A second is the requirement for flexibility in responding to actual demand patterns, with the goal of “making our supply chains more predictive and proactive, instead of reactive.”