The face of sales and operations planning (S&OP) is changing. Gone are the days when sequential, isolated planning and monthly meetings based on out-of-date data are sufficient to drive stability and success.
End-to-end initiatives now span beyond the confines of a single company’s supply chain, encompassing extended supplier and customer value networks, as well. Digitization, sparked by the rise of the Internet of Things (IoT), the expanding number of connected devices and big data, is driving a shift in consumerism. Your company needs to keep pace, or risk falling behind forever.
The reality is, supply and demand waits for no one — not even your executive team.
Running a profitable global business requires speed and agility in both strategic and
tactical planning. But transitioning to a new way of looking at S&OP means saying goodbye to scheduled decision-making, a frightening thought for many. It may seem like an impossible step. How can you let go of the security of regular meetings planned weeks in advance? Or the safety of knowing those big decisions only come around once a month?
We got to this state of scheduled decision-making through siloed business functions, disparate data and technology limitations. We’ll overcome it by looking toward a future where S&OP processes run continuously and collaboratively. Driving this shift in process is the notion of concurrent planning – the ability to continuously and simultaneously plan, monitor and respond to changes in a single supply chain management solution.
Concurrent planning bridges functional silos and connects all nodes in the supply chain, enabling cross-functional coordination and faster, more effective decision-making. It allows you and your peers to seamlessly scenario plan across multiple time horizons, providing improved performance and profitability. It also helps solve the planning horizon challenges many organizations now face. Namely, bridging activities for short-term planning (low impact, high frequency) with long-term planning (high impact, low frequency), and accounting for high impact, high frequency events.
The future of S&OP is collaborative decision-making and perpetual planning. This revolutionized way of looking at planning concurrently could shift business processes and supporting organizational structures. Frequency no longer becomes a limiting factor, and the resulting faster scenario analysis and simulation will enable efficiency and cost savings.
But getting to a state of concurrent planning requires several foundational capabilities within your supply chain system.
Traditional simulations take time and often happen in silos, ultimately slowing down the time it takes to analyze data, model options, make a final decision and get the necessary buy in from other functional business areas.
Having the ability for anyone to run a simulation using any data at any time, and then share the results with others in the supply chain means a more effective way to connect data, process and people within a single system. It creates the ability to ask the right questions of the data and provides a record of the answer, and the decisions that led up to it.
Gone are the days when planning for a single function happens in isolation. Collaboratively making decisions allows faster, more efficient understanding of the end-to-end impacts of potential choices.
Collaborative decision-making is ushering in an era where informed trade-offs are being made. Instead of working toward individual objectives, everyone is working toward the same set of corporate-wide metrics.
In many cases, data manipulation, what-if scenario creation and collaborative discussions are taking place across multiple systems. And with the time it takes to circulate all the relevant information to the decision makers, it’s likely you’re only capturing the end results, not the debate and trade-offs leading up to it.
In order to learn and grow from past mistakes, we need to understand why we made a particular decision in the first place. That means capturing the context as well as the outcome—providing a better picture of cause and effect.
The rapidly increasing pace of business demands changes to current S&OP practices, and advanced technology is making it possible through concurrent planning. It’s time to step away from siloed, scheduled decision-making and move toward collaboration, and parallel planning.
Learn more about the future of S&OP and how to get there with our eBook, Powering the future of S&OP: 3 capabilities to fuel your journey. Download it now.