Handling Change: There’s an App for That
Eighty-nine percent of business leaders are either experiencing or anticipating external volatility or change to impact their business, according to a recent survey. And 91 percent expect internal change in products, channels, services, or markets to create planning challenges.
Given that most business leaders must manage some sort of change within their demand-supply networks, why is it that their Sales & Operations Planning (S&OP) processes are based on the paradigm of "business as usual?" Why do their companies emphasize a rigid, prescriptive approach to managing the S&OP process when business does not behave in that manner?
It is disheartening—but not surprising—to see the schism between corporate strategic goals and the goal of the S&OP process. But this, too, is beginning to change.
Many IT organizations are entrenched in traditional, inflexible enterprise resource planning systems that constrain their ability to respond rapidly to market conditions. Add to that, the challenge of managing a proliferation of standalone systems for supply and demand planning, and business intelligence that require significant integration to work together.
Business leaders are looking for change in their systems to accommodate inevitable change in their businesses. They are not trying to change their existing process to a one-size-fits-all approach, but looking for ways they can augment industry best practices with innovations of their own.
Supply chain technology should not only enable process, but also flex with it. When new elements are added to the business—such as new products, services, channels, and distribution and logistics changes—it should be easy to identify their impact on the overall business.
Better yet, just like with your iPhone, wouldn’t it be great to know a tool exists to help make business decisions—that "There’s an app for that?" There can be.
Supply and Demand Tools
Every organization has a different S&OP process. Although consultants may provide a prescriptive process with four to six steps, the reality is there are specialized issues each company needs to face and consider while modeling business planning processes.
Just as the iPhone provided a platform for developers to easily create custom apps to meet an endless list of unique needs, so can an open business planning platform work for business planners, partners, and others to build simple apps that sit on top of their master S&OP planning system to adapt their S&OP process for unique—and changing—needs.
Here are a few examples:
- Demand Policy. A need is emerging across many consumer and discrete manufacturing customers for a demand policy optimization tool that stratifies the corporate product catalog into products that can be statistically forecasted, versus those that have to be dealt with in a collaborative manner. Leveraging a cloud-based planning platform, a demand policy optimization app was recently built in a matter of weeks, and integrated with the overall workflow.
- Segmentation. Similarly, many companies across industry sectors struggle with connecting S&OP strategies to supply execution. Segmentation lays the foundation to bridge that gap by providing S&OP-level product segmentation based on demand and supply characteristics.
- Stocking Strategy. The power of open apps really gains traction when one app lays the foundation for others. The segmentation app sparked another team to craft a stocking strategy app that translates product segmentation and target service levels into cycle and hedge stock, as well as replenishment parameters. Execution systems easily consume the parameters to drive alignment with S&OP strategies.
The consumerization of IT has driven a far more accessible, and immediate by-product for business applications. Now, for business planning, a cloud-based open platform delivers a best-practice S&OP foundation that can be easily augmented with specific/custom process apps.
Advantages include easy upgradeability; a growing selection of apps across different industries; an innovation platform that enables consultants, academics, and organizations to develop and encode their apps for internal use or enterprise availability; and seamless delivery in the cloud.
When it comes to making your business more agile, do you have an app for that? If not, now there’s a quick way to get one.