What’s Wrong with your Supply Chain Planning System: Twelve Symptoms
The right SCP technology avoids key symptoms that reduce planner productivity,
plan timeliness and plan usability.
Doctors look for specific symptoms when diagnosing what’s wrong with a patient. Now with Gartner’s help, supply chain execs can do something similar with their supply chain planning (SCP) system. In a recent report (What’s Wrong With Your Supply Chain Planning Technology, 18 August 2017), Gartner analyst Tim Payne lists 12 symptoms that keep supply chain organizations from moving to higher levels of maturity. They are:
- Too much manual intervention – SCP technology should integrate the planning functions in a unified model so planners don’t have to move data themselves between stakeholders. Also needed is technology with algorithmic underpinnings that automate much of the labor-intensive work. If that’s not happening, too much manual intervention ensues.
- Can’t easily collaborate – A single, integrated SCP solution should allow key stakeholders from planning, sales, marketing, finance, and production to collaborate, as well as simulate inventory and service levels to evaluate trade-offs. Otherwise planners are forced to go outside the model via email and phone calls.
- Can’t create new reports – You should be able to create reports that helps you understand “what to improve next time”, says Payne.
- Not granular enough to identify impact of events – Gartner recommends SCP technology with “respond planning” capability to identify root causes and quickly replan without firefighting outside the system. The system must be able to disaggregate demand down to the SKU-Location, and support what-if simulations to react quickly to exceptions.
- Using ungoverned Excel – Excel spreadsheets are a sign of broken systems that are not adequately supporting the organization or the process.
- Not getting timely plan/scenarios – “The scenario is out of date by the time we get it,” is the common refrain here, according to Payne. As companies “integrate plans across their supply chains, their planning models grow in size and complexity. This makes scalability and performance even more important.” In-memory computing can help, accelerating information retrieval from all levels of planning—strategic, operational, and execution—to sharpen decision making and speed planning.
- Plans are isolated/separated from the execution environment, commonly heard as “We can’t answer that question until after the next planning run.” Payne says that the system must integrate inventory optimization and replenishment into the demand forecast model. It should be able to quickly generate new, granular plans to mitigate the need to put out fires.
- Plans are not integrated horizontally and vertically across the enterprise which commonly surfaces with the statement “Our plan is right, theirs is the one that’s wrong.” Instead, your SCP technology should generate synchronized plans “across different time horizons as well as different levels of granularity.”
- Inability to support execution of business strategy – The technology should be readily configurable to make plan and supply chain changes that stay abreast of both current and changing corporate goals.
- The system, not the business, runs the business – Your SCP technology should not produce “hard coded” plans, but rather, enable speedy remodeling of the chain. Supply chains today must quickly adapt to changing circumstances.
- One-size-fits-all planning – Companies are increasingly segmenting their supply approaches based on products and customers that vary in importance and margin yield, says Payne. SCP software must support segmentation and clustering of different customer slices within a single, unified planning schema.
- The plan is not resilient enough to variation – Today’s demand and supply chains are volatile and getting more so. Therefore, medium- and longer-term planning needs to be resilient, executing even with “real world variation getting in the way,” says Gartner. The use of a more probabilistic planning approach helps in this regard, says Gartner, although companies need to be prepared for a mindset change in some cases.
If you have more than 1 or 2 of these symptoms, please consult your physician (or a ToolsGroup office near you).