Before Investing in S&OP Software, Get a Handle on Planning Needs

Technology is facilitating Sales and Operation Planning (S&OP) for companies that are intent on aligning demand and supply to drive business outcomes, but the solutions aren't any easier to cull through and select from. In fact, even with the proliferation of enterprise-wide and best-of-breed S&OP solutions, supply chain analyst Lora Cecere says a mere 10 percent of companies are fully leveraging their capabilities in this area.

"Technology has always played a role in S&OP," says Cecere, founder and CEO of Baltimore-based Supply Chain Insights, "particularly when it comes to switching over from simplistic views enabled by Excel spreadsheets to more definitive data models." Cecere says that evolution of technology is critical because supply chains have become more complex, intricate, and global in nature.

Unfortunately, S&OP solution selection isn't easy, particularly when companies jump into the game without a roadmap - something that fewer than 15 percent of firms take the time to develop, according to Supply Chain Insights' research. That oversight can lead to problems down the road, says Cecere.

"Companies have defined S&OP very differently; and there is no one standard definition or a perfect technology solution. Instead, there are many variants," writes Cecere in a 2012 report, Putting Together the Pieces - A Guide to S&OP Technology Selection to Build a Market-driven Value Network. "It is not as easy as picking a solution from an analyst report using a simple two-dimensional grid."

Cecere says users of Microsoft Dynamics and other enterprise systems would achieve better results by getting a handle on their planning needs - and carefully examining operational/constrained supply versus non-constrained supply ...