Layering S&OP on Top of ERP: Options that Bring Data into View

In a recent blog post, John Westerveld discussed how the right sales and operations planning (S&OP) software can help companies streamline the S&OP planning cycle and reduce it from weeks to mere days. A business management process that helps firms ascertain optimal manufacturing output levels, S&OP plays a key role in balancing supply and demand, avoiding waste, enhancing top-line revenues, and optimizing production resources.

Enabling the performance improvements that Westerveld, product marketing manager at Ottawa, Ontario-based Kinaxis, outlined in his blog requires a single system that provides global visibility; brings together high level demand planning and detailed supply planning; enables collaboration across all stakeholders; and provides the ability to propose and evaluate possible scenarios.

According to Westerveld, who in a past career managed S&OP for an aerospace supplier, says Microsoft Dynamics ERP users will find that their systems present both challenges and benefits when it comes to effective sales and operations planning. While all-encompassing in nature, such systems present key limitations when companies decide to hone their S&OP processes.

For one thing, Westerveld says ERPs are designed to handle one task at a time. "When you start to look at things in aggregate it all starts to fall apart," he explains, "and you have to use reporting tools that don't have the brains to run the analytics and see what's going on."

ERPs also lack the ability to build and test scenarios, according to Westerveld. A firm attempting to achieve 99 percent service levels versus a current 95 percent by changing safety stock parameters, for example, would want to pose scenarios like:  What does the 99 percent mean ...