The task of supply chain leaders is not easy.
In the last decade they have had to deal with increased variability in demand, an explosion in SKU portfolios, extended supply networks, and fast changing routes to market. All in a period where they have been tasked to slash operational costs in order to free up cash for expansions or product investments to satisfy the ever more informed and demanding consumer.
Many organisations have responded through implementing sophisticated supply chain planning solutions aimed at integrating the demand and supply processes while providing end-to-end transparency. However the impact of these investments has delivered mixed returns, often leaving pockets of improvement but leaving the leadership team unclear about why the overall performance of their operation has not significantly improved.
Implementing a planning system should boost efficiency and create time for planners to use their knowledge and analytical capabilities to deliver a higher quality plan, however this often proves to be a difficult objective to attain. All too often the planning team either become entangled in detailed data maintenance activities or start to develop manual workarounds to real or perceived system issues. This can lead to planners resorting to planning outside of the system. Not only does this behaviour impact planning efficiency but it can also have unforeseen impacts across the rest of the supply chain, as plan changes are no longer visible, the impact of supply interruptions are harder to assess and demand signals are hidden.
If planning goals are to be achieved a commitment to driving user adoption is critical, both in terms of education and training but also in solution design.
In our experience, organisations that apply the following golden rules are more likely to achieve their planning efficiency goals:
- Trust – Planners must learn to trust the solution. It is natural that planners will feel that they lose control as more the plan becomes systemised, and it is therefore important to find a way in the early days of implementation to demonstrate system plan quality and to quickly identify and address issues. To support this, during the solution design it is important to consider how the planner will review the plan, understand its quality and assess the impact of interventions. If necessary, additional reports or KPIs should be developed to support this activity.
- Accuracy of Model – Because planner trust in system plans is key, it is critical that the model accurately reflects the physical material flows and constraints. Do not accept compromises in how the physical supply chain is modelled.
- Data Integration – It is essential that data integration is automated and comprehensive, as this allows the solution to produce high quality plans without a high level of user intervention, re-keying or managing data.
- Planners must understand and accept their change in role – The focus for the planning community should become continuous improvement in how the supply chain is modelled and improving system plans by addressing data or setup issues. They must resist the temptation to work around poor solution plans by planning manually.
- Education – A wider education exercise across the organisation is often highly advantageous so that those responsible for data and process integrity in the operational processes have a good awareness of the impact this has on planning solution accuracy. Tight data integration and automated planning means that small errors or delays in operational process completion, which previously would have been hidden, will very quickly cause a ripple through the information flow and degrade plan quality.
Is poor planning efficiency impacting the effectiveness of your supply chain? Our SAP APO Health Check Service you can help you identify where you or your supply chain management system is failing to deliver in comparison to leading supply chains and provide a clear, actionable plan to optimise your supply chain and begin to deliver on those promises.
Download our whitepaper “Are you Getting the Most out of Your Investment in APO?” to learn more.
For more information on APO Healthcheck services, contact Olivehorse's Business Development Manager:
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