The 4th part of our approach focuses on the importance of supporting the S&OP process with a robust and appropriate Information System. This Information System can be based on several software packages.

Four software families to support S&OP

In general, an S&OP process relies on an ERP (Enterprise Resource Planning), accompanied by a BI (Business Intelligence) tool. It can also use an APS (Advanced Planning System) to support the “business” processes inherent in S&OP. And depending on the issues at stake, an EPM (Enterprise Performance Model) can reinforce the collaborative aspect of this process.

Implementing these software solutions helps to anchor the S&OP process within a company over the long term. What’s more, the right combination of software makes the process more efficient over time. Last but not least, S&OP tools make it less dependent on the employees involved..

S&OP information systems: each to his own role

ERP and BI tools, which transform raw data into relevant, usable information, provide a picture of the past and present. They are useful for analysis.

An APS, on the other hand, envisages a probable future over a 12 to 24-month horizon. It calculates and plans forecast demand. It also plans production, supplies, distribution, inventories, etc.

Moreover, with its solvers, an APS optimizes results while respecting capacity constraints. It also “penalizes” plans that fail to do so. Calculating the capacity freed up by reducing the complexity of the range is an example of optimization. The aim of APS is to project future demand. It also means planning the industrial and logistical resources that will best meet it. In addition, its data feed into the construction of scenarios as part of the S&OP process for arbitration by the Managing Director.

Azap, QAD Dynasys, Futurmaster, O9 or SAP/IBP are examples of APS solutions.

EPM to manage the S&OP process

In order to develop and align all company functions around scenarios, in terms of volume but above all in terms of value, it is worthwhile implementing a cross-functional simulation and collaboration tool.

Through configurable workflows, the system should enable all players to play their part in the construction, validation and prioritization of scenarios to be presented to the Managing Director and his Executive Committee for final arbitration, during the executive S&OP review.

Scenarios can be studied from an industrial, logistics and procurement angle. For example, we can calculate the ROI (Return On Investment) if a 3rd shift has to be added in the factory to meet increased demand. Scenarios can also be business-oriented. For example, we can calculate the ROI of setting up an additional promotional operation on unsaturated lines, to reach its budget target.

Scenarios need to be modeled, then managed collaboratively by all key players. This is typically the function of EPM software, such as the Board, Anaplan or Tableau platforms. As Information Systems supporting S&OP, some APS also offer similar pre-packaged functionalities

.The importance of an S&OP culture

But let’s be clear. Technology and digital tools will never replace a virtuous organization and corporate culture. They must foster teamwork and constructive conflict resolution. They must also equip themselves with data analysis skills. Last but not least, they must ensure that the Managing Director and the Executive Committee are capable of arbitration.

These topics will be covered in the next article.

And you, which Information Systems do you consider relevant for running a successful S&OP?

A PROJECT? A QUESTION?
CONTACT-US !

Olivier Gautier
Director at  chez DIAGMA

Previous articles on S&OP :

 ALIGN YOUR S&OP WITH YOUR BUSINESS STRATEGY 

BUILD A MORE EFFICIENT S&O PROCESS

FEED YOUR S&OP WITH EFFICIENT BUSINESS PROCESSES