Sales & Operations Planning (S&OP) is a business process that tends to be in a constant state of change. Even in the earliest days of our so-called technological revolutions, S&OP was a prime area for optimization. In the early years of S&OP, the primary focus was to establish stable mid to long term planning processes; however, today’s dynamic business environment requires agility, cross functional alignment, and proactive orchestration and collaboration on a daily basis across the entire ecosystem.
These concepts are being carried forward into Enterprise 4.0; the latest technological push currently redefining business processes across nearly every industry. Broadly, 4.0 is characterized by taking technology to the next level: artificial intelligence, smart algorithms, advanced analytics, data manipulation, and more. And in terms of S&OP, operators can master these key drivers of change by focusing their attention on specific areas.
Understand the Role of Artificial Intelligence (AI)
The use of smart algorithms for forecasting demand is a common practice among most organizations; however, cloud computing, alternative data, and AI-based automation are creating a new paradigm, not only for forecasting but also for allocation management, risk analysis/mitigation and overall supply chain readiness. For example, machine learning, a subcategory of AI, can take in data from external sources, previous human interactions, and sales organizations to dynamically adjust lead times, safety stock levels, economic order quantities, and fulfillment priorities. Companies that take advantage of these ever-expanding capabilities will see dramatic improvements in revenues, operational costs, and customer satisfaction.
AI is no longer an option for companies dealing with scalability, increasing supply chain complexities, competitive threats or rapidly changing customer preferences. Every company will inevitably face all of these challenges, but only those that implement AI-powered S&OP will survive.
Eliminate Functional Silos
Perhaps more than anything else, Enterprise 4.0 represents a fundamental shift in how organizations view their systems and processes. For example, CRM systems are traditionally used exclusively by sales organizations to manage customer and prospect interactions. At best, summary reports might be used by supply chain planners to manually adjust forecasts based on historical demand. Detailed level CRM data integrated with planning systems, however, can hold a treasure trove of information for forecast improvements and allocation management. Similarly, sales organizations are often completely out of touch with supply chain realities leading to miscued promise dates, customer disappointments, and excessive expedited shipping costs. Integrated systems and end to end enterprise visibility can eliminate these inefficiencies and lead to streamlined and automated S&OP processes.
Embrace the new Agile World of Microservices
While the days of mainframes and midranges are long past, many companies are still entrenched in legacy S&OP systems. Business leaders necessarily demand faster innovation, but IT organizations are stifled by monolithic systems that often take years to upgrade or customize for even the smallest gap in functionality.
Microservices are small independently deployed applications focused on delivering a specific solution to a specific problem. Programs written in the microservices architecture are easy to understand, develop, integrate and test. As an example, in the case of providing a better promise date to customers as described above, a microservices app could retrieve product availability data from an SCM system, and populate a Salesforce record in real time. This would allow salespeople to give reliable and accurate delivery information to customers and eliminate the manual effort typically required to track down that type of information.
Small interlocking microservices applications help companies permanently solve problems on a weekly or monthly basis and eliminate the thought that new enterprise functionality can only come from wholesale replacements of early 2000’s technology – making continuous improvement much more than just a cliché.
A Push Towards Smarter S&OP
Your company is likely already feeling the pressure of staying up-to-date with these advancements, but they’re an essential part of staying competitive in an increasingly crowded global marketplace.
Look at it this way. Enterprise 3.0 was about taking an active, hands-on approach to S&OP with the goal of long-term efficiency. Enterprise 4.0 is about moving this one step forward to create a self-driving supply chain; a digital transformation that drives out supply chain costs through better forecasting, inventory and order management, more efficient shipping routes, and overall, better operations management.
Are you ready to take that step in taking true control of your S&OP process? Request a demo today!