Having spent significant number of years professing the need for continuous Sales and Operations Planning (S&OP), it was sheer co-incidence that four of my customer meetings in the past seven days involved conversations on topics that in some ways impacted S&OP, and most importantly around Excel being used as its technology enabler. The meetings raised great questions bound by economics, practicality and simplicity, which defines the very purpose of this blog. Excel, to-be or not-to-be, the data-propagator for S&OP?!
S&OP has been in existence for ages, and it is the fine art of balancing demand, supply, operations and finances with the core objective of reaching corporate consensus on a single operating plan that would help business exceed the performance targets. Interestingly, there is no one-size fit-all approach to practicing S&OP since various factors such as Industry-domain, company-size (also read as wallet-size), geographic diversity and most importantly the corporate culture defines how S&OP gets implemented, executed and institutionalized. Despite the variances, what remains common are some of the top challenges in securing a superior Sales & Operations Plan, and they are the lack of:
1. Rapid Scenario Planning – Capability to simulate and perform what-if analysis prior to consensus planning and commitment
2. Visibility and Capability to manage by Exceptions
3. Valid Data – due to Data Latency, Inaccuracy and/or Absence
4. True-collaboration with Trading Partners (TP)
5. Rapid Trading Partner On-boarding and Enablement
Given the known-limitations with Excel, it is inappropriate to look up to Excel to solve 1 and 2 above, though I have seen in my experience, Excel has been put to a good use with certain extended enterprise capabilities in a limited-scope environment. Clearly, Scenario Management and Exception-based planning are in the enterprise planning space and hence require an optimization engine for constrained planning, analysis and reporting. With these capabilities enabled, even large companies with deep pockets find challenges in creating a superior S&OP due to the aforementioned other three reasons. It is because the root cause of the problem is not just a technology issue, but a people and business process issue, and most importantly an ‘Information Accessibility’ issue.
To elaborate further, though the enterprise planning solutions does have the capability to enable the Trading Partners (TP) with simplistic interfaces, in reality, we end up pushing the large percentage of less-sophisticated TPs into using less-friendlier interfaces when they are not just prepared for it. End-result, external data from across numerous sources fails to arrive on time. With the current luxury of cloud computing and Integration as a Service, this problem can be fully be solved to the excitement of both the S&OP implementers and their TPs, if Excel beco mes a synchronous, real-time, data-sharing interface that would allow the players to truly collaborate on their demand and supply all the way from short term (frozen and firm) to long term (plan) time-frame.
With Excel as the front-end, integrated to ERP systems through IaaS brokers, we have a simplistic yet powerful solution in place that allows for limited collaboration yet with data accuracy and relevance (capture real-time demand or supply constraints right from the source and propagate to targets over the cloud).
With this data-centric approach, a constrained-demand plan is close to reality, where demand signals are truly pitched against the supply/capacity constraints from the global supplier community. Shown below is a very rudimentary view of how Excel can be used to share demand and supply data over the cloud using Excel as the front-end for Trading Partners.
Bottomline, while I clearly do not advocate the asynchronous use of the spreadsheets as the sole-solution behind S&OP, it is still a great tool to propagate shareable data from the less sophisticated trading partners, when tightly coupled with enterprise systems. With that said, I shall leave it to you to call the verdict! Please send across your comments.
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SMB Supplier’s Apprehensions |
Buyer’s Concerns |
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· SMB Supplier’s perception – “Arm-twist” control attitude versus long-term partnering relationship |
· Commitment from suppliers on “dedicated supplier capacity” of buyer-scheduled supplier resources (Capacity commits) |
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· Financial (high TCO) and Skill-set constraints in embracing enterprise solutions |
· Reluctant and lack of supplier’s participation in low cost regions |
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· Need for a simplistic interface to view and share data with suppliers |
· Excel friendly yet tightly integrated to Enterprise systems to ensure ‘single system of truth’. |
