Part 1 of this blog series talked about my attendance of the APICS 2009 international conference in Toronto, Canada in early October. I attended few education sessions, as my conference visit focused more on exploring the expo floor and talking to the exhibitors.
My overwhelming impression from the conference’s expo floor was that its main value proposition this year revolved around the flavors of demand management, most notably Sales & Operations Planning (S&OP). Part 2 analyzed the traditional shortcomings and the reasons for the S&OP concept’s (and accompanying software solutions’) current renaissance in light of its existence of a few decades.
Part 3 then analyzed the key success factors of deploying S&OP solutions and approaches, while Part 4 analyzed the role of top management in deploying S&OP solutions, as well as the strategic nature of S&OP. Part 5 will conclude by analyzing the S&OP solution from JDA Software as another product that arguably deserves to be in the S&OP Top 5.
My guess is that Nari Viswanathan, Aberdeen Group’s vice president (VP) and principal SCM analyst, who recently coauthored the S&OP AXIS Report (subscription required)and was mentioned in Part 2, did not lump JDA together with i2 Technologies, Oracle, and Demand Solutions (as the vendors that are reportedly leading the software category) due to its nascence in the market.
Development on S&OP was in place at Manugistics long before JDA bought the company in 2006. The S&OP solution would be yet another synergistic development that has come out of the successful merger of these two supply chain management (SCM) vendors. Some possible contribution by JDA to the original S&OP solution could have come from JDA providing better store-level visibility to a CPG manufacturer than Manugistics could. However, that knowledge is the province of the data aggregators like IRI, Vision Chain, and companies of that ilk.
To fully realize the power of a robust S&OP process and for customers to make their baseline supply chain data even more accurate, a number of underlying JDA Demand and Supply Solutions can enable an even smoother and more accurate analysis to further strengthen their integrated S&OP processes. These capabilities, which are similar to Oracle’s S&OP philosophy of bolstering the basic S&OP processes (described in Part 4), are as follows:
Enter S&OP Workbench
In his series of papers on S&OP, Dr. Larry Lapide of the MIT Center for Transportation and Logistics, says that an S&OP Workbench generally supports two types of information needed to be shared during cross-functional S&OP meetings.
First, the workbench can generate dashboards to display a multitude of metrics that portray the planned supply versus “unconstrained” demand situation. These include supply-side metrics like expected plant utilizations, production capacity shortages, and critical component shortages or surpluses.
For their part, demand side metrics include expected unfulfilled customer demand and expected customer order backlogs. The dashboard functionality also allows S&OP participants to quickly conduct what-if analyses of potential changes to the supply and/or demand plans.
The second type of information that is needed during the S&OP process is how well the process itself is working. Thus, using the workbench, with scorecards and Key Performance Indicators (KPIs) that reflect how well the S&OP process has been working, foster learning and improvement to the process over time. Some of these KPIs include metrics such as demand forecast accuracy, variance to the baseline forecast, and adherence to both the supply and demand plans previously put in place.
To that end, the JDA S&OP Workbench offering can intelligently and efficiently align all necessary activities on a common business plan, enabling customers to:
The Executive S&OP Workbench is en essential tool for an integrated business planning (IBP) and management program. Generally speaking, an S&OP workbench needs to be integrated and synchronized with the underlying supply chain planning (SCP) components so that any changes made in plans during or between S&OP meetings can be reflected in the workbench’s supply-demand picture, as well.
Therefore, since JDA Executive S&OP Workbench is based on the scalable and extensible JDA Enterprise Architecture (JEA), JDA customers can leverage another solution that shares the same underlying foundation for master and operational data, security, exception management, workflow, and analysis & reporting for faster time to value and reduced maintenance. The JDA S&OP Workbench offering was launched in December 2008.
In addition to the abovementioned scenario analysis and best practice S&OP views and workflows capabilities, I was especially impressed with the following two features of the S&OP Workbench:
The version 7.5.2 was released in June 2009 and has added the configurable exception management, financial analysis templates, and Microsoft Excel integration capabilities. In between the APICS conference and today, JDA has released a new version (7.6) with the following major additional enhancements:
JDA currently has close to 300 S&OP customers. At the end of the last quarter, JDA had closed multiple contracts on the JDA Workbench. Customers are in multiple stages of deployment and JDA is planning on sharing referenceable customers when the implementations are complete.
More Differentiating Traits
To further differentiate its offering from the S&OP pack, JDA points out the following capabilities below:
The next release of JDA Executive S&OP Workbench, 7.6.1, slated for mid 2010, will feature Meeting Management, which will build off the existing functionality of Agendas to support each review meeting across each step of the process directly within the tool. The agenda building ability eliminates the need to send out bulleted agendas via email and consolidates the review planning in one place. Users can see the upcoming agenda for the review meeting as they are working within the tool and gain visibility into what is on the agenda and who is responsible for conducting each portion of the agenda.
As for the upcoming Meeting Management capability, a large majority of time involved in an S&OP process involves developing the Microsoft PowerPoint slide deck/presentation to distribute as part of the meeting. The new functionality will enable an automated PowerPoint builder to automatically include views from the S&OP Workbench into a structured PowerPoint presentation, thereby taking out a large amount of non-value add administrative work that must be accomplished each month.
Benefits Recap as a Parting Comment
At the end of the day, once the traditional hurdles of cultural resistance to change, integration challenges, and lack of optimization capabilities (mentioned in Part 1) have been overcome, S&OP should become a continuous process and not an annual or quarterly chore. A committed top management team is a prerequisite to institutionalizing a standard S&OP process across all business functions.
Stakeholders, business processes, and KPIs need to be clearly defined and managed and must be consistent with the overall corporate strategic objectives. A well-structured S&OP process can foster needed business alignment between the functional units and the various operational groups so that the whole organization works in unison.
S&OP is applicable to all business enterprises, and the benefits of expanding and institutionalizing S&OP across the enterprise can be notable. Nearly all companies - regardless of their industry, size, and competencies – should be able to benefit from a sound strategic S&OP program.
Measurable benefits typically include lower inventory and procurement expenses, reduced expediting and logistics costs, better forecast accuracy, and more effective production scheduling. From a qualitative standpoint, the benefits of implementing S&OP include increased supply chain visibility, improved customer service, and a better balance among demand, capacity and profitability across the enterprise. Taken together, these factors can add up to significant improvements in overall business performance.
Therefore, dear readers, what are your views, comments, opinions, etc. about the abovementioned vendors’ moves and about the S&OP software and services market in general? We would also be interested in your experiences with this software category (if you are an existing user) or with your current (possibly ineffective) practices, and your general interest to evaluate these solutions as prospective customers.