Toolbox vs Out-of-the box
During the last years, we have seen collaborative planning & decision-making software platforms, often presenting themselves as ‘agile’ toolboxes. These new software technologies provide now a challenging alternative to traditional software supply chain planning packages. But how to choose the right Supply Chain Planning software?
As part of their digital transformation, organizations are looking for a new software to support and improve their planning process. They are now facing 2 kind of solutions. Either an open/ fully customizable ‘toolbox’ or a preconfigured ‘Out_of_the_Box’ solution.
Hereafter, we have tried to list some elements to take into consideration before making such a strategic choice for a company.
How to choose your Supply Chain Planning software?
Niche and short-term requirements vs Global and digital transformation journey
The nature and aim of the project itself can lead to a different approach.
Sometimes organizations clearly identified the business need for a particular business topic (e.g.: inventory replenishment planning). It has been identified for one or few users and centrally based or within one single department; in this case, most likely, proven, and robust packaged solutions should bring a maximum value with a minimum risk. Trying to redevelop similar functionalities within a toolbox, could be somehow like ‘reinvent the wheel’.
In other situations, the business need impacts significantly the company strategy and interacts with other departments within the organization (e.g.: Sales and Operations Planning, or even better: Integrated Business Planning), while it is also quite often part of a global digital transformation journey, and as a consequence might involve many users; in this case a collaborative decision-making platform seems be more appropriate. Why?
- This kind of tool is generally capable to support a holistic approach, by managing planning and performance with different indicators and workflows for different departments. But only within one single database, and therefore sharing the same company objectives
- by enabling scalability in implementing new processes, in order to give time to users to adopt them. Users will then be fully ‘on board’
- by adapting the front-end user interface to each individual user, and not the other way around. A packaged solution (alone), is not the solution. Disconnected from other departments and not aligned with company strategy, it would not prevent from working in a silo.
Strategic or Tactical Planning vs Operational and short-term Planning
Depending on when you are on the planning horizon, the needs are different.
In the long term for Strategic Planning you may require some specialized tools for occasional usage ( e.g. logistic network design). But you would rather use a collaborative planning toolbox , in particular for global organizations. The solution will then allows manual simulations process combined with many data gathered from various sources across departments (sales, supply chain, finance, HR,..); this is particularly true if you want to expand your S&OP to full IBP.
In mid-term, let’s say 18 to 24 months horizon for S&OP planning, it is basically a process that should remain at a high level, and manual. A toolbox providing a lot of simulation capabilities, ideally strengthened with strong business Intelligence features embedded, would better help than a sophisticated planning algorithm from a packaged software.
What matters is to consider the right tool at the right planning level.
However, when it’s time to translate the high-level S&OP into a detailed plan in order to supply and manufacture the items, and/or when horizon becomes shorter, then the need for process automatization ( e.g. constrained capacity planning optimization) , become much more crucial; this is definitely the domain of packaged planning tools (APS). These tools bring proven, state-of-the-art planning & optimization methodology (like MRP or even more recently DDMRP), available for any industrial organization.
So somehow the distinction between long/mid-term and short-term planning is basically manual Planning vs Automatic Optimization. It indicates where toolbox or packaged solution is respectively more relevant. What matters is to consider the right tool at the right planning level.
Best practices adoption to support growth vs Tailored solution for a mature organization
Last but not least, the organization’s level of maturity could be also an important driver to consider before choosing a planning software.
In a fast growing company, where no existing process is in place yet, choose preferably a simple packaged solution. It will help for adoption of industry ‘best practices’ in planning (e.g: statistical forecasting) right from the beginning.
On the contrary, a more mature organization will beneficiate from its own experience. It will have the ability to build and customize a powerful and advanced planning application, based on an agile toolbox.
However, such a toolbox involves some requirements from the organization. The target planning process implemented with the tool has to be clearly understood and shared by all the stakeholders.
Indeed, implementation for such toolbox usually starts from a ‘blank page’. The risk of not achieving expected results when specifications are not clearly defined is obviously high.
Sometimes, it could be also wise to remain for a while with… Excel™, and test with spreadsheets the planning process before moving forward to a new software implementation.
Takeaways to choose your Supply Chain Planning software
In order to recap what has been described above; if a company is looking for a solution:
- as part of a wider global digital transformation journey/roadmap
- for high-level process, manual but simulation & BI intensive
- to support a mature process and an organization ready.
A collaborative planning platform/toolbox could help.
While If a company instead is looking for a solution:
- for a critical but niche requirement,
- for detailed planning, providing state-of-the-art optimization algorithms
- that will bring industry best practices
A packaged planning software solution could help.
One size does not fit all… It sounds that in many cases organizations requirements are a mix of these 2 categories. How to choose then?
Think outside the box.. have both !
Well, the good news is that all software vendors have made significant progress in terms of integration and communication with external systems.
Furthermore, some software & consulting companies specialized themselves in combining solutions. They all aim of using different software technology where it is best at.
So why choosing between ‘Toolbox’ and ‘Out_Of_The_Box’?
Think outside the box.. have both ! What do you think ?