A Unified Platform for S&OP and S&OE Results in More Resilience and Agility
Real-time response planning is a function of S&OE. Given the level of disruptions in the supply chain, S&OE is your best friend to improve the resilience of your supply chain. S&OE can also optimize operations cost and improve service levels. Having instant visibility as to how your decision in operations can impact your financials is only available to you with the right S&OE solution. A good example of the latter is the use of more expensive substitute part# when the lower cost one is out or arrives late.
Gartner defines functions of S&OE as:
- Use S&OE process to manage executing priorities, balance short term plans and manage out-of-plan exceptions.
- Leverage the S&OE process to translate the results of the S&OP process into executable details
We separate the two processes and systems for S&OP and S&OE, and then keep talking about merging and bridging the gap? It does not make sense when we can do both simultaneously in a unified environment. Thus, planning and execution come together and every decision, whether it is at a high level or low level, would immediately known to the whole and how it can impact long range and short-term results in delivery and cost. Yes, we cannot forecast in detail 18 months from now but we can do both shorter and longer term forecasting in a unified environment. We can also perform detailed planning and long-range planning in the same environment without having to switch back and forth and try to pass information up and down. Sales and operations are two different processes that we use S&OP to unify in the same environment. Why not have planning and execution also in the same platform and unified?
Would you need two disjointed systems for S&OP and S&OE if your “S&OP solution” could perform both functions?
The traditional approach has been, in cases such as vendor late delivery, equipment breakdown, snow storm or a strike, people should look to S&OE for answers. Yes, this is the case. However, any decisions made at the level of S&OE can have major impact to the S&OP process and can influence future deliveries, cost, product mix, and of course financials.
By combining the two systems in one, you are improving both predictability and responsiveness resulting in an organization with high level of resilience and agility.