- Then Why Spend Money on S&OP Alone?
When you acquire S&OP solution by itself, you are getting only half the solution that is needed to plan and execute the plan. That is why so much manual and sub-optimal planning is done with today’s S&OP solutions. S&OP works at a high level of planning performing rough and long term monthly or yearly planning. Translating that to weekly, daily and even minute by minute execution requires much more sophisticated solutions, namely S&OE.
S&OP models the supply chain using monthly buckets, fixed lead-times and pre-defined bottlenecks. As your product mix changes, all of these factors become highly inaccurate representation of your supply chain environment.
S&OE, on the other hand, produces plans which are accurate and fully executable without any manual intervention, hence digitalization. S&OE requires the ability of the system to accurately model the supply chain (not just bucketed capacities and fixed lead-times). It also offers relevant data and prescriptive algorithms to produce smart plans which are optimal.
Another very critical issue is that many of today’s vendors and supply chain leaders, create a rift between strategic planning, tactical planning and operational planning. In other words, they recommend use of different “systems” and processes for S&OP, S&OE and so-called operational planning! This is a very old school approach to planning and further divides the operations from sales and marketing. S&OP and S&OE need to be working hand-in-hand as a unified data model. In other words, as higher levels plans are created, the system automatically executes them by adding the relevant constraints to create realistic and optimal plans for execution. This approach is analogous to a self-driving autonomous vehicle, where GPS is constantly evaluating the expected route ahead while the shock absorbers are taking the bumps on the road to make the ride as smooth as possible. At Adexa, we call this the Digital Blueprint, such that by adding more data, the system automatically creates plans to the desired level of detail in a unified data model. So next time, you are looking at S&OP solutions, remember you are getting only half the solution and the other half, if you desire to get later on, may not match the first one! For more detail on the use of S&OP and S&OE click HERE.