According to a recent study by Gartner, “Companies that use ONE solution across the full planning horizon reduce the risk of disconnect between S&OE and S&OP” and “Single (S&OP+S&OE) solution does support seamless planning across planning horizons.” The problem with current S&OP and S&OE processes is that they were designed around the spreadsheet technology of the 80’s. Today we have the capability to build in-memory models that are intelligent enough to understand the underlying and detailed model of the supply chain (i.e. the supply chain digital twin), and be able to recommend the right decisions in almost real-time. Separating the two processes and systems that are based on two models of the same environment can cause conflict, discrepancy and constant push and pull between planning and execution. In fact, many companies who have implemented S&OP alone, are now wondering how the plans can be executed and how to respond to disruptions in real-time without the use of manual and scenario planning. In other words, “we now have visibility, so what?”
Having a single environment for both planning and execution allows uninterrupted communication between long term plans and short-term execution of plans. Thus, new plans are generated knowing the actual status of operations, and disruptions in operations are automatically passed on to the planning and responses made to the new orders coming in. We refer to this as the shock-absorber architecture. That is shocks in the execution are absorbed by the system locally, as shocks become bumpier, the higher levels kick in to change direction or avoid foreseeable bumps on the road. Thus, the driver and wheels are in sync with each other not separated by time and decision latency.
For more information on how S&OP and S&OE can be deployed in a single and unified solution click Here.