S&OP Success: 5 Ways a Collaborative Platform HelpsWhite Papers
Let’s talk about responding to risk. For instance, what if a competitor launches a new product earlier than expected? And worse yet, that product is receiving great reviews. How fast does your planning and decision making process learn about the threat and respond with the right decisions and actions? How quickly can your company develop a game plan to counter?
Or what if a channel customer rolls your product to more stores than planned? How quickly can your company respond to this opportunity?
A congested S&OP process means your company cannot react quickly or smartly to sudden risks or new opportunities. Here are five ways a collaborative platform like mPower can streamline your company’s S&OP process.
1. Clean Data
Data issues are a big problem in S&OP. In fact, 60% of companies we talk to complain that lack of clean data is a key hindrance to S&OP. This is especially true for companies that have grown through acquisition and must therefore consolidate data across disparate systems. For companies that are operating in the outsourced world of manufacturing, the “S&OP system” is really a multitude of systems used by manufacturers all over the world.Herein lies the challenge of generating clean data. With data streaming in from various sources and in various forms, how do you create data that is actually useful?
This is where o9’s decision management platform, mPower, can help. Through a variety of technologies and data services, mPower enables the creation of clean data, consisting of master data, plan data, and transaction data. Access to usable data forms a good foundation for the S&OP process.
We’ve noticed that in many companies across industries, roughly 80% of planners and managers’ time is consumed with collecting data, validating data, collating data, and creating management reports. These tasks are not “value add”—that is, they do not directly enhance decision-making, but they are undoubtedly necessary for the maintenance and growth of a company.
Here’s the good news: these non-value-added tasks can be easily automated if you have the right tools.
The mPower platform contains multiple features—such as smart alerts, natural language processing tools, and automated reporting—that streamline these daily, time-consuming tasks. Once information is input into the system, mPower uses natural language processing techniques to automatically tag it and then propagates that information up the chain to the right people. These smart alerts and automated reporting tools ensure that everyone in your organization can stay up-to-date on the information they need.
Moreover, with mPower automating non-value-added tasks, planners and managers can spend more time on value-added, decision-making activities.
When teams are working in disparate systems or in static platforms like Excel or PowerPoint, the result is an organization-wide lack of transparency.
Because one team cannot access or operate the system of another, they do not have full visibility into the latter team’s data, their process for compiling that data, or (perhaps most importantly) their assumptions underlying that data. For example, if the assumptions behind the sales teams’ numbers are not fully visible to the supply chain teams, then supply chain tends to second guess those numbers.
Even if all teams are working in Excel and PowerPoint, they do not receive real-time updates when a spreadsheet or presentation is altered and are thus regularly operating from outdated information. This hurts management’s ability to make informed decisions.
In short, without cross functional visibility, management has no choice but to make decisions based on siloed information, unclear processes, and hidden assumptions. This means missed opportunities, miscommunication, and mismanagement of resources.
mPower enables cross functional visibility by storing and updating information in a single, dynamic platform. Your company can customize visibility settings so that teams have access to the information—and assumptions—they need to make informed decisions.
Visibility is not enough, however; now that you have full access to all necessary information, how do you leverage it? The next phase is generating insight and intelligence from the visible information and assumptions.
mPower provides that insight by using intelligent analytics and scenario planning tools. These capabilities allow you to accomplish three important goals when evaluating the impact of financial decisions:
a) Prioritize risks and opportunities
A company, no matter its size, rarely ever has only one risk or opportunity to address at one time. Cross functional visibility allows you to see all of those risks and opportunities, and mPower’s intelligent analytics enable you to evaluate, prioritize, and even reprioritize the risks and opportunities as they occur.
b) Conduct what-if scenario planning
Scenario planning allows you to evaluate the impact of decisions before they are made. Because mPower can store the factors driving risks and opportunities, the platform allows you to conduct what-if simulations on the financial impact of different decisions. If you can simulate the impact before you make the decision, then you have more control in achieving an optimal outcome.
c) Compare products and their ROI
Most S&OP processes are very unit-centric, focusing on the comparative costs of products and the number of outputs. But not all products are equal, and a unit-centric approach does not provide an accurate assessment of ROI. This is a common theme we hear from potential customers. Using mPower’s analytical tools and scenario planning features, you can evaluate which products have greater revenue potential so that you can allocate resources accordingly.
With these three capabilities from mPower, your S&OP process can achieve what most companies miss out on—insight into the financial impact of their decisions.
One of the major challenges companies face is evaluating the final results based on the original plans. Accountability for poor performance is often difficult for companies to maintain because the various forecasts and assumptions are in different people’s heads, inboxes, spreadsheets, and hallway conversations.
If forecasts and assumptions are either stuck in inaccessible systems or shared in informal settings, how do you accurately recall the plans and decisions made 6 months back? Because the responsibilities and details of the plan were never recorded, meetings dissolve into a “blame game” when the final results fall far short of expectations.
mPower captures not only the original plans but also the forecasts over time and all of the associated assumptions. This enables the company to create a post-game analysis of performance so that teams can answer the questions that should always follow the completion of an initiative: What was the plan? What were our assumptions? What went wrong, and what went right?
By helping a company answer these questions through a post-game analysis, mPower increases accountability and drives continuous improvement across the organization.
Altogether, these five benefits from mPower—clean data, automation, visibility, insight, and accountability—can streamline your S&OP process so that your company can respond faster and smarter to risks and opportunities.
To see how mPower could transform your enterprise, talk to one of our experts here.