Technology provides capabilities to optimize the operational planning processes of a company. Traditional Supply Chain (SC) software has been widely adopted for a long time, however companies’ No. 1 supply chain priority is to go a step forward on improving its planning capabilities
Given growing SC Complexity and Volatility, it is becoming nearly impossible to revise a complete supply chain without using the latest technology.
Key Functional Capabilities
Let’s imagine that you have a bunch of softwares in scope but it seems impossible to start your comparison.
First of all, focus on how the tools solve complex challenges. Have a look to the following list of key functional capabilities:
- Collaboration. External collaboration both with customers and vendors is becoming more common.
- Performance Monitoring and Analytics. Includes performance management, business intelligence, alerting, and advanced analytics.
- Optimization. Based on a discrete snapshot of reality. Most often applied to inventory and supply planning problems.
- Simulation / Scenario Planning. Used to support long-term S&OP or IBP, risk management, SC design, and tactical demand and supply problems.
- Scheduling. Resource allocation and operational planning.
- Response Management. How quick it reacts to volatility in demand, supply, and product to improve delivery service and operation efficiency.
Choosing a SC Software Vendor
As a good rule, I will recommend you to look for a Suite provider, this means that your vendor must have multifunction product software and your future tool will cover at least four of the functional areas within Supply Chain Planning:
- Sales & Operations Planning (S&OP)
- Supply & Replenishment Planning
- Demand Planning and Forecasting (DP)
- Vendor Managed Inventory (VMI)
- Inventory Planning
- Available to Promise (ATP)
- Production Planning and Scheduling
- Distribution Network Planning
Software Evaluation Criteria
In particular for software evaluation you will based your decision-making on the following criteria: Functionality, Technology Alignment, Viability, and Services.
What is more, Total Cost of Ownership (TCO) should be also consider as an important criteria which is separately dealt with using cost benefit analysis.
Responsive planning, Optimization, SC design features, S&OP process maturity, Scheduling , Scenario planning / simulation, Advanced analytics, Scalability and speed, Functional roadmap and User interface.
Don’t infuence your decision in marketing and promises, go to the facts. Make your own analysis and visit the professionals on those companies that are using the current solution (see the vendor credentials) and ask them for their feedback, this is going to give you a real approach.
Exception and constraints handling, Integration with ERP, other SCP and legacy systems and Compatibility with custom/legacy systems.
Probably the most critical criteria for your IT department because in the future they will have to create interfaces and adapt all the internal reports and documents that your company is using in order to visualize them in the new tool.
Financial health, Strategic alliances, Availability of support by geography, Total footprint and solution maturity, Market adoption, Vendor direction and Industry specific focus … Not everyone take into account this point but is a very important one.
Nowadays technology companies are involved in many M&A so don’t be surprised that the tool you bought 5 years ago is no longer available and your vendor is not giving you any support because the new company which adquires the rights is not interested at all into maintain it …
Total Cost of Ownership (TCO)
Total Cost of Ownership considering yearly feeds for all users and Maintenance (very important for future software updates) and support cost.
Finally remember that the real cost of a tool is not going to be only the ammount of zeros that you will pay, always keep in mind future developments and how much are they going to cost you …