Skip to main content
#Supply Chain #ERP #Process Optimisation

What matters when you implement planning systems?

Monday 08/06/2020
implement planning systems

Supply chain planning systems have made huge strides in recent years. ERP used to be the ultimate magic three-letter-solution the past two decades, but now companies are turning to new ways to improve their supply chain planning processes. Why?

  • Why should you focus on process over software?
  • What are the best practices to take into account?

ERP is traditionally strong in MRP and transactional execution, but has no features to address advanced planning and S&O. As a consequence, many supply chain professionals felt their requirements were not really covered by ERP. This created a window of opportunity for APS and Supply Chain Planning Systems in general that are filling these gaps. But what are some best practices to take into account when implementing such systems?

APICS helps you to define your goals

Software is not the first thing you have to think of. Define clearly what you want that software to do: what benefits do you expect in the planning system? Which business and supply chain problems do you want to address? In order to be aligned throughout your company, you have to get the terminology right: S&OP, Detailed Scheduling, MPS, Capacity Planning, Inventory Management… all may have different meanings to different people. APICS comes to the rescue, because there’s a global consensus on its terminology. Using it to clearly describe the expected benefits from the planning systems is the right thing to do. (And while you’re at it, document your future state processes using the APICS planning framework to inspire you.)

Defining your Future supply chain planning capability

With the future state processes clearly defined, the next thing to do is to translate them into more detailedbusiness requirements. If, for instance, you want to develop a feasible, capacity-constrained production plan, you need to be sure to describe the kind of constraints you want the planning solution to address. It may be machine capacity. Or the capacity of your workforce. Or both. Or maybe you want to see Capacity Utilization Charts?

Select the right software

Prepare the selection of the right software carefully and meticulously, using the supply chain requirements developed in the previous step. On your to-do-list: scan the marketplace. Invite software vendors (PS Gartner can help you). Provide the requirements to the software vendors of your choice and ask them to prepare a demo in which they demonstrate their capability to meet each desired feature. (Please note: communication with external software vendors will go a lot smoother if APICS terminology is used. As a consequence, the vendor’s demos should be of better quality, allowing you to ensure that you do pick the system that meets the required functions). Prepare detailed scoring sheets and invite all key stakeholders to take part in this process.

Get the data right

Be ready for a data mission. Supply Chain Planning systems usually require data which is either not existing in any other system (such as ERP) or the data quality is just not good (such as in ERP). To get the most out of a planning system, it will need accurate data on production lead times, factory calendars, Bills-Of-Material and Planning BOMs, Routings, Costing information, Workforce information… Data governance is an important part of any planning system project. Without good data, no good planning. Period.

Delivering the solution

Once you have selected the software and the implementation is about to start, you have to continue to keep close contact with your stakeholders. Don’t expect planners to adopt the new system if you don’t involve them throughout the whole journey. If you want to go for automated planning algorithms and planning solving techniques, be aware that you need to thoroughly define and test these features. Include the people who will work with the system. They know their business inside out, so assign them an important role on the project. Create a feeling of ownership. Every hour spent with the planners during the implementation stage, will save at least two hours after go-live.

Look back regularly to the business case you developed before the project started. Keep your focus on the key benefitsyou pursue to ensure the planning system covers the core business expectations.

Avoid disruption and create trust

Planning systems have become more integrated with ERP. Supply plans you make in the planning software, are usually interfaced to the ERP system where they are converted into Production Orders, Stock Transfer Orders or Purchase Orders. This linkage is crucial to day-to-day business and operations. Be sure that before you roll out your new system, you develop a risk mitigation approach and fall back scenarios. There are some ways to address this challenge. You could do simulations, for instance, a kind of business stress test, before going live. Or you could decide to run a number of parallel planning cycles – which assures you of keeping the stability of the legacy systems – until you are 100% sure that the new planning system works. This is the best way by far to build credibility and trust in the new system. Without trust, spreadsheet will never be far away.

Contact one of our experts
Joël Wijns
Joël Wijns
Partner Business Consulting