“There’s S&OP… and then there’s the real world.” — Gartner Research
Gartner points out a critical truth that all supply chain organizations have to face. While organizations spend 30% of their time doing sales & operations planning in the “liquid zone”, they spend 70% of their time with actual sales & operations execution (S&OE) in the “frozen zone”. These two phases are separated by what’s commonly called a planning time fence, which is effectively the moment you switch from planning to execution. Outside the fence, you have time to change purchase orders and production plans. Within the fence, you switch over to dealing with real-world complications and near-term obstacles that inevitably threaten your well-laid plans.
Despite all of your careful planning, modeling, and forecasting, what all that planning hasn’t done is tell you what to do about an impending shortage, unexpected order, shipping delay, or any number of other potential hiccups that occur within the planning time fence. Without standard operating procedures for exception management in place, most supply chain teams resort to emails, spreadsheets, and phone calls to fight the good fight. Planning tools aren’t designed to handle this challenge. Organizations need to consider how a platform designed to support S&OE can provide greater insight and control over your supply chain within the planning time fence — effectively unfreezing your frozen zone.
Within the frozen zone, an S&OE platform’s automation tools can help provide visibility into potential shortages and function as an early warning system to alert the right people immediately.
Automation can dramatically reduce the time to discovery of an issue; this allows for preventive measures to be taken before it becomes a full-on catastrophe. By responding sooner, the impact on the rest of the supply chain is lessened and the risk to the customer is reduced dramatically.
Another important capability of an S&OE platform is centralizing communications and providing a record of decisions from all involved people in different parts in the supply chain. Most organizations today use whatever means of communication is available (phone, email, pager, carrier pigeon), which isolates important details and makes it difficult for everyone to get a clear picture of the entire situation. By centralizing all communications and keeping a log of the discussions, concerns, and decisions made, teams can significantly speed time-to-resolution by eliminating the need to repeat prior research and decisions every time a similar problem occurs or new member is added to the team.
An S&OE platform can then help ensure that the decisions and action plans to address issues are carried out as expected. The same system that managed to identify potential shortages should also be able to coordinate between all of the groups that have a role in mitigating the identified problem. Instead of wishing and hoping the messages get through and the actions get completed, you can ensure each person responsible for every step of the plan is made aware and no one has dropped the ball.
Just as your planning skills continued to develop and improve over time, an S&OE platform should also allow your operations to improve over time as well. With the past data available to you, the analytics you can create can help you conduct post-mortems to give you insights into what went well, what could have been improved, and what you could try next time a similar incident occurs.
To find out more about how an S&OE platform can help you unfreeze your frozen zone, register to access an on-demand recording of the “Unlock Your Frozen Zone: Managing Product Shortages in the Digital Age” webinar. You’ll hear more concrete examples of other companies that have successfully utilized this type of platform and how they reduced risk, saved money, and kept their customers happy.