Shifting consumer demand and lack of transparency between departments can make decision-making a challenge. Without the right tools or data, you’ll struggle to make informed choices that drive growth and you’re more likely to miss out on valuable sales opportunities. Invest in the right software and you can ensure that real-time information supports future decisions. In this post, we’ll cover why software holds the key to value based decision-making.
The modern supply chain
It’s more important than ever to make fast business decisions. The longer you delay, the more likely you’ll fall behind the curve and fail to take advantage of good market conditions. Demand can change by the minute so it's vital that the supply chain plan can sense these changes automatically and is flexible and able to adapt.
The decisions your business makes influences the resources you have. Make the wrong choices when planning and you could be left without inventory where you need it to be, coupled with too much stock where there is no demand. With hundreds or thousands of customers, multiple distribution centres and factories, knowing how much to produce and where to place the inventory is crucial. Get this wrong and you lose money. Get this wrong and you lose money.
Having a surplus of unwanted inventory is a situation you certainly want to avoid. It might have an expiry date or become obsolete due to shifting consumer wants. You’ll not only make a loss, but depending on your industry, this could also attract negative press and damage to your brand.
With S&OP in Anaplan, Tarmac delivers dynamic stock management, greater visibility into material flows and inventory, and more accurate sourcing decisions. Thanks to connections across S&OP and finance, the impacts of planning decisions are visible throughout the entire process. This is a business that operates 330 facilities and moves millions of tons of construction materials by road, sea and rail, to thousands of customer sites every year.
Value based decision-making is such a crucial policy to adopt because it gives you the factual data to say no to certain plans and situations. With the right tool you can link operational plans and scenarios to financial planning. This gives you the ability to see the impact of each decision, to the P&L and balance sheet, as well as a clear view of what resources you need to invest. If it’s not a valuable course of action, then you can make adjustments.
With market conditions in such flux, it’s not easy to serve customers reliably and make decisions that drive growth. Software is the secret weapon that your business can use to improve your value based decision-making process.
Software’s role in value-based decision-making
Utilising effective sales and operations planning (S&OP) software gives your decision-makers real-time visibility across the entire supply chain - suppliers, warehouses, factories, and distribution centres - so that they can act quickly and decisively.
Sam Fergus, Tarmac’s Senior Manager, Logistics Excellence said: “Anaplan allows us to support our customer network across the country to ensure that they continue to have the right product in the right place at the right time.”
Effective inventory management
Business cash flow is impacted if you have a surplus of stock for long periods of time. You might eventually have to write off this inventory so it’s vital that decisions regarding products are carried out with all of the relevant information. This can be provided by effective planning that all teams collaborate on.
The increased transparency between departments that Anaplan provides ensures you’ll always know the exact stock level forecasts, so inventory is never too low or too high. For example, the children's apparel business, Carter’s, saw four to six days of inventory removed from its supply chain, by using Anaplan.
Plus, the whole business has a better understanding of the lifecycle of a product and how it needs to be managed.
Real-time market data
S&OP software will ensure decisions about a product’s supply and demand are always accurate. Real-time data on product performance and seasonal trends gives you the flexibility to thrive when demand shifts.
With software like Anaplan, that enables greater collaboration, it's easier to pass information across the business, share accurate data quickly and benefit from decisions that are supported by up-to-date information. Incorrect figures don’t hinder plans and your business can thrive as a result.
S&OP software improves organisation and collaboration. It serves the entire S&OP process 'end to end' rather than struggling with multiple solutions for individual parts. Demand forecasting, inventory optimisation and factory capacity planning are all connected, so that management has accurate information at all points of the process.
Managers no longer have to worry about basing their decisions on unreliable data, pulled together by departments passing the information to each other after extracting it from systems, including Excel.
When Del Monte's supply was interrupted by El Nino, they struggled to prioritise the allocation of stock. Now they operate with a streamlined and integrated finance and supply chain. They use Anaplan to run real-time scenarios to see areas that may not be profitable and report this back to their sales, channel sales and logistics teams to adjust strategy.
Benefits for the customer too
What is sometimes forgotten is the improvements that customers see when businesses incorporate S&OP software into their procedures.
Suppliers, customers and clients will all benefit if your business is more efficient. Deadlines are met and products are always available when and where they’re needed. If your business is seeing improved performance, then that’s only going to improve customer satisfaction.
Utilising software of this kind can be part of a wider digital transformation for your business. Unifying processes and collaborating more across the demand and supply chain, removes inefficiencies and modernises your business.
What are your options?
Traditional S&OP tools are rigid and are often supported by spreadsheet models that are disconnected from the process. They’re limited in what they offer and they especially struggle when it comes to meeting consumer demands that have shifted suddenly. The market can shift in a matter of minutes.
The software you use needs to allow for adjustments as soon as they’re needed. Imagine if a celebrity is seen wearing your brand and demand for the item spikes within a few minutes? You need to be confident that plans can be adjusted to meet demand and the software can allow for fast and effective decision-making.
The consumer electronics business Sonos adopted Anaplan to remove spreadsheets from their planning processes. They can now execute a change in demand in just one day, compared to two weeks before.
There’s a range of S&OP tools available to your business, each offering extensive solutions to the challenges you face. Deciding between them isn’t always easy, so it’s important to know the exact criteria you’re looking for when making your choice.
For help and advice on choosing software and the full benefits of S&OP software as part of value based decision-making, make sure to download our free guide. It’s packed with useful tips, expert advice and our recommendation for the right software tool to choose.
Get your copy now using the link below.