Competing in an environment of constant change is always a challenge. But when businesses have no idea what will happen next, or when, the sheer scale and risk of operational upheaval escalates – leaving little to no room for error and delay. 

Uncertainty may be natural, yet it’s no reason to do nothing until something happens. Dramatic shifts are happening too quickly to reserve strategic planning as a traditionally annual exercise. From minor modifications to profound events, businesses must continuously anticipate risks, disruptions, and opportunities and evaluate how every function, role, interaction, and action can mitigate them, turn them into opportunities for growth and ultimately help to build the resilient enterprise

Fortunately, businesses are beginning to get the message as they consider the advantages of what-if scenario planning to foresee the possibilities ahead and get comfortable with a level of unpredictability that paralyzes actionable decision-making. 

The True Meaning of What-If Scenario Planning 

What-if scenario planning recognizes three realities of running sales and operations planning (S&OP): market conditions have already changed, will continue to change, and must always change. By asking “what if” with a disciplined framework of data-driven trending, analysis, and simulation, decision-makers can evaluate strategic and operational alternatives that can challenge the status quo and offer better ways to get business done. 

 But predicting change is just the beginning. The actual value of what-if scenario planning is the ability to prepare for short-, mid-, and long-term shifts, such as: 

  1. Could entering an adjacent market bring losses that outweigh potential gains? 
  1. What should the company do if emerging challenges require unprecedented operational changes?  
  1. Will changing social awareness, expectations, and values call for new business models, product redesign, or more personalized services?  

Technologies that automate and accelerate the entire exercise help ensure forecasting and decision-making are flexible, nuanced, and responsive enough to allow the company to move forward rapidly. More importantly, they open the door to a continuous cycle of integrated business planning (IBP). 

A Prime Entry Point for Intelligent, Integrated Business Planning 

Digitalizing what-if scenario planning empowers businesses to leverage predictive insights to act strategically, confidently, and courageously. Such an edge can foster a shift in strategy, embolden forward-thinking innovation, or even fulfill unmet customer needs. 

When built on a mature, cost-based optimization engine matched with a digital representation of the supply chain , integrated business planning operationalizes what-if intelligence to find the best balance between supply and demand, as well as risk and opportunity. For example, sales organizations can take into account product shelf life and opportunities to sell inventory before the expiration date. Simultaneously, supply chains identify alternative forms of raw materials to define bills of materials that fulfill business requirements better with less risk. Even supply can be pegged geographically to strategically respond to demand across sales channels and within the distribution network. 

Technology-enabled what-if scenario planning can provide on-demand forecasts so organizations can optimize their strategies daily, weekly, or monthly. Demand can be prioritized flexibly and aligned with strategic corporate objectives. Supply chain resilience can be evaluated efficiently through real-time simulations and increased visibility throughout the extended enterprise, including external suppliers and distributors. Financial performance can also be assessed and compared against predefined budgets from multiple perspectives at the same time. 

From Chosen Scenarios to Live Competitive Advantages 

Recent experience with the dynamics and turbulence of uncertainty should compel businesses to rethink how S&OP strategies are created and modified. By tapping into the possibilities of every conceivable scenario, functional and executive decision-makers can discover more resilient, long-term capabilities and bring them to life to better withstand future external shocks.  

This is the beauty of what-if scenario planning, whether in times of crisis or calm. With a fresh look at how they operate and respond to change proactively, companies can emerge from any challenge with greater agility, stability, and ingenuity. 

Check out this great blog post on what makes IBP a proven, powerful planning process. 

Execution of S&OP through a sales and operations execution process is what sets top brands apart. 

Business planning is, of course, essential, but the real proof is in the execution. While sales and operations planning (S&OP) is critical to the creation of an overall business strategy to maintain a competitive edge, sales and operations execution (S&OE), along with a process to support it, should also be a top priority for your organization. 

S&OP Defined 

S&OP integrates plans for every department, combining the needs and opportunities facing customer support, sales, marketing, development, manufacturing, sourcing, and financial into one tactical strategy. Its intended purpose is to provide the information management needs to direct the business as well as create and sustain a competitive advantage.  

The goal of S&OP is to create an overall strategy that helps resource allocation and management meet customer needs while controlling costs. It operates at a high level to optimize supply and demand issues, product life cycles, and new product introductions, assigning a monetary value to each activity so they can be counted in the revenue goals.  

With S&OP, time horizons are relatively short – usually three months to a few years – and meetings are usually held no more than once a month.  

S&OE Bridges the Gap 

There’s an obvious day-to-day operational gap left by S&OP; you still need a way to deal with short-term issues for things like production, shipping, and equipment. The S&OE team has the primary goal of S&OP execution and solving problems to keep sales, supply, and production on target. This usually requires frequent as-needed meetings along with scheduled weekly gatherings. 

Sales and operations execution acts on any issues that affect supply and demand issues immediately, or that are foreseen in the next few months, forming the link between strategic and tactical activities defined in the S&OP process. With an effective S&OE process, your operation runs more smoothly and costs are better optimized because problems are quickly identified and solved.  

The Benefits of Integrating S&OP with S&OE 

Predictability is important. The implementation of an S&OP/S&OE process sets companies apart and offers tangible benefits. Best-in-class organizations report consistent, repeatable superior performance after implementing complementary S&OP/S&OE processes. 

Because S&OE supports the S&OP process by creating and disseminating an immediate plan that supports the overall strategy, the two processes together ensure clear and streamlined orders and a logical, achievable workflow. This keeps operational costs optimized. 

Additional benefits include: 

  • Improve forecast accuracy: Inaccuracies in a demand plan will cascade through the supply chain and increase costs, which makes it crucial to driving your plan using a valid market-driven forecast 
  • Inventory optimization: Implementing S&OE can reduce inventory and safety stock levels up to 45% 
  • Improve on-time delivery: S&OE can drive customer and brand loyalty by improving on-time delivery by 10% to 50% 
  • Align planning, budgets, and financial goals: Set departmental goals that will add up to your top-level goals across all departments, divisions, and locations 
  • Increase working capital: More working capital allows for more efficient inventory, payables, receivables, and cash conversion needed to run the organization 

Aligning S&OE with S&OP improves collaboration between departments and increases the involvement of middle management when making decisions. Companies can also build consensus between stakeholders on any changes to near-term plans and forecasts. This offers instant insight into the impact on revenue, manufacturing capacity, and inventory levels. 

Designing an S&OE Process 

The goal of a sales and operations execution process design is to create an end-to-end workflow that’s connected to the S&OP process. This means defining S&OE requirements, inputs and outputs, and data hierarchies. It’s also important to define the scope of S&OE – whether it begins immediately or with a specific use case. 

After defining requirements, the next step is to design the process. 

An effective S&OE process requires at least weekly meetings to review issues and decide on and perform the tasks to execute the tactical plan. This means including the right people, offering visibility where it’s needed, and using the right supply chain management solutions for both decision-making and data processing.  

It’s also important to identify deviations that trigger the S&OE process and require immediate action. This means having the flexibility to call an unscheduled meeting to deal with these issues without delay. It also means including individuals in the process who can make informed decisions. These could be people in strictly tactical roles or executives in planning and operational management.  

Essentially, S&OE requires data hierarchy granularity that isn’t necessary with S&OP. Mapping the S&OP plan to transactional data provides the visibility needed to understand if goals are being met and how deviations truly impact them.  

Use the Right Supply Chain Solution 

To effectively merge and implement S&OE with S&OP, you need a supply chain software solution to track forecast and inventory performance over time and allow you to visualize true rough-cut capacity and long-term capacity planning data.  

The right supply chain platform will greatly improve the success of your integrated S&OP and S&OE processes by explicitly showing what needs immediate focus to keep your supply chain running at peak performance.  
At Logility, we are committed to enabling our customers to operate the resilient and sustainable supply chain that will make them leaders in their industry year after year. 
Hear how Logility customer Red Wing Shoes leverages Logility solutions to meet its ever-changing business needs and rapidly expanding product portfolio. 

A frequent conversation on forecasting best practices among demand planners is the growing concern over the use of “one number.”  From sourcing and production to logistics to marketing, most companies have long relied on a single foundational key performance indicator (KPI) to dictate how they fulfill their customer needs. But is using one-number forecasts too suspect given today’s growing availability, visibility, and use of big data, advanced analytics, and intelligent algorithms?

When it comes to getting ahead of changes in customer behavior, economic conditions, and market dynamics, there is never just one number that gives every business function the same point of view. The intent of this traditional approach may be uniformity of thought and collaborative action. But it fails to incorporate the natural distinctions across a spectrum of scenarios that warrant different decisions at different times, across different functions, across different product families and across different distribution channels to drive profitable growth strategies and margins.

The Complexity and Limitation of That One Number

A single number can mean different things to different functions within the organization. The finance team, for example, may have a revenue outlook that indicates increasing profitability, while a sales team watching its pipeline activity build up could perceive the same figure as either limiting or promising.  

In essence, using one number to measure future demand loses the value of dimensionality in the data and the business process, arbitrarily forcing an organization to reach a consensus that ignores other realities. This one shortcoming is perhaps one of the most obvious for this forecasting metric.  

By discounting the impact of uncertainty, businesses base their decisions on incomplete and imperfectly reliable data. The evolving best practice is to educate and empower the organization to reconcile KPIs with the realization that one-number forecasts will never be enough information to make consequential decisions.  

Pragmatism Outperforms Fuzziness 

Consumer-oriented businesses are characterized by various demand patterns influenced by economics, promotions, market segment, and the convenience of e-commerce and direct-to-consumer channels.   

When developing a forecast for consumer industries, the underlying logic (math) needs to be multivariate and adjust over time in an autonomous manner.  

Take, for example, food and beverage brands known for introducing, proliferating, and rationalizing SKU varietals. There’s a short window of opportunity between the accurate forecasting and actual consumption of a unique SKU. However, while racing to get as close as possible to the consumer, these companies still need a firm handle at a product-family level to plan their assets and network 12 to 36 months ahead and beyond.  

For commodities, prescriptive capabilities – such as sensing applications, hybrid algorithms, and cause-and-effect analytics – are critical to respond to demand strategically and improve the outcome of promotions. At Logility, we have seen customers use this tactic to reduce missed sales by 50% while decreasing safety stock and overall inventory holdings in their warehouses.  

In comparison, enterprises with mature products purchased weekly or monthly could benefit from statistical forecasts that are auto-tuned to benchmark operational performance. This enhancement increases visibility into trends and consumer behavior to the point where demand variances become more insightful and predictions are more accurate and trusted.  

In either case, using one number is no more a complete predictor of demand. The consequences of inaccurate demand forecasting are just too risky to make decisions based on any degree of fuzziness. 

 The Connection Between Demand Variance and Real-Time Dynamics 

Every product category is impacted by one or more causal variables. As those factors strengthen and weaken over time, depending on the forecasting cycle and the forecasting horizon, businesses can identify trends that can help improve demand forecasting

Across the consumer products industry, different variables impact certain segments in various ways. In the Food and Beverage (F&B) industry, food purchasing is often affected by seasonal buying habits, price and promotion sensitivities, and distribution performance in ensuring a quality product reaches supermarket shelves. In the Retail, Footwear and Apparel (RFA) sector, regional preferences, economic growth and contraction, social fashion sentiment, competitors’ marketing spend, and new product introductions could influence demand for specialty fabrics used to produce high-performance and weather-resistant sportswear.  

Nevertheless, avoiding this one-number forecasts fallacy requires companies to leverage KPIs that better capture their specific risks and opportunities while understanding sensitivities within the business that can change those metrics. The key is knowing how to improve business results with systematic advancement in predictive demand management. 

The lesson learned about one-number forecasts is clear: the broad spectrum of demand conditions requires a unique approach to demand management. This goal can be achieved by focusing on multivariate KPIs, leveraging a range of enterprise-wide data, and collaborating on how to best leverage the data to improve decision-making. Meanwhile, businesses should also automate data processes, improve the monitoring and reporting of business results, and establish a connection between predictive accuracy and bottom-line outcomes.   

While the means to achieve an accurate demand plan varies, this outside-in approach is pragmatic enough to empower organizations with more reliable processes and trusted decision-making to move the business forward – together. 

 Strategic Thinking Goes Beyond a Figure 

If there was ever a time to rethink how businesses forecast demand and respond based on that insight, it would be now. Current economic circumstances and respondent consumer behavior have increased uncertainty and have challenged the status quo, increasing the risk of lower revenue and lost market share. And frankly, one number could never capture it all – especially as quickly as things change nowadays. 

Fortunately, data availability and analytics capabilities can help create forecasting models that business functions need to make decisions with greater confidence, while considering every dimension that impacts demand. And when businesses invest in these tools, they are well-positioned to climb the leaderboard, possibly surpassing comparable competitors along the way. 

Learn more about improving the quality and precision of your forecasts here.

Know your vendors and apply consistent policies and procedures. 

Compliance is an ongoing challenge for businesses today. True corporate responsibility involves more than just your products and internal operations; it’s incumbent upon you to ensure compliance across the supply chain. Lack of supplier insight can result in your organization violating government regulations; working with providers who don’t share your company values; or getting caught up in trade embargoes, sanctions, and labor and social justice issues. 

As global supply chains and procurement scrutiny become more and more complex, risks increase and the range of stakeholders who demand a compliant supply chain has increased from simply regulators to investors, providers, partners, consumers, and the media. This means having a resilient supply chain strategy that includes visibility, transparency, clear communication, and collaboration.   

The Costs of Non-Compliance

It’s all about mitigating risk.  While the cost of compliance increases, non-compliance impacts finances as well as company reputation and ultimately your bottom line. 

Risks are dynamic, affected by everything from climate change to human trafficking to politics. For example, governments may enact new laws that affect worker rights. Supply chain disruptions such as these may force a business to find new inshore or offshore suppliers, all of whom must be thoroughly vetted for compliance with regulatory and corporate standards.  

Accurate data you can use to assess and mitigate risks up and down the supply chain is critical. Global businesses need complete supply chain visibility to fully understand activity and respond rapidly to risk and disruption. It’s important to remember that in today’s digital age, your company’s reputation can be undermined in mere minutes through negative social media activity.  

Here’s how to get a handle on your supply chain to safeguard against unintended harm and brand risk. 

Assess Your Current Process

Do you know how your current compliance process is working? 

Businesses have a responsibility to ensure their products not only move smoothly through the entire supply chain network, but also that all vendors are in alignment.  

software solution for managing compliance should be centralized to make sure that vendors comply with your standards, provide the information needed for good decision-making, and enforce accountability for all suppliers throughout the entire supply chain. It must also enable continuous improvement programs and Good Manufacturing Practices (GMP) by helping to identify areas that need improvement and create and manage corrective action plans. 

In addition, your supply chain processes should align with your customers’ expectations, and exception management should drive action to avoid fines and keep customer relationships positive. Your overall process should be efficient, with integration between trade compliances and supply chain processes. 

 If you do find gaps, inefficiencies, or negative impact in your supply chain processes, there are corrective actions that will go a long way to ensure compliance and mitigate risk.

Know Your Vendors to Ensure Supply Chain Compliance 

A digital platform for centralizing compliance management simplifies the complexities of both supplier compliance and management of corporate responsibility. Real-time data on vendor compliance means decision-makers have the information they need, when they need it, to mitigate risks to both corporate responsibility and regulatory compliance.  

Vendor scorecards based on performance metrics help ensure better sourcing decisions when used to assess and compare vendors and assist with onboarding. 

In addition, your supply chain teams should work to improve transparency and threat-detection skills: 

  1. Internally, it’s important to recognize and understand that the areas of compliance and procurement are converging. To gain efficiency and build resilience, collaboration between these departments should be encouraged.
  1. Accurate and up-to-date supplier data is required to verify all sources supplying raw materials, components or finished goods throughout all supply chain tiers.  
  1. Erroneous or out-of-date data costs time and money, as well as posing risk to your reputation. Make sure all your data is accurate and timely. 
  1. Verify your vendors are ethically and otherwise compliant by digging deep into reliable data to find vendors that fit your levels of certification. Maintain a vendor scorecard with profiles and performance statistics.  
  1. Use advanced analytics to manage risk while predicting possible areas of exposure; scenarios and simulations can help to assess the impact of disruptions and recommend optimal alternatives.

Maintaining supply chain compliance also means going beyond mere regulatory compliance. It’s important to know the expectations of customers, investors, and partners and to look at brand alignment. Your suppliers may meet all regulatory requirements but have undesirable attributes like a poor human rights record. Having a 365-degree view of every vendor in your supply chain is imperative. 

Watch this short video to quickly see how real-time vendor visibility enables full collaboration with the vendor ecosystem to promote discovery, evaluation and the communication of issues, thereby turning challenges into opportunities. 

Integrated business planning (IBP) is gaining traction as more companies look at refining their sales and operations planning (S&OP) process. It’s worth the effort to document what IBP means for your business, if for no other reason than you can’t implement what you can’t define. To that end, let’s reiterate the distinction between IBP and S&OP before we dive into some tips on how to make integrated business planning a success. 

The quick take: integrated business planning is long-range strategic business planning that combines volumetric and financial data into a single, highly visual comprehensive planning platform that delivers greater global visibility, more powerful multi-scenario analysis over longer planning horizons, tighter collaborative workflow, and a wider spectrum of alerts. 

Research firms, solution providers, and pundits have struggled to standardize the nomenclature. Some refer to it as sales and operations planning (S&OP or SOP). Some call it ‘sales, inventory and operations planning’ (SIOP). And then there’s ‘merchandising, inventory and operations execution’ (MIOE), for the retail sector.  

It’s useful to analyze these terms based on three overlapping planning horizons: executional, tactical, and strategic. 

Executional deals with balancing demand and supply over the near term, often within the span of the planning cycle. Tactical deals with the mid-term, which may mean anything from a few months to 18 months or more. Strategic deals with high-level alignment over longer horizons. Some call this Integrated Business Planning (IBP), while others also include tactical activities under the IBP umbrella. Here are some useful definitions: 

Sales and operations planning (S&OP or SOP) A traditional term whose definition doesn’t stretch far enough to cover all the bases including volumetric balancing of supply and demand. 

Sales, inventory and operations planning (SIOP) An attempt to emphasize the importance of inventory. Part of the basic S&OP process is the optimization of inventory. 

Merchandising, inventory and operations execution (MIOE) This is a retail industry synonym for S&OP. MIOE deals with the tactical level.  

Integrated business planning (IBP) Covers S&OP, SIOP and MIOE across all time frames. Whether you are in Sales, Inventory, Marketing, Purchasing, Production, or Finance, you are from the same business and are engaged in planning activities that are closely connected. 

The Power of Integrated Business Planning

According to industry research comparing the performance of companies that follow an IBP approach versus those that don’t, IBP users are:  

  • Better able to align supply and demand over the entire horizon  
  • More effective at collaborative planning and building real trust between stakeholders  
  • Able to reserve capacity at key suppliers earlier and more efficiently  
  • Faster to react to unexpected disruptions in the supply chain  
  • More likely to use alert-driven responses and adjustments  
  • Better at handling promotional demand. 
Tips for a Successful IBP Implementation 

From experience with thousands of customers, here’s Logility’s list of what the most effective IBP implementations have in common.  

The CEO owns the process. The CEO enables acceptance and delivery of IBP at all levels in the business, and must inspire the team to view IBP not as “another project laden with department-level redundancies” but simply how the organization operates. 

Sales contributes to the demand plan. Those closest to the customer have the best grasp of activity at the point of consumption, and therefore must be strongly involved and prepared to contribute to the demand plan.  

Finance is at the table, not a mere observer. The finance team’s participation is critical for testing different scenarios and protecting the integrity of financial projections. 

Think beyond the annual budget. IBP done correctly integrates the strategy with the business plan and ensures the delivery of both. In fact, you may find that IBP nudges your business toward a continuously updated two- or three-year financial plan.  

Don’t let details derail. Too many organizations make the mistake of plunging down rabbit holes and forming committees to explore minutiae. Looking at the bigger picture frees the organization to focus on higher-level planning needed for sustaining growth and improving margins. 

Get the culture right. Not surprisingly, IBP efforts often focus on process and data. However, the best deployment plans consider the cultural context and never lose sight of the following: 

  • A basic requirement for effective IBP is a culture that celebrates cross-functional collaboration not as a ‘nice-to-have’ but as a requirement for executing company strategy 
  • A culture accustomed to ‘delegating upward’ will bog down the executive review portion of IBP and reduce the speed of decision-making. IBP thrives when the lowest levels of the organization are empowered 
  • IBP places a premium on data-driven decision-making. But many challenging decisions will continue to rely on judgement. The culture should value seasoned judgment and not recast it as “guesses we made before we had all the data.” 

So get started on your journey to realizing the power of integrated business planning. Markets and competitors aren’t waiting for you. There are real insights and lasting business benefits to be had from managing strategic, tactical and operational planning with one platform.   

Take a look at this short video to see how Logility’s IBP solution supports accelerated planning and decision-making across the enterprise.  

Unraveling from the complexity of supplier disruption, unexpected consumer behaviors, and limited resources, supply chain organizations are looking to learn from the shockwaves of the past year. But this is not the time to focus on everything that went wrong. Priorities need to be set to drive changes that are meaningful to customers and the overall health of the business. 

Yet software giants have seized the recent explosion of technology advancements – such as cloud, predictive analytics, artificial intelligence, machine learning, and automation – to deliver modern, “one size fits all” enterprise resource planning (ERP) systems. Each system promises a wide range of scalable capabilities that can be extended and integrated across the value chain. 

Although comprehensive, these ERP systems are actually a collection of standardized capabilities bundled into a single offering that works best with little to no customization. How can such a monolithic technology support a world of supply chains with unique challenges, goals, and network diversity?

Common Supply Chain Pitfalls Inevitably Emerge   

While most supply chain organizations look to benefit from the acquisition, upgrade, or update of an ERP system, Gartner has estimated that 55% to 75% of all ERP-related initiatives fail to meet expectations. And even if the effort is successful, the function eventually encounters issues ranging from security breaches, go-live delays, and budget overruns, to disrupted operations and data-sharing bottlenecks. 

The limitations of ERP for supply chain may be common, but they are avoidable. A deep partner ecosystem is generally available to help businesses overcome this complexity with a litany of extra services at an additional (and significant) cost. 

Fortunately, it doesn’t have to be this expensive, risky, and inefficient. Companies can expand their search for technology beyond ERP. Doing so helps them define a best-fit strategy for improving supply chain operations and drive more tangible value without the exposure of unnecessary risk and additional complexity. 

For example, organizations can leverage a purpose-built digital supply chain platform that uses data from their existing ERP and matches it to their new data model. This preconfigured integration capability helps ensure a successful and efficient project execution, which typically overperforms a complete migration from a legacy ERP to a more modern one. Companies also have the flexibility to integrate data from many other sources with ease, while maintaining the existing ERP and embedding advancements such as deep artificial intelligence, machine learning, and process automation. 
Expanded Options Create Better Transformation Opportunities 

Once business leaders widen their selection scope to include best-of-breed supply chain optimization solutions, the question is no longer about choosing the right ERP vendor. Instead, they are more focused on picking the right building-block solutions and integrating them to optimize their supply chain operations. It becomes apparent that ERP vendors limit their capabilities to serve low maturity supply chains, while the supply chain experts who deliver best-of-breed platforms enable attainment of the highest maturity possible.

Fender, the world’s top maker of stringed instruments and solid-body guitars, is an exceptional example of the power of this extended view. Intending to increase end-to-end visibility and drive measurable global performance, Fender improved its forecast accuracy, inventory control, and supply-flow synchronization. More importantly, it is also minimizing any internal and external constraints on its production capacity. 

After a rapid implementation of Logility’s demand planning, inventory optimization, data management, and life cycle planning solutions, Fender realized an ROI in as little as six months. The flexibility and control of these function-specific solutions allow decision-makers to see how the business changes from one week to the next in the context of its strategic plans. As a result, the company is expanding through organic growth and acquisitions, while meeting the needs of new divisions, products, and markets. 

An Imperative for Supply Chain Transformation 

The debate over ERP and best-of-breed supply chain solutions is certainly still hotly contested – and rightfully so.  

Some risks may be obvious, like any other digital transformation project. But with the proper steps, businesses can realize the advantages of an integrated supply chain management ecosystem without the drawback of custom development and rigid structure of ERP architecture and data. 

Read more about how Fender was able to meet its total supply chain management requirements beyond the limitations of its ERP system here.

The e-commerce boom has forced virtually every industry to rethink its customer experience. From groceries and clothing to raw materials and machine parts, customers expect to have their order fulfilled quickly, safely, and with products that are ethically sourced. And this demand is placing extraordinary pressure on supply chains to keep up. At Logility, we recognize supply chains all over the world have a lot at stake. We have listened to our customers, seen first-hand their challenges and triumphs, and watched obsessively how the future of commerce is unfolding. All that information inspired us to release an updated version of our digital supply chain platform to address the changes ahead. 

While the Logility® Digital Supply Chain Platform offers solutions to a diverse range of supply chain challenges, two recent supply chain capabilities come to mind when I consider the critical aspects of today’s customer experiences: automated order promising and traceability

Meeting demand with automated order promising 

Businesses that know exactly what’s in inventory, calculate accurate shipping times immediately, and deliver orders as promised are the ones that ultimately win customer confidence. Connecting the dots across the entire supply chain to achieve this edge requires complete inventory visibility and intelligent order orchestration. 

Logility’s latest platform release positions supply chains to quickly meet demand requirements with smart allocation and precise order fulfillment. With a combination of in-memory processing and robust analytics, our customers can respond to every sales opportunity with a delivery plan designed to optimize profitability, protect margins, and ensure customer satisfaction.  

Furthermore, the platform’s automated order promising solution dramatically reduces the time needed to calculate the delivery schedule through automation algorithms that tap into real-time intelligence on existing inventory levels, capacity constraints, and regulatory rules. Short-order change notices are handled with such efficiency that the supply chain feels little disruption, thanks to what-if analysis and modeling that preempt any unintended repercussions. 

Documenting the chain of custody with connected traceability 

When it comes to buying decisions, most customers across all demographics actively seek and advocate for brands that provide ethically sourced and environmentally friendly products and deliver them with safe and healthy labor practices. A recent Forrester study reported that 68% of highly empowered consumers plan to step up their efforts to identify brands that reduce environmental impact, while 61% currently look for energy-efficient labels and 47% regularly purchase organic products. 

The world of fast fashion has faced this “guilty until proven innocent” burden for years. But now, every industry is facing the same pressure from government regulations and changing public sentiment to reconsider its traceability capabilities. 

Logility updated this feature in the platform to document the chain of custody, from source to importer of record. The traceability solution centralizes supplier information across primary, secondary, and tertiary tiers and even further down the value chain. Proactive resolution of emerging risks is supported through anomaly detection, exception alerts, advanced analytics, and rules-based discovery of unauthorized or prohibited suppliers within the supply network. 

Most advantageous for our customers is the opportunity to be transparent with their customers. Logility users can document every transaction and create a compliance certificate that summarizes every point of exchange for products and materials and make the record easily accessible to customers who want it. 

Redefining the supply chain’s influence on the customer experience 

Staying flexible and agile, embracing the voice of the customer, and pivoting operations to meet their needs are challenging alone. But when you add the fast pace and easy access of digital channels, there’s no room for error. 

With the Logility® Digital Supply Chain Platform, businesses can rest assured that they have the supply chain capabilities and support to navigate today’s intensifying e-commerce landscape successfully. And with the added layer of automated order promising and traceability solutions, they can provide experiences that restore the trust of their customers and keep them coming back for more. 

Solve your complex supply chain challenges with automation, flexibility, traceability, and a multitude of other enhancements. Learn more about the Logility® Digital Supply Chain Platform. 

What is integrated business planning (IBP)? Is it identical to sales and operations Planning (S&OP), an extension of it, or something altogether separate? A GPS for your business? That sounds more like a slogan than a practical definition.  

Call it what you want, IBP is probably best thought of as mature S&OP. It has overcome an early identity crisis and proved itself as a powerful enterprise planning tool, helping companies meld financial, sales, production, procurement and marketing information into a single plan, grounded in reality. 

What Does IBP offer? 

Integrated business planning is a new level of visualizing, evaluating and optimizing your supply chain. It distills complex, cumbersome and disconnected tasks into a single integrated process that streamlines and unites planning activities to produce better business decisions. Combining data from across the enterprise, IBP creates one planning framework by removing organizational and technology barriers and synchronizing plans across strategic and tactical time horizons. 

So What’s the Problem? 

How can something so potentially valuable be so difficult to achieve? Is there really a problem? Based on recent work with clients, Lora Cecere, founder and CEO of Supply Chain Insights, produced research that clearly demonstrates the decline in perceived S&OP effectiveness. 

why integrated business planning initiatives fail

Given that IBP is an advanced, well-developed state of S&OP, it follows that companies struggling with S&OP may consider IBP a bridge too far. At least temporarily. Unfortunately, some will simply stop trying. Even those organizations that have successful S&OP efforts under way are challenged by the stamina needed to continue the journey to fully-fledged IBP.

Why Integrated Business Planning Initiatives Fail

There are myriad reasons why integrated business planning initiatives fail, but we’ll focus on those we hear most often. 

1) No Executive Engagement 

How many times have you read that? It seems trite now, but one of the fundamental reasons why integrated business planning initiatives fail through lack of executive leadership is because: 

  • IBP done right is going to require hard decisions about risk mitigation and margins, for example, that leadership can’t delegate and can’t dodge; 
  • When it gets difficult — and it will — you’ll need to rely on the power of the hierarchy to move forward.
2) Poor or Non-Existent Data Governance 

CIO Magazine says data governance is a system for defining who within an organization has authority and control over data assets and how those data assets may be used.  

IBP will expose data silos and data turf wars, as well as multiple definitions for seemingly straightforward concepts like “forecast” and “demand.” Be prepared to work hard developing a single source of truth. Turning a world of data into a data-driven world depends on many things, including firm definitions and roles.

3) No Clear Goals 

Lora Cecere reminds us that IBP is actually the third step of maturity in an S&OP implementation. Each stage has a different goal. Over 95% of companies she consults with jump into planning without answering these three questions: 

  1. What is the goal of your S&OP process? 
  1. How do you make decisions? 
  1. What do you measure? 

Each phase builds on what comes before. Usually, after failing, companies find that they must first be able to execute “what if” analyses to determine a feasible plan before attempting to match demand with supply.  And that mastering the process of matching demand with supply is a prerequisite to successful IBP. 

4) No Cross-Functional Collaboration, Lack of Focus on Data Model and Analytical Plan 

These might seem like strange topics to combine. The whole point of IBP is aligning the organization in a forward trajectory, and that’s hard to do without the involvement of all the key stakeholders.  

Inability to translate among different functional views of information can be alienating, especially in the early stages when buy-in might be fragile. Sales inputs revenues by account, Operations may want to see demand in units by product, and Finance is interested in margin. Ideally, the same information should be tailored to stakeholders in a manner they understand.  

5) IBP Gets Positioned as an IT Project 

IBP can’t be viewed as a module that your ERP provider can license to you or a new report that IT could write for you if they had time. It must be positioned and even revered as radical, transformative, permanent, and worth the effort.

6) The Role of the Budget is Undefined 

Many industry experts believe the key change management issue for IBP is wrangling the role of the budget.  Some companies treat the budget as sacrosanct. As a result, they constrain the outcome of IBP to ensure that budget goals are met.  

Others realize that the quest to maximize enterprise opportunity while mitigating risks can mean that IBP outcomes drive budget updates. 

7) Poor Setting of Expectations 

Saving the most obvious for last, perhaps. Consider the following as you sharpen your diplomacy skills, preferably at the outset of your IBP project, not the middle:

  1. The entire contemplation is far-reaching and complex. Don’t strive for “one number” anything. Some companies spend months deriving a single “guiding” number that is so massaged and scrubbed that the only thing you can be sure of is its inaccuracy. Others paralyze themselves trying to evaluate hundreds of metrics. Pick your big 12 and start. Monitor them and learn from them. 
  1. Most IBP projects eventually uncover incentives at cross purposes. It could be Sales and quota credit versus Operations and customer satisfaction. Persevere! (And remember what we said about executive engagement.)  
  1. You are on a journey. There is no IBP finish line. But there are exciting milestones offering better business outcomes. 
Outcomes Worth the Effort

Understanding why integrated business planning initiatives fail is the first step towards success. The reality of IBP is that the effort spans multiple departments, people, timeframes and often continents. The path is not always pretty. But the rewards are dramatic: processes that balance resources and information with corporate objectives to increase revenues, reduce costs and boost profitability. Imagine understanding strategic trade-offs years in advance while making the day-to-day decisions based on the real-time pulse of your business. Top floor and shop floor in sync. But there are pitfalls. We hope the guidance above helps you avoid some of them. 

What do the port of Long Beach, California and the Suez Canal have in common? Water is one obvious answer to that question, but a supply chain professional might say, “recent headline-grabbing sources of supply variability that have disrupted global supply networks.” If it’s not COVID, it’s something else. 

Supply chain professionals are wrestling with many questions as we emerge from the pandemic. Fortunately, a pair of industry experts recently published a two-part series on implementing strategies for success despite inevitable disruptions in both demand and supply. In part one, Logility visionary Mac McGary and Supply Chain Insights founder Lora Cecere discuss demand fluctuation and what it means to ‘deliver better business outcomes’ in 2021.

In part two, Mac and Lora share valuable research and insights into what is driving supply variability in today’s markets, and provide achievable recommendations to address this challenge through:

  • Focusing on the form and function of inventory to maximize the utility of the buffer. That means understanding inventory positions and capabilities from raw materials through semi-finished goods to in-transit finished goods
  • Building and achieving a feasible plan and the importance of “what-if” analysis capabilities. It starts with defining “feasible” and establishing clarity of roles so the ‘top floor’ and the ‘shop floor’ are synchronized
  • Ensuring adherence to the schedule, which requires understanding constraints across the entire supply network

In addition, you’ll hear what supply executives believe are the biggest gaps between the importance of benefits they expect supply chain technology to deliver and what they’ve actually achieved.

And finally, you’ll learn how Logility customers Kraft Heinz and Clarios reduced inventory by $100M+ while achieving key business objectives in the face of COVID-19, through technology that enabled quick and effective reaction to disruptions.

Occasionally, I cross paths with executives from fashion brands who have a passion for producing products that give back more than they take from the planet. And this kind of leadership is redefining the old ways of business as usual with radical transparency and accountability to build truly sustainable enterprises. 

During this year’s American Apparel & Footwear Association (AAFA) Executive Summit, I enjoyed moderating a panel featuring industry executives from some of these ‘sustainability-first’ brands. Our discussion explored the meaning of a truly sustainable mind set and the secrets to bringing their vision to life. 

A noble edge gained through standardization and foresight 

Whether expanding a 50-year mission, advancing a three-year-old brand to reshape an industry, or demonstrating accountability with better transparency, some apparel and footwear companies are making quantum leaps in their sustainability programs and building truly sustainable enterprises. But to reach this point, they must first extend their focus beyond doing what they believe are the right things to find areas for improvement and take purposeful and verifiable steps to fix them. 

Take, for example, a three-year-old footwear company represented on the panel. Although founded on sustainability principals, CARIUMA also recognizes that its journey to becoming an industry-changing global brand is just beginning. Tiago Klaus, chief operating officer at CARIUMA, noted that its organization is structured to adapt to exponential growth – especially the supply chain – and will continue to evolve as demand accelerates and changes.

For an incumbent brand more mature in its sustainability mind set, recognizing that more than three-quarters of its emissions come from materials and associated supply chains opened the door to a more strategic perspective. Matt Dwyer, head of product impact and innovation at Patagonia, shared that expanding progress beyond recycled materials to establish manufacturing standards and sourcing policies inspires his workforce to focus on doing what he defines as more good rather than just less bad.

Meanwhile, some businesses operate in a completely different context: rising expectations for transparency in environmental and social impact leave little room for error. Devon Leahy, vice president of sustainability at Ralph Lauren Corporation, explained that setting goals and targets and measuring a complete greenhouse gas footprint are critical steps for creating a foundation for sustainability stewardship. But it’s equally important to design a governance structure across the organization to enable everyone – from boardroom executives to store employees and beyond – to engage, communicate, learn, and review its work as a unified ecosystem

Diverse approaches for building sustainable enterprises

Without question, the industry executives who participated in the panel proved what I’ve always suspected: there’s no single “perfect” approach to sustainability – even in the beginning. Every business has its vision for serving customers who all want environmentally and socially friendly products. 

This realization was especially apparent during our conversation around life cycle assessments (LCA). Recently, Ben and Jerry’s reported that it’s calculating this figure from pasture to spoon and using that information to adjust their supply chain and facilities to reduce its carbon footprint. However, according to my panellists, this one method is just one of many to consider in the fashion industry. 

Leahy felt that LCA could be a valuable tool to calculate relative climate impacts from its materials. Objectively knowing the true environmental implications of switching fabrics, such as from cotton to polyester, can be challenging without this approach. For example, brands could conduct a complete greenhouse gas inventory with this assessment, including manufacturing processes and raw materials that often generate most of a company’s emissions footprint. As a result of the evaluation, businesses can set a realistic, science-supported target for meaningful and long-term greenhouse gas reduction. 

However, some brands face a different layer of sophistication and complexity in their operations, making LCA less feasible. Dwyer prudently advised that to build truly sustainable enterprises, businesses must know what they want and have readily accessible data to get the right answers to gain the full benefit of the assessment approach.  

Companies must learn a lot about themselves and every aspect of their supplier network to implement meaningful changes and improvements across their supply chain – from verticalizing processes to understanding preferred materials are environmentally sound and represent a lower carbon footprint. 

No magic bullet, but a much-needed effort 

There’s no one magic approach to answer the sustainability and traceability needs that resonate for all apparel and footwear brands. However, my panel discussion at the AAFA Executive Summit made clear the importance and urgency of seeing every point across the business operations with an open mind.  

Consumers expect it. Governments mandate it. Social communities rely on it. And our planet needs it to heal itself. But most of all, the economic survival of the business requires it.