When it comes to implementing supply chain planning and operations solutions, success relies heavily upon an organization’s ability to identify and document its desired value measures and outcomes, and to align those with its solutions provider. Here are five critical practices that supply chain and business leaders should incorporate in the process of developing project goals – and avoid a painful implementation.
1 Co-develop a business case with vendors.
It’s important to plan a supply chain technology implementation carefully and to understand that the vendor and the client are partners on a journey to realize value for the client organization.
That’s why both the client and the vendor should have a clear understanding of the real-world problems the client faces, how the software is going to help fix those problems, and, therefore, which software components are crucial to the effort. That meeting of the minds is critical in seeking out a software vendor and to the success of the eventual implementation project.
The outcomes of brainstorming sessions between the client and vendor teams should be documented in a joint business case. The absence of such a well-thought-out document could risk delay in the approval of the project at the executive level, leading to the loss of project benefits. Agreeing on a joint business case, by contrast, reduces the chances of misunderstandings between the two partners as the implementation process moves forward.
data availability and data gaps.
Certain categories of data should be available or must be available for specific types of supply chain technology implementations. Master data, for example, provides a foundation for understanding how and what to measure for a particular supply chain and what is possible to measure for a particular technology implementation. Transactional and customer-facing data, such as transportation data and manufacturing and purchase orders, are important for generating demand signals and calculating demand variability.
The presence — or absence — of required data is going to have an impact on the metrics being used to measure the success of the project. In other words, the data available for use in the project is going to inform the realistic goals for the implementation. Setting goals without understanding what data is available and required
Supply chain planning technology requires a data-rich environment, and it’s important to understand what data is there to support the desired outcomes and how to compensate for data gaps. Ensuring that the necessary data is readily available will support supply chain planning and decision-making and will increase the odds that the project will achieve its planned measures and metrics.
3 Align on goals and KPIs.
Supply chain projects at different organizations will inevitably be focused on divergent aims. Some organizations will want to focus on improved forecasting. Others will be looking for solutions to operating in a constrained supply environment, while still others will want to improve their order fulfillment processes. And some will want to achieve all these goals and more!
The goals of any given project dictate what is going to be measured and how success is defined. That’s why it’s important for all project stakeholders, among both vendors and users, at the executive level and on the implementation level, to be aligned on goals and key performance indicators (KPIs).
Supply chain projects call for continuous improvements to an organization’s capabilities, and that means that goals and KPIs represent moving targets. Stakeholders at all levels need to check in periodically on where baselines have moved in order to reset goals.
It’s impossible to improve what is not measured and it’s impossible to improve processes and capabilities if those goals are not shared across organizations, all of which necessitates an alignment of goals and KPIs across the vendor and client enterprises.
4 Understand your baseline data on current-state KPIs.
Like having a clear line-of-sight on your available data for measurement, understanding your baseline data is the starting point of a supply chain technology implementation, and provides an indication of where a project needs to go. To set achievable expectations, it’s important to identify an accurate and realistic baseline against which to draw KPI measurements.
Baselines often change between the time of initial discussions and the point when project implementations get underway, because project teams often tweak project requirements in the interim. For example, the project team may opt to implement a different type of planning process, which would use different types of data and/or different measurements of data than are currently being tracked. Over time, baselines get fine-tuned to match the desired future state, making it possible to measure improvement over time.
Supply chain technology implementations are fundamentally dynamic processes. The go-live moment is not an end in itself, but a milestone on a much longer journey, representing the point at which the system is up and running, data is flowing, and the people are using the software. But the value realization of those activities, the ultimate goal of the project, only comes later on down the road. The touchstone of any supply chain technology implementation always is and needs to be continuous improvement.
5 Hold one another accountable.
Taking the documentation of goals and measures into the realm of action means ensuring that the decisions made during the course of an implementation are all driving toward those documented and agreed-upon goals. Vendors need to encourage their clients to push toward the right goals and KPIs, and the client needs to keep the vendor on track toward achieving the client’s desired state.
The natural conflict between demand and supply provides an analogy to this sort of mutual accountability. Demand teams might claim that increased supply would have resulted in better sales. Supply teams might contend that more accurate demand plans would have better enabled them to achieve manufacturing and supply targets.
The cross-pollination of KPIs promotes the mutual accountability between vendor and client that is required for successful implementations. Sometimes that’s going to make for some uncomfortable conversations. But these are to be expected during implementations, and it’s a good idea to keep in mind that the purpose is to increase the probability that the outcomes everyone is striving for will be achieved.
Logility: Working with Supply Chain Organizations to Ensure Measurable Results
Logility, Inc., a leader in prescriptive supply chain planning solutions, through its Logility Digital Supply Chain Platform, uses artificial intelligence and advanced analytics to provide end-to-end supply chain capabilities that automate planning, accelerate cycle times, increase precision, improve operating performance, break down business silos and deliver greater visibility.
When Logility first engages with a potential client, “The ‘why’ is the most important thing we look at,” says Evan Flinn, a Logility solution architect. “We want to know why the company is soliciting an RFP for supply chain planning software.”
That inquiry allows Logility’s team to understand the business challenges the potential client is facing. “The implementation becomes all about getting to the client’s goals,” says Flinn.
Once Logility kicks off a project, it convenes a value realization session. “That’s where we talk about success measures and start to find ways to define them,” says Flinn. “Then we’re able to advise the client about where we think we can find value and how we would measure outcomes.”
Understanding the client’s maturity level — how far along they are on the path to supply chain improvement — is key to that effort. “Reasonable outcomes are going to vary,” Flinn explains, “depending on whether they are already using a planning system or if they’re coming to us with no system.”
These efforts help to ensure success, as Logility and its clients embark on their journey together. “The roadmap for the journey includes prioritizing outcomes, to provide clients with an idea of time to value,” says Flinn. “Time to value is value in and of itself.”