CPG companies can collaborate more effectively, get consensus, and make better decisions faster with the right solutions for S&OP success.
To say that today’s CPG marketplace has faced some disruption is an understatement, and the pandemic is only one of the elements causing turmoil. Companies using outmoded tools such as Excel spreadsheets and simple database systems to manage sales and operations planning (S&OP) have found themselves in an almost impossible position — stuck with outdated data and a manual reconciliation process that is both time-consuming and error-prone.
It’s time for CPG companies to evolve, dump the spreadsheets, and embrace robust consumer goods technology that unites demand and supply information, supports advanced S&OP capabilities, and streamlines the entire process. This solution must enable collaborative workflows, a common (and shared) data repository, and rules-based exception alerts as well as real-time demand information that seamlessly connects to real-time supply response.
The Problem with Spreadsheets
There’s a certain comfort level with spreadsheets, but they are holding your company back. As you begin your monthly planning cycle, data is manually collected and reconciled. This error-prone process takes so much time that, by the time your consensus meeting happens, a lot of the data is outdated. That inhibits good decision-making.
The value of a consensus plan is determined by its successful execution. Strong, integrated planning requires closed-loop integration with enterprise technology systems, something that can’t be achieved with spreadsheets and simple databases. This integration is essential for the extraction of up-to-date and relevant data as well as the analysis necessary to develop a final plan.
Without the right technology solution, data sharing, feedback, and consensus gathering is a cumbersome process. An aligned plan takes up the valuable time of multiple team members — C-suite, finance, supply chain, manufacturing, marketing, and sales — repeatedly, while manual tools do nothing to facilitate the S&OP process.
Use the Right Solutions for S&OP Success
While spreadsheets can be used to support S&OP, they simply lack the functionality and flexibility needed to support advanced capabilities, including:
- Long-range strategic planning and integrated S&OP
- Performance-to-plan comparisons
- Multiple time horizon models
- Key component vendor capacity risk assessments
In addition, the right digital platform for CPG companies provides financial and volumetric plans using multiple currencies and global, regional, and multi-divisional structuring plans. It can provide impact, timing, and risk assessments for new products.
A truly successful S&OP initiative can improve forecast accuracy by 20% to 50%, reduce inventories by 10% to 30%, and facilitate a 5% to 15% decrease in manufacturing downtime. On-time delivery can increase as much as 10%, new product launches can be improved by 20%, and revenue can increase by 2% to 8%.
Artificial intelligence and machine learning can generate demand data in real time, and it can be connected to real-time supply response to automate this part of the S&OP process. This gives companies an event-driven supply chain that can react confidently in the short term and analyze risks for the future.
Traditional spreadsheet- and ERP-based planning is inefficient and a significant drain on company resources. A successfully integrated business planning process means a continuously updated operating and financial plan that ensures all information is current around demand, supply, new product development, strategic initiatives, and finance.
Logility IBP/S&OP Solutions to Support Your Success
Global business complexities are growing every day, which means companies must have business processes that manage the trade-offs between the supply and demand sides of their supply chain. Your company needs processes — and the right supply chain planning platform to support them — to provide accurate forecasting and create one plan for the business.
The Logility® Digital Supply Chain Platform provides that flexible, single platform for digital and operational supply chain success, supporting sales and operations planning (S&OP) as well as sales and operations execution (S&OE).