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Changing the Perception of Supply Chain Planning

Companies looking for a supply chain planning tools usually go one of two ways: They sign up with a best-of-breed solution provider for the tools they need, or they buy add-on modules to expand their existing enterprise resource planning (ERP) capabilities.

User satisfaction levels with a planning tool, however, seems to fall outside those clear-cut black and white lines.

Quantitative survey results comparing best-of-breed solution providers (such as Logility, JDA, Kinaxis and OM Partners) versus ERP-expansionists who have market-share dominance (namley SAP and Oracle) and an online webinar poll revealed interesting, and differing, points of view, noted Lora Cecere, founder of Supply Chain Insights, in her recent Supply Chain Shaman blog.

User feedback from 93 large manufacturing companies with over 180 demand and supply chain planning instances showed users are “more satisfied, the implementations are shorter and there is greater return on investment of solutions from best-of-breed solution providers—especially if the best-of-breed solution providers used are industry-specific,” Cecere wrote. “However, in the polling data in the APICS webinar, we found that over 70% of the respondents had deployed solutions from the ERP-expansionists.”

 She begged the question, “Why would a company deploy a solution that is more costly, with a longer time to value, to drive lower satisfaction ratings by the planner?”

Cecere – a longtime supply chain authority who is working on two reports about sales and operations planning and inventory optimization, which I expect will flush out these points in more detail – lists several reasons why this could be happening. Two of them, in particular, caught my eye.

One of the reasons could have ripple effects in the supply chain analyst and consulting market, or at least in how they are perceived. She contended that consultants recommend SAP and Oracle solutions because those tools better fit their implementation models for longer, more costly project deployments; best-of-breed solution implementations, however, tend to be smaller, cost less, and are best implemented by the vendor, she added.

Another issue lies with whose definition wins when it comes to  buying a solution, she said. On one hand, business leaders and IT directors want the same thing  – an integrated solution. The problem arises when you ask each group to define “integrated.” Business leaders think of it in terms of end-to-end supply chain solution, while IT's definition encompasses the movement of data with a defined context through an API, Cecere wrote.

Both points drive home the hard issues many high-tech companies have had to grapple with for many years now. As supply chain complexity has increased and the urgency of improving the planning process speeds up, companies have had to make important choices about how their IT tools support their supply chain goals, and how their supply chain practices can be melded into their existing IT framework. It's a costly choice with long-range implications.

How did your company choose? Let us know in the comments section below.

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