Supply Chain Shaman

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How Do We Stop Buying Planning Software the Wrong Way?

As I sit at my desk answering client calls, spring beckons. I am a gardener, and my dirty plastic clogs sit patiently on the mat by the door, calling me during the workday.

This winter—darkened by the cold, cruel hand of COVID-19—was harsh. The burst of spring coupled with my second Pfizer vaccine gives me a glimmer of hope that perhaps the dark curtain of being chained to the home office is lifting.

As I face my same screen day after day, monotony hangs heavy in the air. In this bleak period, it is hard for me to contain the inner Lora on client calls. The sameness is torture. Answering similar questions, and staring out the same window, tries the soul. I fight with Lora to be patient, but it is a difficult struggle. She is bored.

So, I thought that I would start publishing some typical Q&A from my calls in hopes of wearing my gardening clogs more. To protect my clients, I am making the conversations generic.

The Process of Software Selection

My struggle? I am constantly amazed that business leaders can engage with technologists month after month (often over eight and sometimes over a year) to select a supply chain planning system and then call me to ask for help on the decision. My first response is usually, “Why?”

To demonstrate the point, let me share a discussion with a client; let’s call him Joe. As the director of planning, Joe is involved in a multi-year process to select a new planning solution. I ask Joe, “How can a team be involved in a sales cycle for supply chain planning for eleven months and not be able to make a decision?” I shake my head in amazement while Joe responds, “It is not so easy, Lora.” I then ask, “Why?” The response—a process hijacked by corporate politics– confounds me.

My observation is that the frequently used process selection drives more confusion than clarity. Joe’s selection team is large (twelve people from multiple organizations), and they are not clear on what defines a good plan. I question, “How is this possible?” as I watch the birds building a nest from my window.

Here is a brief synopsis of the dialogue.

Joe. “We are considering the purchase of  Blue Yonder, Logility, Kinaxis, o9, or OMP. They all sound so similar that we are struggling to make a decision.”

Lora. (Lora laughs.) “If they seem similar, you have failed in your discovery. The solutions are very different. The choice depends on your goal. What are you trying to accomplish?”

Joe. “We are seeking an end-to-end-planning solution to improve Sales and Operations planning.”

Lora. “Sorry, Joe, that does not tell me much. What is an “end” and what is “an end” in your description? And, what are you trying to model? For you, what defines a feasible plan? How do you define excellence in planning? If you do not give technology providers clear guidance, you end up in a state of confusion. We should build with the end goal in mind. What defines S&OP success for your organization?”

Joe. “We picked the technology providers from the Gartner Magic Quadrant and then issued an RFP.”

Lora. (Lora laughs again and shakes her head. ) “Joe, this is a recipe for disaster. Companies that buy technologies from an RFP process have a high likelihood of ending up in this predicament. Buying planning software is a lot like buying a car. You start with what matters and then test drive the vehicle. Would you ever buy an automobile for your wife using an RFP?

Joe. (Joe laughs) “No, she would kill me. We would go for a test drive. Multiple test drives, and then we would check out the color selections of the platforms at multiple dealers. She is very clear about what she wants, and it would be a process of negotiation.”

Lora. “Planning software selection is similar. You start with the criteria and then test to select alternatives. You will never be successful in selecting planning software from an RFP or an analyst model. I am constantly surprised how many intelligent manufacturing teams buy software from PowerPoint.

There is a need to change the mindset. The team should focus on the goal and then build test plans to test alternatives. Have you tested the solutions?

Joe. “No. I thought we would do this after we buy the solution.”

Lora. “Spend your time learning how to answer some basic questions. First, what makes a good plan? Secondly, how should you use technology to improve your decision processes? Will you use new technology approaches to improve decision-making? Hopefully, through the use of technology, you can improve the decision process.”

Joe. “Let’s talk about that. What is the value of forecasting? My organization does not believe in demand planning. The lack of belief in demand management is a barrier for us. How do I help my leadership team understand the value proposition?”

Lora. “An analogy is what’s the value of brushing your teeth?”

Joe laughed.

Lora. “I know that it sounds funny, but a good demand plan helps organizations to align and discuss the market potential. If you don’t brush your teeth, expect large bills at the dentist. Avoid focusing on building a good demand plan and expect significant issues in service and inventory. Of course, this assumes that you accept that all plans, even the best ones, have error. Most companies focus on trying to make imprecise numbers precise. The goal of demand planning is to identify the error. The process will never be perfect. Instead, demand output is directional. ”

Lora. “So, the first value proposition of demand planning is organizational alignment. Teams are not naturally aligned. The larger the organization, the more you need clarity on a demand plan and a clear definition of supply chain excellence. To understand the benefits of improving the demand plan, model it using network planning and simulation tools. For example, use one of the more simplistic technologies (like BlueCrux, Coupa, or Riverlogic) or great consultants to test the impact of demand error or bias on cost and inventory. After getting the results, change the discussion. Don’t focus on error reduction for error sake. Instead, focus on improving error to reduce cost, improve inventory, and delight customers.

Joe. “Why can we not just benchmark with Gartner or APQC to get the results?”

Lora. (Lora groans.) “Each supply chain has its own potential. Do you wear a Polar or a Garmin watch to train in the gym to understand your body’s potential?

Joe. “Now you are talking. You know that I love the gym, and I get the drift. I could never depend on my trainer to be a substitute for measuring my heart rate and energy output. I get the analogy.

So, we have spent ten months in an evaluation and gotten nowhere because of the approach? What do we do now?”

Lora. “ Stop the craziness. Contact all of the technology companies and ask them to work with you to get to a better place. Build a test plan based on the definition of planning excellence. Ask the technologists to participate in a bake-off. In the process, be a good client. Use clear definitions and measurable outcomes.

I look forward to hearing about your success.”

Wrap-up

So, if you are buying software based on PowerPoint pitches, RFPs, and analyst frameworks, you are destined for disappointment. Instead, work cooperatively with technologists to test and learn, and evolve. Great clients have clear definitions and alignment of their teams on business outcomes.

Good luck! I hear the garden calling.

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