John Lash, Vice President, Product Marketing, E2open
If you’re unfamiliar with the term “supply chain planning system of record,” it is essentially the one place where an organization can bring together all supply chain data and plan its enterprise operations. To better understand just what this means, let’s explore the what, when, why, who, where and how of a planning system of record.
The first thing to know about a planning system of record is that it’s a unified platform that combines the key functional capabilities required to plan your supply chain operations, including demand, replenishment, inventory, production and order promising. A planning system of record also includes non-functional capabilities that don’t get the limelight but provide the essentials for making it all happen, such as connectivity and integration to enterprise resource planning (ERP) and other transaction systems, data cleaning and normalization, analytics, and collaboration support.
Equally important is knowing what a planning system of record is not. Although the names sound similar, a planning system of record is distinctly different from a transaction system of record. “Transaction systems of record” is the term for the many ERPs or execution systems in place across an enterprise. You’ll read more about them later in the How section.
Given that supply chain management is a continuous journey, when is the right time to establish a planning system of record? The simple answer is when you reach the point where a credible demand plan that is accepted by all stakeholders becomes a priority and you’re ready to go beyond the siloed departmental planning that’s typically handled via spreadsheets or disparate point solutions. At this stage, buy-in to an integrated plan is often more important than depth of advanced functional capabilities. However, a planning system of record is a foundational investment expected to last more than seven to 10 years, so it’s important to consider both current and future requirements to make sure you don’t get stuck with an entry-level system that needs to be replaced in a few years as business processes mature.
The value proposition usually comes down to improved productivity and efficiency. Time to value and total cost of ownership are inherently lower for a unified solution than for a custom integration of point solutions from multiple vendors. A unified platform streamlines planning workflows to increase productivity, freeing planners to focus on higher value-add activities instead of reconciling spreadsheets or replicating information across disparate systems. Most importantly, the use of a common data platform provides “a single source of truth” for all planning activities, ensuring a credible plan that is synchronized both horizontally across planning functions and vertically across time horizons.
Simply put, all internal stakeholders benefit from a planning system of record. This applies to any industry. The single source of truth makes it easier for stakeholders to collaborate across departments to reach a consensus and buy into the plan. Using the same data for all planning activities eliminates the friction that arises when each department manages its own data.
As business processes mature, collaboration often extends beyond the four walls of the enterprise to include supply, channel and logistics partner ecosystems. More advanced deployments support multi-enterprise planning where internal and external stakeholders share a common data platform and single source of truth for authentic end-to-end collaborative planning across the entire value chain.
While point solutions are often purchased by division or region, a supply chain planning system of record is typically implemented across the entire enterprise. Increasingly, these implementations are global deployments with regional differences respected through multiple planning and fulfillment modes as part of a larger supply chain segmentation strategy.
If you asked for the single most important thing to get right, the answer would have to be data integration. While this doesn’t sound very flashy or get a lot of marketing buzz, it creates the foundational underpinning for a planning system of record. Why? A planning system of record sits over the top of many underlying transactional systems of record and creates a digital representation (“digital twin”) of the physical supply chain. The quality of planning decisions depends on the quality of this digital representation, which in turn depends on your ability to connect with all transactional systems, extract and normalize data in a timely manner, and keep the digital twin both accurate and current.
The challenge is that large enterprises often have many ERPs and executional systems. Furthermore, these are in constant flux because ERPs are added or removed with each merger and acquisition (M&A) deal. To control both initial and ongoing costs, it’s critical to connect to transactional systems efficiently. For companies requiring real-time planning between scheduled runs or advanced deployments where planning and execution are orchestrated between internal and external partners, integration has to be even tighter. As the digital twin becomes live and dynamically updates to stay current at all times, the traditional approach of exchanging flat files between systems no longer cuts it.
What’s the takeaway? If going beyond periodic planning to more advanced capabilities might be — or should be — in your 10-year roadmap, then it’s important to consider investing in a planning system of record platform that can grow with you.