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Interlace Systems has announced the next release of its sales and operations planning (S&OP) software. It offers new functionality to automate data development, presentations and management for executive-level S&OP review meetings. These new capabilities should appeal to companies looking to improve the effectiveness of their operational planning and to assure that financial performance goals are met. Ventana Research believes that with this new top layer, the Interlace solution will impact the operational planning market.
Basically, S&OP is a set of planning and decision-making processes that not only balance product supply and demand but also link day-to-day operations with business goals, operational planning and financial planning. The purpose of S&OP is to enable decision-makers to reach consensus on a single operating plan that allocates critical resources to reach corporate performance targets. Among other things, S&OP best practices include consensus demand planning among multiple lines of business or brands, multiple factories or regional operational facilities, and formal, executive-level S&OP review meetings. Those formal reviews assure that key demand, supply, capacity and product trade-off decisions are visible to those at the top of the organization.
Properly done, an executive S&OP information meeting package should include an agenda or list of key decisions to discuss, figures for sales, production or purchases, rough-cut capacity plans, corporate scorecards with performance targets, plan-vs.-actual reports, new product development summaries, progress updates on projects and initiatives, and an S&OP process report card. The meeting output should be a single operating plan that all departments - sales, marketing, manufacturing, procurement, product development and finance - subscribe to as the target plan. The scope and length of that plan will vary by industry, but the objective should be the same for all: to align operations with corporate strategy and goals.
This month Interlace Systems announced a new version of its S&OP software called Executive S&OP Live. The new release automates development of presentations and management for executive S&OP meetings. Its features include integrated demand, supply and finance models, S&OP metrics and interactive dashboards and analytics that can be delivered via Microsoft Excel and PowerPoint. Interlace's new release is Web-based and offered as either a traditional on-premises deployment or hosted software as a service (SaaS).
Operational planning and analytic tools dedicated to the S&OP process continue to attract the interest of manufacturers and distributors. Competitive pressure for new products, complexity caused by growth in new products or services, and rising customer expectations of order fill rates all are driving S&OP improvement initiatives. As companies seek S&OP improvements, they can look to only a handful of software vendors to provide a breadth of functionality that supports both cross-functional business planning and executive S&OP: Demand Solutions, i2, Logility and SymphonyRPM. With its improved executive S&OP capabilities, Interlace is positioning itself with these vendors, but the company will need to differentiate itself against the growing field of new entrants such as Cognos and SAP, which have compelling offerings for financial planning integration. The challenge for Interlace will be to move beyond its traditional customers in supply chain operations to persuade the finance side of the house to adopt its planning application.
Companies looking to leverage their supply chain and operational investments must automate executive planning review processes to enable operational performance management. Sales and operations planning is a necessary and important component of a mature, driver-based planning process, which enables executives to manage a company's performance more effectively. This kind of planning recognizes explicit input/output relationships and therefore is capable of optimizing resources and benchmarking performance in ways that traditional combined "budgetingandplanning" is not.
Sales and operations plans make it feasible to understand quickly the changes in resource requirements within business cycles and how best to allocate resources to help meet a company's longer-term strategic goals. S&OP plans also permit companies to do more intelligent what-if analysis to seize new sales opportunities or react to supply and product availability challenges, as well as to react and adapt more effectively to changes in the competitive or economic environment. Ventana Research believes Interlace's Executive S&OP Live can support this requirement by providing to companies an integrated planning framework and to executives the necessary decision-support tools. Companies seeking improved S&OP capabilities in these areas should consider the new Interlace offering.
S&OP - A New Approach to the Single Enterprise View
S&OP integrates fragmented plans to improve operational performance.
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2006 Ventana Research
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