Today, businesses expect their supply chain and procurement specialists to be delivering business strategy and integral to this is the need for competent planning processes. According to Dave Alberts, director at global supply chain consultancy Crimson & Co, an Advanced Planning and Scheduling (APS) System is a critical tool for supporting this, but for it to be effective, the right skills and people need to be in place.
The concept of supply chain management is in the midst of a strategic shift, driven by heightened market pressures, tighter global security and the need to manage relationships across the globe. This has shone a light on key supply chain disciplines, and none more so than planning.
Traditionally, planning processes have been built using tools such as Enterprise Resource Planning (ERP) systems and supported by an array of spreadsheets. These have proved cumbersome and inflexible to the modern, fast-paced demands of ever-changing business environments.
Innovative organisations have looked to do away with this by implementing APS systems, which can bring about significant advantages to planning practices including a greater ability to deal with complex decision making, as well as significant cost savings across the supply chain. Research carried out by Crimson & Co into planning and scheduling in major organisations revealed that an effective APS system could result in a 20% reduction in working capital, 5% increase in service level, 6% reduction in logistics costs and 3% reduction in the cost of goods sold. However, while these results are impressive, companies are failing to unlock these benefits due to a lack of skilled staff:
“The role of the supply chain is in the midst of a sea-change. It is increasingly seen as an integral part of shaping and delivering business strategy. Central to this is planning, and that is why APS systems are so important. In most cases, the adoption of an APS system can reduce overall supply chain cost and allow the business to better manage complexity, but this can only be achieved with the right skills and people in place.
Alberts reaffirmed: “Much like the change in the role of the supply chain professional there is also need to recognise the change in skills needed to carry out the job effectively. During the old planning systems implementations, many planners only received transaction-focused training, which taught them how to perform a given set of transactions. They were not instructed on how to assess, understand and improve system generated plans, which is essential now. The result is the poor quality of planning outcomes, reduced user adoption, and low ROI as planners revert to manual, offline planning processes and dust off old spreadsheets.
“Today,” Alberts continued, “the planner role when using an APS system is characterised by the need for a mix of supply chain, financial and analytical expertise to understand the trade-offs in modern planning decisions. This skills mix is fundamental in APS systems because they are inherently all about managing business trade-offs. Trade-offs like capacity versus inventory, customer service versus supply lead times, purchase cost versus batch sizes or revenue versus profit.
“Many see this as solely a technically based skill-set, but that is not the case. A wide range of non-technical capabilities is also required to unlock the full potential of effective planning processes including very strong influencing skills and a very high level of interpersonal skills given the cross-functional nature of planning. This is something we advocate strongly at Crimson & Co through scprime®, our improvement approach, which ensures that the right people are in the right jobs, consistently doing the right things.”
Alberts suggests that to address these shortcomings change must come from both individual organisations and the industry collectively: “Supply chain leaders need to put in the time upfront to ensure they have the correct skills mix in place to unlock the benefits of APS systems. The Chartered Institute of Procurement and Supply (CIPS) is an excellent example of an organisation that provides certified training for procurement professionals but when it comes to planning an equivalent does not exist – addressing this would allow greater collaboration across industries creating better best practice.
“For companies, it is imperative that early on in the planning transformation journey they make sure to understand the specific and broad capabilities that are essential and not just focus on transactional training. Future planners will still be planning although the role will shift to analysis and development of costed options, alternative scenarios and adding value by helping the business make the right choices.”
Alberts concluded: “Ultimately, APS systems represent how we should conduct our planning processes in the future, but firms will continue to lag unless they address the skills needed to implement it – it is imperative we action this now!”