(By Sanjay Jelaji)
Let’s face it. Things don’t always go as planned. And this applies to the implementation of advanced supply chain planning systems too. So, what can you do after a failed APO implementation? This was a direct question that was asked of us at a recent conference. This blog will answer that question.
At a younger age, I always felt that planning and forecasting related jobs were great because it was okay to be wrong. Whether it was weather forecasting or supply chain forecasting and planning, you were given a certain amount of latitude in making mistakes when compared to other jobs. In fact, it was a certainty that reality or actuals were going to deviate from the plan. It was just a matter of how much. After all, the plan or forecast was just an estimate or a prediction of sorts. After having spent several years in the world of supply chain planning processes and systems, I have gained a whole new perspective on its importance and the impact it can have on downstream activities. So, what does this have to do with failed APO implementations? Well, the importance of planning when implementing an advanced planning system cannot be over emphasized. And this includes more than just project planning: it means the identification of the unique aspects and complexities of implementing business processes and systems that are strategic in nature.
- Master Data is a lot more crucial for planning systems when compared to other systems and modules. The real issue here is that identification of accurate data is not easy to determine. There is a lot of analysis that needs to go into determination of accurate production rates, lead times and safety stock data. This analysis needs to be done not only during the implementation phase of a project but also on an on-going basis. In order to achieve this master data, ownership needs to be clearly defined for both the implementation and on-going maintenance. It is preferable that ownership is centralized but can be decentralized as long as master data rules and procedures are clearly defined and documented.
- Active business participation during the implementation, with clearly defined requirements, is clearly needed to avoid failures. This is not easy for a small or mid-sized company, due to the associated cost. However, it goes a long way in establishing ownership and ensuring a smoother roll-out. The participation is especially crucial during the requirements gathering and testing phases of the project.
- Having a highly experienced consulting partner that can talk the language of technology and business process is crucial. You want a consulting partner that can talk through industry best practices and challenge existing businesses processes that are flawed. And it is better if this is identified early on during the requirements gathering phase so that improvements can be incorporated into the new design. A specialized partner needs to be considered for implementation of an advanced planning systems, especially when optimization engines are part of the solution.
- Keep it simple despite the complexities of on advanced planning system. There is a general tendency to think that all possible constraints and processes need to be considered in order to get a plan that is feasible. Most planning systems allow for varying degrees of granularity and constraints, depending on the planning horizon. And these need to be considered as one attempts to balance the need for more accuracy and an acceptable feasible plan.
- The organizational structure for supply chain planning needs to be reviewed and should be considered a part of the implementation. All planning roles and responsibilities need to be clearly identified and defined within the new system. This helps to establish what a day, week or month in the life of a planner looks like. It also aligns the hand-offs and loop back procedures within the organization.
- Integrating Strategic, Tactical and Operational Plans is key. It helps if these business processes are clearly defined. It helps a whole lot more if the integration between these plans is also defined. It will be worthwhile to take the time to get them defined and refined before an IT solution is implemented.
- Identify KPI’s and scorecards that need to be tracked and measured. A lot of times, the measurement of effective and feasible supply chain plans is an afterthought. If they are not defined, it becomes harder to determine if the proposed design has considered everything or not.
So getting back to the original question: what do you do after a failed APO implementation? Some of these factors mentioned above seem to be fairly common sense. However, it is never easy to analyze and keep on top of these considerations during an implementation. It is important that there is a project or design lead that can rise above the weeds and evaluate this on an on-going basis during the life of the project. Having said that, it can be assumed that some of these factors, or the lack thereof, could have contributed to a failed APO implementation.
Now, one could go back and re-implement after taking all these considerations into account. Or a different IT solution could be considered if certain key functionality is missing in the solution that was implemented. Another alternative is to identify a new implementation partner that can help to analyze the failed implementation. Before any of these alternatives are entertained, there needs to be an internal audit to understand why the implementation failed. It is important to stress on the importance of it being an “internal” process to begin with as it will take some of the external bias out of the equation.