Supply Chain Planning Blog

Why Is Buying Supply Chain Planning Software So Hard?

Posted by Alan Gober on Thu, Jul 30, 2009
Supply Chain Planning SelectionHaving been involved with supply chain software sales environments for the past 15 years in the United States, Europe as well as Asia, I've seen all shapes and sizes of software procurement processes.  Each has their own unique flavor and is sometimes very telling of the corporate culture of the company you are working with.

Procurement processes have been refined over the years to facilitate the purchase of everything from raw materials, hardware/equipment, to office supplies.  The methodologies employed have been designed to ensure that companies get the product that best meets their needs, at the best possible price.

Unfortunately, many of these long standing techniques don't work as well when you try to apply it to buying planning software.  One of the major reasons for that is because in most organizations planning is still subjective, and considered more of an expertise.  Planning is still very much an art - it's the art of taking a wildly dynamic and uncertain world and trying to make some sense of it.  While there are certain aspects of planning that you can apply formulas, algorithms, and solvers to, ultimately planning decisions are still judgment-calls in many of today's enterprises.  Therefore, with lack of a systematic and central solution, most times there isn't a single right answer, but rather the better of several bad answers.  And depending on who you talk to (and in many cases how they are compensated) you'll get different opinions on which one of those answers is indeed better.  Is the given decision better for one group and worse for another?  Is the decision worse for a one group but better for the company as a whole?  Each decision is a series of judgment-calls taking into consideration the various trade-offs.  Depending on the specific situation at any given time you might make a different decision the next time than you did this time.

And let's not forget about the "Super-Planner".  Every planning organization has that one person that has been around forever that just seems to "get it".  Through their years of experience they know the 'right' thing to do in any given circumstance, whether it's a manufacturing line down, supply de-commit, order pull-in, or whatever situation among the infinite possible combination of scenarios that might arise.  No one can exactly understand how they do what they do.  If you ask them they quite often can't really explain it either.  It is also very interesting to see how many planning solution initiatives get underway when one of these Super-Planners approaches retirement. 

Where they run into difficulty is how do you translate all of that experience into a technical/requirements specification that you can run your standard procurement process against?  The simplest way to start is to come up with your baseline requirements that describe the various types of planning problems you encounter. 

There are vast arrays of planning solutions on the market that are designed to help make these challenges easier to handle.  Many of them will make use of standard templates to help streamline the application of its capabilities into your environment based on your general requirements.  But these solutions have to be open enough to easily fit in with your current systems, and flexible enough to absorb your planning process.  Also, choose your supply chain consulting partners or vendors wisely, in order to best map the unique organizational dynamic inherent in your specific employees, processes, and operating model.  Needless to say, their experience in your industry is very important.  

What you need to realize and accept is that unless you never say "it depends on..." or "except for when..." your situation can not be represented exactly by any static requirements list or even a standard template.  No two companies or industries are 100% alike.  It's those differences that make each company unique and in many cases what provides the competitive differentiation.  It's also those differences that make buying standard planning solutions harder than buying a copy machine.

Alan Gober is currently the VP of Bus. Development- East Coast, at Adexa.  Feel free to contact him at agober@adexa.com , Or visit http://www.adexa.com/.

Topics: Supply Chain Planning, Purchase