Supply Chain Planning Blog

Can A "Light" Supply Chain Planning System Get Too Thin?

Posted by kameron hadavi on Tue, Sep 07, 2010

Light Supply Chain Planning SystemsWhen it comes to planning software, the terms “Lightweight”, or “Light” can be very misleading. After all, what is a “light” planning application? The word itself really has no objective meaning, or a standard definition that can be measured to see which applications meet the requirements. In most cases, the term “light” is a marketing idiom that is used by a software vendor looking for a new market niche to sell products. To that end, buyers should take extra care in choosing a solution presented as such. Let’s look at some big claims that are made about “light” planning solutions and some pitfalls to be aware of:

1) Lower Cost: Lightweight applications are trying to target a lower cost buyer.

Beware: A better measure here would be to understand the cost of the software and the potential business savings that can be realized with the given software package. Generally smaller companies look for “lightweight” since the potential for savings is less due to their size.

2) Fast: Speed is important in a planning application since it enables a planner to quickly analyze the plan, and run “what-if scenarios”.

Beware: The “lightweight” planning software offer more speed by cutting functionality. An application should be examined based on the time that it takes to run, its ability to compare scenarios, and the level of granularity of the plan. The best of both worlds is a planning tool that offers functionality options to tradeoff speed and granularity. That way the company can reduce granularity in areas that are not important to the business and include detail in areas that can drive savings. A great example here is Sales & Operations planning (s&op).  If you cannot properly model demand, inventory, or capacity, then you cannot make decisions about any of them.

3) Easy to Use: “Lightweight” sounds like something easier to use.

Beware: It may be a simpler application, but it may be harder to get business results. If the software does not do the analysis required because it cannot be configured properly, then the user has to figure things out using something else (back to the spreadsheet)—the old spreadsheet is easy to use, but it makes the job harder to do.

4) Fast to implement: “lightweight” is easy to implement, typically because there is not a lot to implement.

Beware: Better measures would be the time to get the initial business results, and time-to-payback on the software cost. Also, make sure to ask how the software configuration can be changed over time to continue to get additional savings and scale. It is much safer to implement limited functionality of a robust application than to figure out you came up short, later . Again, the ultimate lightweight planning tool is a spreadsheet, but it won’t grow with your business.

The bottom line is that most businesses are already running the most popular “lightweight” planning tool out there and it is called a Spreadsheet. It is inexpensive, it runs fast, its easy to use, and fast to implement. But can you run an enterprise on it? Use the above criteria to get away from the marketing buzz and figure out the best software for you and your business.

Here is another blog posting that you may be interested in: Are You Still Using Spreadsheets To Plan Your Supply Chain?

 

Kameron Hadavi

About the Author:  Kameron Hadavi is the Vice President of Marketing & Alliances at Adexa, for more information about him please click here.

Topics: Supply Chain Planning, Light, Sales & Operations Planning, Lightweight, Systems