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S&OP for Competitive Advantage: Why ERP Alone Can’t Deliver

Adam Cavanagh
Published on:
May 27, 2021
Retailers need product, price and service level performance and it’s up to wholesalers to deliver. Those businesses with the best sales and operations planning (S&OP) processes are most likely to succeed in fulfilling the demands of their customers.

What’s behind good S&OP?

S&OP is an ongoing, cyclical process that requires interaction from across the business to ensure everyone is pulling in the same direction, based on the same plan. It incorporates demand planning, supply and demand balancing and inventory management sub-processes. 

The crucial elements behind effective S&OP are: 

  • A continuous, structured process.
  • The creation of a single set of integrated plans.
  • Constant interaction between sub-processes to avoid scenarios where for instance the sales function is running promotions that the rest of the team can’t deliver.
  • Ensuring a disciplined response to change, aligning the process cycle to the frequency of change – or rhythm – of the market. 
  • Accessible management information to support senior management in decision making and approval processes. 

What’s holding wholesalers back?

A reliance on ERP systems alone. 

They hold all the data and therefore connect seemingly disparate functions – admin, finance, HR, procurement, manufacturing, warehousing, sales, marketing and customer service. Sounds good, but beneath this basic function, the ERP systems provided limited support for optimisation. This is exacerbated when there is any volatility in supply and demand – as we’ve seen over the last 18 months. 

Ultimately, data holds the key, just not in its raw form. It needs to be translated into actionable information to unlock the potential benefits contained within the information. This is where an ERP system is insufficient – it cannot provide the depth of capability for the access, analysis and automation required to get the most from the data available. 

As a result, the team must:

  • Extract data from the system and manipulate it in spreadsheets
  • Build their own models to manage complex patterns of demand
  • Make manual replenishment decisions
  • Work to a cycle that can be managed with the tools at their disposal, reflecting their capability rather than the patterns of the market. 

The solution

The wholesalers who are still reliant on ERP systems alone, are not going to have the S&OP processes in place to come out on top in terms of fulfilling the demands of their customers. 

To formulate a set of interconnected plans for what to source, what to make and what to move – both when and how – requires access to a toolset that allows for an integrated function across your S&OP process. The AGR software acts as an add-on to existing ERP systems and provides tangible benefits:

Drive profitable decision making. With all teams operating from a single version of the truth in one data source, S&OP becomes a far more valuable exercise. Forecasts start to reflect the reality of the bigger picture of the market rather than siloed snapshots.

Cost reductions. Reduce warehouse space with streamlined stock levels; lower cost of service; increase sales; avoid fines for poor service level performance; free up human resources to either drive higher value activity or reduce headcount.

Risk analysis. Being able to identify vulnerabilities in the supply chain provides the insight required to take action and reinforce the weak points to reduce risk to the business. 

Opportunity identification. With more time and insight your business can move beyond just managing your stock processes to recognise larger opportunities to make lasting improvements to the service you provide your customers.

Release working capital. Without capital tied up in unnecessary overstocks your cash flow situation will see immediate benefits.

Let us show you the impact that the AGR software can have on your S&OP – get in touch today to see just how much of a competitive advantage it could give you.