‘Best-of-breed’ or ‘Best-of-suite’ for Supply Chain Transformation?

These days, many of our clients are transitioning from isolated supply chain tools to advanced networks and integrated planning. There are potentially huge benefits in the horizon.

“Which system should we choose?” That’s probably the most common question I get right now whenever I talk to companies about core solutions and, within that conversation, how new technology can support Digital Supply Chain Transformation towards creating increased transparency, building resilience, and allow for real-time scenario analysis to mitigate risks.
It’s not necessarily an easy question. Choosing between various technologies is a complex decision, often made from a large number of factors such as price, scope, performance, integration and ambitions within the organization – as well as the overall strategic fit.

A strong business case

Taking a helicopter view on Nordic companies right now, it’s no surprise that supply chain continues to be on everyone’s lips following the hard-learned lessons over previous years such as on-going conflicts and wars, natural disasters, geopolitical trade wars and the covid-19 pandemic etc. It is only when prices are inflated, supermarket shelves are empty or important consumer goods come with major delays that the general media shows interest. But behind the scenes, many companies are fighting difficult battles to make sure that their supply chains are not disrupted, and that all vulnerabilities are handled. Therefor building resilience becomes essential to undertake the ‘new normal’.

In this business environment, it’s vital to adapt and search for technology that can support a new operating model. In particular, many companies are inquiring about four specific technologies right now: SAP IBP, Kinaxis, OMP and Blue Yonder – technologies that we are very familiar with at Deloitte:

1. Starting with SAP, my home turf, SAP Integrated Business Planning (IBP) is now a vital part of many of the S/4HANA transformations that are taking place right now across the Nordics. IBP is a strong cloud-based solution that combines sales and operations planning (S&OP), forecasting and demand, response and supply, demand-driven replenishment, and inventory planning – all powered by SAP HANA in-memory technology. For those companies already running SAP as their core solution, IBP undoubtedly offers many opportunities for real-time analysis and strategic scenario planning, all in one system.
2. Many companies also consider Kinaxis, a mature solution, which is suitable for both aggregated strategic planning and detailed, operational planning. The Maestro platform is an end-to-end AI-infused supply chain orchestration platform, which enables full transparency and agility. Moreover, with a web-based front-end, Kinaxis can be accessed from any device, and the system will update instantly with any change happening anywhere in the supply chain, which makes it very fit for concurrent planning and responsiveness to external impacts in our ‘new normal’ business environment.
3. OMP is a cloud-based planning solution to look towards for reality-based modeling. Focusing on manufacturing industries especially pharma companies, OMP are tackling complex operational supply chain challenges that require advanced models and solvers. Accelerated by mature industry specific templates they build on strong experience and track records.
4. And lastly, many companies are inquiring about Blue Yonder, which is also part of Gartner’s Magic Quadrant along with Kinaxis and OMP. Blue Yonder is somewhat a fusion of the former i2 and Manugistics as well as other systems that are now part of the Blue Yonder brand. The system offers a variety of options, especially in the retail space where it enables planning capability from the aggregated level all the way down to the individual store.
    

Many factors to consider

Deloitte, being the market leaders in the supply chain space, are approached by more and more companies that ask us to support them in their system selection. We are thrilled to see such high ambitions in the supply chain area coupled with a general willingness to use the current volatile business climate to make some fundamental changes to the operating model.

There are of course many ways for us to support this process. Evaluating the processes in scope is an obvious place to start. So is assessing performance, especially with large quantities of data, as well as assessing options for integration, which can be a major decision point, especially for companies that are already experienced with running for example SAP solutions. User experience is also an important feature, because some systems have a web interface, others run on Excel, just as the various systems have a very different look and feel.

But there are more things to consider: The ecosystem surrounding the solution is important because most companies need help installing and maintaining the system. Can you team up with partners locally, or do you need international resources, and if so, are there any red flags or constraints in that? Safety requirements for e.g. data centre locations are typically also part of the evaluation, although the large provides will all meet very high demands – if they didn’t, they wouldn’t be in the market. And of course, the majority of our clients expect 24/7 support with global coverage, which is also becoming the industry standard for all major systems. All these things must be evaluated against the price and other commercial conditions.

And then there is the overall decision of choosing ‘best-of-breed’ based on specific challenges – or choosing ‘best-of-suite’ from a broad assessment of functionality and strategic fit.
 

As always with technology, there is rarely a solution that can fulfil every desire on all levels and within all realms of supply chain; however, it is also clear that digital technology such as AI solutions has taken leaps over the last few years, offering companies many new paths towards greater transparency, efficiency, and control, especially within Digital Supply Chain Transformation.

For many of our clients the journey towards integrated business planning has already started – but for many others, the business case hasn’t emerged until recent years, and there are still many decisions to be made on both the strategic and tactical level. It’s in no one’s interest to treat just symptoms, but instead addressing the actual root causes of the challenges that need to be solved, and from then design a fast decision-driven, technology-enabled operating model that is fit for the digital future.