Two major applications suppliers have been at work on new products for the sales and operations planning process.
SAP AG has launched a program to develop a new sales & operations planning (S&OP) application that will leverage the company's NetWeaver technologies and Enterprise Services Architecture to support business processes that cross functional boundaries.
Meanwhile, Cognos last month introduced what it calls a Sales and Operations Planning Blueprint. In Cognos's parlance, a blueprint is a pre-defined data, process, and policy model based on best practices in enterprise planning and financial management and control. The S&OP blueprint will provide planning, metrics, and reporting capabilities.
Paul Hoy, Cognos's director of manufacturing industry solutions, said in an interview that the blueprint will reconcile sales and demand planning with production planning and constraints, and will allow management to make decisions based on tradeoffs among manufacturing, purchasing, operations, finance, sales, and marketing.
In an interview at SAP's Sapphire user conference in Orlando, Ray Homan, SAP's high tech industry business unit vice president, said SAP hopes to fill some of the functional gaps that are not addressed by current applications, including the company's S&OP product, which is part of its Advanced Planning and Optimization suite.
"There are a lot of business challenges that so far haven't been addressed, mainly around supporting processes that transcend business silos," Homan says.
The new SAP S&OP application will be created as an xApp, SAP's nomenclature for a composite application that takes advantage of the company's service-oriented architecture. To date, many xApps have been developed by business partners and certified by SAP. In this case, however, SAP decided to build its own S&OP xApp because, Homan says, the company has been unable to find a partner with a sufficiently robust S&OP product on which to build an xApp.
"We haven't found an application company that has an S&OP application that is of interest in our industry," Homan says. "Most of them seem to be collaborative planning tools more than S&OP applications."
A recent study by AMR Research (Boston) confirmed SAP's conclusions. The study, which evaluated S&OP products from 22 vendors, found that none offered the complete set of analytical, optimization, and collaboration functionality required by manufacturing companies today. The study, for example, found that SAP's S&OP offering, while providing optimization capabilities, lacks analytics and analytics tied to dashboards, scorecards, and reporting tools.
SAP's Homan says the company is currently working with manufacturing customers to define required S&OP processes and integration points. SAP is also defining common services that would be required by an S&OP xApp. SAP plans to publish those services this summer.
No target delivery date for the SAP S&OP xApp has been determined, however, according to Homan.
This article originally appeared in the July 2006 issue of Managing Automation magazine.