Oracle IOP - An Integrated Approach to Sales & Operations Planning (S&OP)
It easy to turn cash into inventory, it’s becoming harder to turn it back into cash…
Today, more than ever, it is critical for companies to have the right products in the right place at the right time to achieve order fill rate objectives, quality objectives, and achieve the lowest material cost. At the same time, today’s economic pressures have increased management’s focus to maximize working capital and inventories without missing demand opportunities.
To accomplish this balance, management needs to be confident forecasts are accurate, achievable, and accountable by all S&OP planning stakeholders. They need a timely, concensus-based forecast that can be revised quickly, and shared by the team. At the same time, they know that all of this must be achieved while reducing the cost and time it takes to create and manage forecasts.
Today, most companies use a combination of systems, spreadsheets, and processes resulting in multiple versions of numbers and units measured in different ways - Finance, Sales, Operations, PLM, etc, Timely collaboration is difficult at best. However, leading companies are discovering that by leveraging an integrated S&OP system and processes, they are able increase forecast accuracy, reducing the time and cost in creating forecasts, while being flexible enough to meet changing business requirements. One such system (and one of Oracle’s best keep secrets) is called Oracle Integrated Operations Planning - or IOP for short.
The reason why IOP addresses today’s S&OP challenges is because it integrates directly with both Financial and Operational systems and offers a common integrated planning platform for collaboration where forecasts can be quickly and automatically be used by demand-side, supply-side and financial planning systems. This makes collaboration during the S&OP forecast creation easier so that consensus can be reached quickly.
The first questions that come up, is how is IOP different, or why do I need it if I’m already using Hyperion for planning, and/or Demantra for demand forecasting? The simple answer is this - IOP does not replace those products - in fact, both are superior for their respective task in financial and operations planning. What’s missing is the ability to use a common collaboration platform for a single source of truth that Sales, Finance and Operations can all have access and provide input to.
IOP has the ability to receive forecast input directly from forecast sources (internal and external customers), and automatically passes it to planning where it is reviewed and revised. When planning is finished revising the forecast, they approve it and automatically pass it to either and ERP or dedicated planning system.
The approved forecast is automatically made available to everyone involved in creating and maintaining the forecast. Selected individuals in the forecasting and planning process can configure the forecast parameters, assumptions, metrics, and approval process. IOP provides tools for routine and analytical reporting.
IOP uses a solution architecture designed around Oracle’s EPM, Supply Chain Planning, and the Business Intelligence Enteprise Edition platform, using open standard interfaces and tools.
Today - what CXO doesn’t want a rapid time to benefit?
The time to enter forecasts is dramatically reduced because forecast input comes directly from the source (internal and external customers). Forecast accuracy is improved by making it easier to enter the forecast and providing tools to measure forecast accuracy.
Everyone now has the tools they need to collaborate and to do extensive forecast and planning analysis and reporting. This results in having the right material at the right time to achieve maximum customer service levels at lower costs.
If you would like more information on Oracle’s IOP offering and ways to improve your S&OP processes, please feel free to send me an email.
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