The strategic steps for a good SNP implementation are:
- Thorough business process mapping and matching requirements with the correct SNP functionality. There are different functionalities that might appear to solve the problem but choosing the right one is the key. E.g., whether to use heuristics over optimizers.
- Evaluate the scope of the implementation. A big bang or a gradual addition of functionality needs to be decided. E.g., planning can be done at a product level and can be later extended to an aggregate level or safety stock planning can be done using a simple method initially and later move on to Extended Safety Stock methods after extensive testing and collection of historical data. A gradual extension would mean lesser issues to tackle at a time.
- Master data is a very important issue that crops up in a lot of SNP implementations but never given enough preparation. A good master data management strategy needs to be established.
- Ensure the SNP functionality integrates with the other modules such as DP and PPDS and systems such as R/3 or external systems.
The tactical steps:
- Define procedures for business process oriented monitoring, error handling and escalation Management.
- Define the roles and responsibilities for all persons involved in the customers' support and monitoring organization with respect to supply network planning.
- List down expected teething issues based on the consultants previous experiences and steps that to counter these issues.
- Thorough testing in terms of unit testing as well as integration testing and using reasonable good data and analyzing the results to explain some of the solves are important in SNP.
- While the implementation is in progress, as a part of the change management process, it is a good idea to make sure that users realize planning results are tuned with time and feedback. A perfect plan is not going to happen on day one.
Post go-live and make a concerted effort to tackle issues. Prioritize the issues based on the criticality and irritability of the users to issues and come up with an action plan with time lines to treat it. End user acceptance would be based on how easy it makes their work and how precise the plans are and reduction in the planning cycle and the time taken for planning.
Management acceptance would be based usually on the return of investment. It would be a good idea to get some KPIs and performance levels in advance and compare them a few months after go-live and convert the changes in dollar amounts to impress the management. A simple measure would be reduced inventory due to better planning or better service levels.
SNP is a tool for the Distribution or Supply Planner and is a medium to long term planning tool but if you are looking for benefits to the production planners and schedulers who work on the short term plans the most important is that it gives them a better view of the resource requirements and material requirements. SNP capacity leveling and planning based on resources could help in smoothing the amount of work for the production planners. Also better procurement based on SNP plans can ensure that production planners do not have to worry much about material shortages.
This was first published in July 2007