JDA Software Group, which sells enterprise supply chain solutions, and Oliver Wight, a global supply chain consulting firm, are jointly releasing a sales and operations planning solution that can be used by retailers.
The companies announced their strategic partnership June 30.
"Traditionally, S&OP technology is aimed at manufacturers who want to balance supply capacity with demand," said David Johnston, senior vice president of supply chain for JDA. "For retailers, merchandise planning is the closest thing they do to S&OP. There is a big disconnect between how planning gets executed and the operational plan."
Rather than just providing a way of balancing capacity with fulfillment and demand, Johnston said the new S&OP solution ensures a retailer's operational plan aligns with DC (distribution center) capacity, available carrier lanes, expected revenue and margin targets, and the overall strategic plan.
Dennis Groves, chairman of Oliver Wight Americas, said the scope of S&OP has expanded from supply and demand execution to integrated business management over the past 30 years.
"It includes product portfolio management, client demand management, financial management, and executive management, driven from a company's strategic plan," he said. "S&OP is designed to get a company one set of plans from which everyone can execute."
Johnston said the solution can help retailers manage the flow of products around seasonal peaks and high promotion periods.
"It gives you the right visibility and planning data," he said. "You can secure external and internal carrier capacity, as well as the right labor in the DC and the right shelf space in the store, during times in the year when you just can't follow a -just in time' methodology."
Tim Payne, an analyst with Gartner, said S&OP is often not even called S&OP in the retail industry, reflecting that it is less established with retailers than with manufacturers.
"However, as a business process, it makes great sense for any organization that has to balance supply and demand," Payne said. "Any initiative that helps to make this more doable is a good thing for companies."
Payne said S&OP is evolving into a methodology he calls IBP (integrated business planning).
"This brings in more strategic alignment and adds more capability in the area of financial impact analysis," he said. "JDA and Oliver Wight would need to figure out how the solutions need to develop in order to deliver more IBP capabilities in the future."
As part of the agreement, JDA will incorporate Oliver Wight's methodology and consulting processes into its software solution offering to increase the overall performance of its S&OP solutions. Oliver Wight will also participate in and provide counsel to JDA's Business Requirements Group for S&OP and will collaborate directly with JDA's Product Management and Development Groups.
Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com's Retail Site.