A previous Supply Chain Matters commentary published in April, Prioritizing Applications Software and Technology Investments for the COVID-19 New Normal, called reader attention as to why the COVID-19 coronavirus pandemic has provided a shocking wake-up call for many businesses large and small, in attempting to manage, sustain and enhance business process and decision-making capabilities related to either product demand or supply.
This virus has exposed weak links, planning process shortcomings and the more agile and more scenario-based decision-making required for line-of-business and supply chain agility and resiliency needs.
The frequency of both business and supply chain changes are only going to increase because the cascading effects of this virus’s impacts on product demand and supporting supply networks. Further disruptions in subsequent tiers of your industry’s supply networks will continue to challenge businesses until some form of a new normal arrives.
In this environment, businesses run the added risk for struggling with disconnected applications systems and siloed information not presenting a consistent reality among cross- functional business teams as well as external partners. The need for integrated business planning is critical, as is the ability to analyze various decision scenarios, each presenting various constrained options. The notions that everyone is on the same page related to operational, tactical and what could be defined as strategic planning, has never been as important.
We advocated that enhanced supply chain, sales and operations (S&OP) or integrated planning process investments are likely to be the best candidates for surgical technology investments. Specially, consideration for the ability to consolidate key business financial, S&OP and resource needs within a singular decision-making framework, enabled with technology that enhances end-to-end supply chain visibility, more rapid decision making and flexible response, all with the ability to ascertain and contrast the impacts on specific business metrics such as COGS, inventory investment or customer service levels.
Financial Planning and Scenario Modeling
An Oracle published white paper published earlier this month argues that no one really knows what a post COVID-19 business environment would look like given the reality that no two industries or geographies experiencing the same reality or business conditions. The virus has made uncertainty and inherent element of short- and medium-term planning, and that planning predicated on specific targets, goals or assumptions must give way to planning for possible scenarios or likely outcomes.
From our lens, in such an environment, and similar to supply chain and S&OP planning processes, scenario planning and business outcome modeling are becoming essential for finance teams as well, in their needs to assess a wide array of outcomes or make highly iterative short- and medium-term forecasts for executive decision-making. Planning for business liquidity, customer retention, or seizing market share each imply different approaches and tradeoffs.
A crucial further consideration is that all teams are working with similar data, assumptions and business priorities. Risk analysis and scenarios predicated on confidence levels implies common context and assumptions among finance, supply chain, and other product management and operational teams.
Oracle’s Financial Statement Planning application was designed to assist financial planning teams and CFO’s perform detailed what-if scenarios for economic situations that are related to payment delays, inventory fluctuations or business liquidity analysis. Some of the information needed to generate such scenarios comes from or to supply chain or S&OP assumptions and decision-making process needs, for either input as well as subsequent information updates. The need is for all teams to be working with similar, integrated information including the thinking related to each scenario.
The information further needs to be easily accessible by designated individual managers and teams extracting, incorporating or updating scenario parameters. Oracle describes accessibility as digital connectivity via the Cloud, especially given the new norm of more planning and decision process workers working remotely.
Continuing with efforts to inform readers of complimentary offers being made by technology providers in the light of ongoing COVID-19 related business challenges, we can inform readers that Oracle is providing complimentary access to the Cloud based Oracle Financial Statement Planning application, including strategic modeling, to all existing Oracle Planning Cloud customers over the next 12 months, extending until April 30, 2021. This may be an opportunity to have your business teams working with more agile and integrated planning tools so consider informing your finance team colleagues.
Further information is outlined in a recent Oracle blog posting.
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