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E2open—An Unexpected S&OP Player: Part One

Written By: Predrag Jakovljevic
Published On: May 2 2014

Cloud software solutions provider E2open usually gets associated with the words “cloud,” “on-demand,” “supply chain management,” “supply chain visibility,” “collaborative execution,” “trading networks,” and so on. Indeed, E2open is known for enabling enterprises to procure, manufacture, sell, and distribute products more efficiently through collaborative execution across global trading networks, using real-time information, integrated business processes, and advanced analytics. The list of the vendor’s well-known customers includes Avnet, Celestica, Cisco, Dell, HGST, HP, IBM, Lenovo, L’Oréal, LSI, Motorola Solutions, Radisys, Seagate, and Vodafone.
But E2open has not generally been known for its sales and operations planning (S&OP) capabilities. But the software provider deserves a second look for those in need of S&OP, as its product lineage for S&OP aligns with its support of end-to-end supply chain management (SCM), providing a product suite suitable for product companies that depend on collaboration with customers, suppliers, and distributors. E2open also enables integration of internal and partner stakeholders with E2 Cloud Connectivity. The critical aspect here is to add confidence to the underlying data and assumptions that feed into the overall S&OP plan. And because S&OP is about managing a business, E2open puts the data into the context of multi-tier business processes across the extended enterprise with E2 Process Management. A major part of S&OP is analytics, and to that end, E2open provides historical, real-time, predictive, and prescriptive analysis with E2 Analytics.
With the acquisition of icon-scm in the summer of 2013, E2open accelerated its roadmap for supply chain planning and now has a rich suite of network planning capabilities in its E2 Planning & Response products. Having these critical capabilities on a single platform cuts out latency and integration needs and provides all parties involved their own perspective on the go-forward plan and related actions.
E2open S&OP Overview
The point that many vendors seem to be missing with their pursuit of S&OP maturation is that S&OP is a process and not just a mere technology. Brand owners and their partners have cobbled together a host of best-of-breed demand planning, financial planning, and forecasting software. This has created fragmentation, given that each of these point solutions is typically robust and capable only in its functional role. In contrast, E2open provides a collaborative platform to facilitate the S&OP process. The vendor’s four-step blueprint to collaborative S&OP is as follows: 1) Integrate, 2) Plan, 3) Align, and 4) Execute.

Step 1—Integrate
S&OP is really about people collaborating to execute and course correct plans to achieve departmental, corporate, and trading partner goals. The objective of enabling S&OP is to empower people, and not simply automate processes. To be successful as a S&OP solution vendor, it is important to recognize that for most companies, their S&OP process is either immature or does not yet exist.
E2open provides a collaborative platform for integrating people within the enterprise; typically supply chain or operations as well as commercial (typically sales and marketing), finance, and executives. The vendor is an expert in enabling integration of trading partners: manufacturers and distributors on the supply side, and distributors and customers on the demand side. The key is enabling participating departments, suppliers, distributors, and customers with any-to-any cloud-based connectivity options, including machine-to-machine (M2M) and business-to-business (B2B), such as electronic data interchange (EDI), browser access, Excel Lite Client, and more. With a common collaborative platform, information can be shared in near real time in a one-to-one, one-to-many, and many-to-many fashion, creating a single version of the truth for all stakeholders participating in S&OP.

Step 2—Plan
E2open enables planning for demand-driven supply optimization with the unique ability to match granular demand with granular, and often constrained, supply and capacity. The process begins with the demand plan, which is important to S&OP, but its use is sub-optimal when used only at an aggregate level. E2open takes the granular product level plan along with all of its higher level attributes like region, customer tiering, margin information, etc. Next, it allocates available supply on any level to demand using flexible priority schemes, taking into account all available demand attributes. This demand-driven allocation will ensure that the most important demand is being serviced by constrained supply (see Figures 1 and 2).
E2open includes forecast consumption considerations as orders are placed, and manages the interplay of new and committed forecast portions with actual sales orders to automate strategic and tactical allocations. With this rules-driven demand prioritization in-product, the solution enables planning optimization that aligns with corporate, brand, customer, or other user-defined priorities.

Figure 1 - Demand Commitment (click for larger images)


Figure 2 - Inventory Projection
E2open enables “what-if” planning scenarios, providing rapid in-memory comparison of multiple plan versions (see Figure 3). The planner can choose among alternative outcomes for recommendation to the S&OP team. Key is that this gets demand and supply on the same page and the “best” customers are put front and center based on the business strategy. With E2open the planner gains the benefit of greater insight into what is driving demand at all nodes in the supply chain, so as new supply or capacity investment decisions are made it is understood what type of demand is driving the need. And vice versa; if certain demand is being gated from being fulfilled it’s possible to pinpoint the bottleneck.

Figure 3 - Scenario Comparison
Step 3—Align
One of the great challenges in getting S&OP to work is gaining agreement among stakeholders, then testing feasibility of proposed plans and modifying those plans collaboratively in a timely fashion. Because of the time lag associated with manual and serial sharing and analysis, the process can often take so much time that another S&OP meeting arrives before plans from the previous one are vetted and executed. E2open’s collaborative platform enables S&OP teams to collapse planning time, base optimization on defined priorities, and simplify feasibility testing and plan modifications.
The E2open collaborative S&OP platform includes a critical enabling layer: collaboration. It enables the S&OP team to take plans agreed upon in meetings and test feasibility among enterprise departments and with suppliers and customers. With a more granular view of supply and/or demand, constraints based on capacity and supply can be identified, what-if analyses performed, and outcomes evaluated among stakeholders for modification to the master operational and impact on financial and commercial plans.
Step 4—Execute
Once the S&OP stakeholders agree to a plan of record, this operational plan can be approved and executed within E2open and synchronized with the internal and external systems of records—so no more swivel chair, manual movement of plans among systems with the inherent errors and latency of data transfer and entry. E2open not only plays the role of system of processes, it also enables integration and plan updates as in a standard system of record: enterprise resource planning (ERP), e.g., SAP or Oracle. Now the operational, financial, and commercial plans can be in sync so that all teams work together to achieve common corporate objectives.
To help ensure continuous course corrections toward those goals, E2open provides another enabling layer of “evaluation.” E2open S&OP includes analytics for historical, current, predicted, and targeted key performance indicators (KPIs). These are accessible across departments and the network, as permission is granted by the brand owner’s departments, suppliers, and customers (see Figures 4 and 5).

Figure 4 - Heat Map, Revenue Shipped by Product Weekly

Figure 5 - Supply Chain Cockpit
We also talked to E2open vice president of product marketing Sean Rollings about his opinions about the S&OP market and E2open’s S&OP strategy. Read our Q&A with Rollings
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