It is surprising that many companies, big or small, spend hundreds of thousands of dollars on automation of their execution systems without having an automated system that can guide the execution. Software Advice research team just published an article that analyzed 200 prospective supply chain management (SCM) software buyers and found small businesses are willing to spend an average of $30,000 on new SCM software compared to $170,000 by mid to large size businesses.  However they continue to use a simple spreadsheet for the "brains" of their operation needed to plan and coordinate millions of dollars of their assets in their operations. This practice generally leads to excess inventory or shortages, higher cost of operations, undesirable delivery performance and loss of customers and market share for not responding fast enough. To this end, automation of execution systems, by itself, will not save companies much money unless the planning is done correctly, so that making and storing the wrong stuff is avoided and more importantly the users have visibility into what can be made and delivered in real-time. In order to be able to do real-time Available-To-Promise, there needs to be a centralized and integrated planning system connecting demand information to operations to suppliers--A process commonly referred to as Sales & Operation Planning. Through the automation of this process, one can generate plans which are consistent with the demand and send the right signals, in a timely manner, to the suppliers as well as adjust the inventory levels at every level of the supply chain. The result would be a lower cost of operation, much improved delivery performance and visibility into every aspect of the supply chain. As you can see Supply Chain plans can be generated only if the system has modeling capability. In other words building models of the real world in terms of capacity, supplier/subcontractor capability, BOM and routing data as well as delivery lead-times and operator and equipment capability. With such complex models systems can predict what can be made and when; and more importantly what mix of products to be made so that the demand is met at the lowest cost of operations and inventory levels. Execution systems, such as ERP, WMS, TL, MES etc do not have modeling capability and are only transaction oriented.

So, before automating all the "execution" processes, consider the brain of the operations. It can tell you what data should be collected and how often, whether the data is correct or not, and it will make sure that the different arms of the execution are working in sync with one another (i.e. delivery, production, storage, transportation). In our experience, many users who start a supply chain planning project, do not have good or complete data in order to make adequate planning decisions. Systems can help you to define what is needed and frequency of data collection, the details of data that is needed so that there is a purpose for every piece of data that is collected. They also reinforce the discipline of ensuring every piece of data is correct and consistent as the operations change. Examples of the latter are new product introduction, and supplier, equipment or sub-contractor changes. The planning systems can and will detect any missing or incorrect data such as BOM or routings, equipment availability, supplier lead-times and so on. But more importantly, save money in cost of operations with a much higher delivery performance.