Every Sales and Operations Planning success has a story, and one of the more interesting ones SCDigest has heard lately comes from Radisys, a leading provider of wireless infrastructure solutions for markets such as telecommunications, aerospace and defense, and health care.
Despite a relatively immature S&OP process and limited and problematic technology support, Radisys (Hillsboro, OR) was nevertheless getting along, until a decision in 2009 to outsource its manufacturing operations.
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 "We probably spend about 80% of our time now on the analytics, rather than basic tasks, which is a complete reversal from before," Aleman said.
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That according to Lisa Aleman, now director of S&OP at Radisys, on a recent Videocast from our Supply Chain Television Channel (see link to on-demand version of Building S&OP Shock Absorbers into Your Business broadcast below.)
What the company at the time did not fully understand, Aleman said, was "the level of visibility into supply that would be required to manage a fully outsourced supply chain" - and how more difficult that would be to achieve in an outsourced world versus in-house manufacturing.
After the move to outsourcing, the lack of that required visibility led to a scenario in which "even relatively simple decisions became rather difficult for the company," Aleman said. "Do I have enough supply? Do I have enough demand? Can I commit to certain orders? Can I respond to a customer in a rapid timeframe? All of those things were basically lost."
A big reason for that was the company was no longer operating on a single plan of record.
"The contract manufacturer had a plan of record for supply, Radisys had a plan of record for demand, and nowhere were those two things housed together," Aleman said.
Exacerbating the problem was that the company's demand planning software was an in-house tool that was "antiquated," with numerous limitations and problems. Those included only supporting serial inputs, so that multiple people could not update the system at the same time, numerous patches overtime such that the system was difficult to understand, frequent down time and more.
The result: a critical change in business and supply chain strategy expected to deliver lower costs was quickly swamped with problems, and became a lot more than just a supply chain problem, but rather a major company issue. Safety stocks that had been built to help buffer the switch to outsourcing were rapidly being drawn down.
"We were basically exposing supply gaps to our customer base," Aleman said.
Around that time, Aleman was brought in, and in early 2010 the team "took a step back, realizing we needed to put the right infrastructure in place so that we could have supply and demand all in one system," she said. "We wanted one collective plan with all the demand elements and all the supply elements together to get visibility."
And that of course had to include contract manufacturers, as they may be "running to a set of objectives and optimization schemes that may not be conducive to what Radisys' needs were," Aleman observed, adding that until a new set of automated tools were brought in the company couldn't really well see that dynamic.
There were also cycle mismatches. The in-house demand planning tool really would only enable Radisys to generate a monthly forecast, whereas the contract manufacturer was operating on a weekly "heart beat," and the company needed to commit to customers on daily basis.
Lisa Aleman Shares Radisys' Journey to S&OP Success on Recent Videocast
"It was almost the perfect storm," Aleman said.
New Process and Technology to the Rescue
Something had to change, and change quicky. Aleman and her team rapidly led the effort to find the right toolsets to support the capabilities they need to gain visibility, bring supply and demand together, generate the single plan of record, and more.
Those new capabilities would also allow Radisys to improve its S&OP process, which Aleman characterized at the time as being at a very low level of maturity when compare to a Gartner model for S&OP excellence.
(Supply Chain Trends and Issues Article - Continued Below)
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