Big Data vs. Strategic S&OP: Opposite Sides of the Spectrum?

The trend on the topic of big data is everywhere. From the many blog posts, analyst reviews, conference topics, to the never ending popup on my TweetDeck. Big data is not the “next” big thing, but rather the “here and now” big thing. Companies are scrambling to understand what it means to them, how to define a structure to support it and how to leverage the data via analytics to actually have the data impact their business in a positive manner.

As Kelly Thomas pointed out in one of his recent blogs, “Big Data Meets the Supply Chain”, big data inherently means a lot of data…unsurpassed amounts of data. This also means very detailed, granular levels of detail. The bigger question going around is can the data be useful? Or, is enough of it useful to provide a positive impact in some function of the business from demand forecasting, supply chain, merchandising and assortment planning or new product introductions. The net of big data is that companies are continually looking to expand their business, grow profits and catapult away from their competition as well as mining the value that could be found in big data, which could mean big value.

So, in a corporate world of limitations…be it limited resources, limited capacity, internal project funding, etc., is big data the right place to put all of your efforts? Are we, as technology connoisseurs and supply chain professionals too quick to jump on to the latest trend while we still have not mastered, or even begun to tap into the power of other aspects of running the business?

For example, putting my Twitter cap on, the amount of posts about sales and operations planning (S&OP) are failing miserably to the postings of big data. Yet, companies are nowhere near their potential of extracting benefits from an effective S&OP process in manufacturing environments or ensuring that corporate wide strategies and goals are aligned across the entire organization in retail. Has the hype of strategic planning initiatives such as S&OP fallen to the wayside as we attempt new endevours into the abyss of data paralysis?

Don’t get me wrong. The excitement that big data brings to the industry and the value of being able to capture all of these types of data that were otherwise hidden to us presents such great opportunities. But I think we have to ensure that while digging deeper into an even deeper realm of data that we don’t push strategic initiatives onto the back burner. I also think that these concepts, spanning different ends of levels of detail and data processing, can most certainly complement each other if done right. The data collected from big data analysis could absolutely be incorporated and leveraged as part of a product, demand and financial review cycle within an executive S&OP process. Imagine being able to have immediate insight as to the adoption and customer sentiment of your latest product launch; now pull that data into your upcoming assumptions, risks and opportunities when completing your S&OP cycle. Talk about some real world, real-time information that can help you make better decisions – both short term and long term!

Where do you fall on the spectrum? Where are you going to hedge your bets this year? Are you looking at focusing on the strategic nature of running the business or capturing, harnessing, analyzing and leveraging the wealth of detailed information that exists in the big data universe? Or finding a way to tie it all together? I’d love to hear your thoughts!

  3 Comments   Comment

  1. Great post,

    having immediate insight in consumer sentiment I wrote about in my blog on social media and the supply chain.

    I now call it the emotional connection. Companies that will be first in making, reading and act on this connection will be the winners of the future

    It”s not about the big data. It”s about the focus in the big data. Hence I”m working on an application for this

    cheers,
    Niels

    Reply
    • Paula Natoli

      Hi Niels –

      Thanks very much for your feedback and information sharing. I like your notation of “emotional connection” which ties in nicely to ensure that the consumer sentiment can be connected back into supply chain. I think it is especially key that the focus lies in being able to turn the “data” into information that is truly actionable.

      Thanks!
      Paula

      Reply
  2. Amazing post.

    We here at Distinct Systems (Brazil) are working to combine S&OP and BIG DATA on a unique solution, providing sales forecast insights to our clients as well as external information on raw material costs, market moves and other relevant info to the decision makers.

    The results of having a more accurate sales forecast, based on Big Data analysis, are spread all over the company.

    Good to hear that we are not alone on this approach!

    Best Regards,

    Valério.

    Reply

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