Solvoyo Blog

How Important Are What-If Analysis Capabilities When Selecting SCM Software?

Aug 6, 2015 12:26:00 PM
Yu-Cheng Shen, PhD
Written by Yu-Cheng Shen, PhD
Vice President, Customer Operations

Sticky_QuestionsWhen it comes to supply chain management (SCM) software, having the ability to do what-if analysis is a critical requirement for making good business decisions. What-if analysis allows users to explore multiple scenario options, compare outcomes of different alternatives and ultimately make better supply chain decisions. So important is this capability that it’s not an overstatement to say that your SCM software is only as good as the what-if analysis it can support.

Unfortunately, most buyers of SCM software focus on what the software itself can do and pay little attention to the what-if analysis capabilities of the software. No other functionality can test the agility or the robustness of an SCM software as does what-if analysis. Even though most SCM software does provide some what-if analysis capabilities, the available functionality of this analytic tool differs significantly from product to product. Users of SCM software should therefore pay close attention to the what-if analysis capabilities of a software.

To help evaluate software platforms that give you the widest range of potentialities to support meaningful what-if analysis, here’s what to look for:

  • Can users create the scenarios on the fly? Your software should allow authorized users to create their own what-if scenarios without relying on IT. IT departments rarely have the time and patience to build multiple test scenarios even though scenario testings have been shown to significantly improve users’ analysis capabilities and decision making.
  • Can users compare scenarios easily? What-if scenarios are most valuable when they can be compared to one another. Comparing scenarios – for example, one for a change in selling prices and one for a change in both selling price and a reduction in production capacity – allows users to identify profitable customers and items. Your analysis tool should also support comparisons for more than two scenarios.
  • Are the relationships between what-if scenarios clearly displayed? Typically, what-if scenarios are often derived from another scenario and as this chain of inter-related scenarios increases, the relationship among these what-if analyses need to be clearly and graphically established. As the number of scenarios created increases, the SCM software must make it easy for the user to navigate all these what-if scenarios.
  • Can users easily see the differences between the changes to the scenarios? To show the results comparisons is good, but to see the input change to the compared scenarios is far better. If users can’t see the differences, they won’t easily understand what the results comparisons are meant to be.
  • Does the storage requirement remain fairly static? Many users with different functional needs use an enterprise-wide business application like SCM software, and the volume of data used by the application can be significant. Some software requires that the systems duplicate the database for each scenario, resulting in huge data storage requirements. Look for a platform that doesn’t duplicate the database to help ensure that you won’t experience a reduction in system performance.
  • Are the what-if scenarios easy to maintain? While users should be able to create new what-if scenarios, as time goes by the system will be flooded with many scenario configurations. Because of that, users should be able to easily: 
    • search for a particular scenario using simple search criteria.
    • delete unwanted scenarios, either manually or by a system purge routine.
    • simplify the view of existing scenarios so they see only the primary scenarios rather than all the scenarios accumulated over time.

Solvoyo understands the importance of what-if analysis tools for supply chain managers – in fact, we dedicate a significant amount of resources to developing a platform that supports the next generation of what-if analysis. By coupling our unparalleled cloud-based optimization engine with a robust what-if analysis tool, we provide users with a dynamic platform that helps them make better strategic, tactical, and operational supply chain decisions.

If your what-if analysis tool falls short of your expectations, contact us for a demo. Remember, your SCM software is only as good as the what-if analysis it provides!

 

Topics: Supply Chain Planning, What-if Analysis