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5 Reasons Execs Nix the Budget Request for SCP Software (and How to Change Their Minds)
If you lead a demand planning team, supply chain planning (SCP) software is a no-brainer. Do an exceptionally better job in a fraction of the time? Uh, yes please. Drive near-instant inventory reductions of 10% to 20% while improving customer service levels 3% to 7%? Duh.
Why wouldn’t you want SCP software, like yesterday? Unfortunately, the story is different to a CFO. When you get into the budget discussion, usually the hammer comes down for one reason or another. In these trying economic times, you need to go in with some ammo. We’ve got it right here.
Uncork the Bottlenecks
If you’ve hit a bottleneck in securing budget for an SCP solution – or anticipate static – let’s dissect the reasons for the bottleneck, along with strategies to uncork it.
Here are the 5 most common reasons why executives nix the budget request for SCP software, and some great responses to change their minds:
Bottleneck #1: Other Corporate Priorities
It’s pretty common (and easy) for the business to say, “We are prioritizing other corporate initiatives for the next few months. It’ll have to wait.” Or, “We’re going to do another project first.”
Response: Most executives don’t know that SCP is a fast-cash solution that often allows a company to use the savings to pay for other major tech initiatives like ERP or WMS. Here’s an article we did recently to explain this further:
There’s no point in waiting for the ERP or WMS project to finish because that takes too long! Blue Ridge’s rapid, predictable implementation process means those savings will be in the bank in less than 90 days, typically.
Our LifeLine Consultants handle all of the implementation details to accelerate your ROI, as well as ongoing monitoring to continually improve results with the system, year after year.
For the skeptics in your organization, we’re happy to put you in touch with customer references to validate it… Many Blue Ridge customers have been able to fast-track savings, and still focus on their other initiatives while implementation takes place. So the savings can be used right now – not 24 months from now.
Bottleneck #2: Due diligence
Sure, ok. This one makes sense. Sort of.
“The Executives want to do our due diligence and evaluate a few other vendors to make sure we pick the right partner.”
Response: The business is usually drawn to those big-brand names o’er Yonder. These vendors may have a big marketing budget and big clients carried over from heavy-hitter legacy products. Peel back the onion to see their true fit with supply chain planning, and you’ll find costly problems:
- Technical issues during implementation drag out ROI, unless you want to pay extra for consulting. Blue Ridge includes ongoing LifeLine monitoring and recommendations to mitigate risk over the lifetime of your solution.
- No domain expertise. This isn’t the neighborhood they grew up in. Blue Ridge knows our customers’ industries inside and out – which further reduces risk.
- Lack of integrated pricing. Not traditionally a functional solution offered by many SCP vendors, but now extremely important for surviving increased online competition, is Price Optimization. This feature is a key differentiation when evaluating SCP vendors, and your CFO needs to be made aware of the economic advantages behind it. Blue Ridge can furnish new decision criteria to use when evaluating other vendors to ensure apples are being compared to apples.
Bottleneck #3: Can’t Justify Cost
This bottleneck from your execs will often sound something like this: “Seems like a great solution, but we need to go with something less expensive, even if that means fewer features or less functionality.”
Response: The cheaper solution may (probably won’t) solve your problem today, but you will quickly outgrow it. Do you really want to do a supply chain evaluation process again in another year or two?
Go for a solution that is flexible and nimble enough to grow with your business and provide value for years to come. Our research shows that good SCP decisions are 10-year decisions. Will this cheap solution work for you in 10 years or 5 years? Or even 3, for that matter?
It’s worth hearing us out. Blue Ridge can share plenty of ROI examples of positive financial impact and long-term solution value experienced by our customers. With a retention rate of 98%, getting case studies and reference calls in front of your execs is never a problem for us.
Bottleneck #4: Our Existing Solution Will Do
Another one of our favorites… “How is this better than what we are already doing? Will it really give us a significant competitive advantage?”
Response: The answer to this really depends on your unique situation.
Most of the companies working with Blue Ridge initially came to us not even realizing how much capital they were tying up in inventory. Over the years, as supply chain uncertainty continued to pile on, they continued adding safety stock to chase the unpredictable. Before they knew it, they were leaving millions of dollars on the table annually. Unnecessarily.
So yes, a best-of-breed SCP software solution really can deliver significant financial advantages. As for how much, let’s talk about that.
Blue Ridge supply chain experts have been doing this for many years. We can create an accurate picture of what your company can save, then deliver a plan that will get your execs excited about opening the purse strings.
Bottleneck #5: The Timing Isn’t Right
When is it ever?
Even right now, people are actively looking at increasing technology capabilities to prepare for emergence from this pandemic and seismic societal disruption. Because it’s not if, but when it will happen again. Whether it’s hurricane season, another virus, political drama like tariffs and inflation, or something else, disruption will always require preparedness.
Response: Why wait? If you have metrics about how much money your current process wastes, and still doesn’t get the experience your customers expect, then isn’t NOW the perfect time to stop the bleeding and explore other options?
We work with a plumbing supply company that had $1 million dollars per day tied up in inventory. Every day they waited to optimize inventory, it was costing them more.
Blue Ridge’s SCP system allows them to plan better and mitigate risk from disruptions, including seasonality, so they can reduce operational costs, allocate inventory at peak efficiency, maximize working capital and assure product availability.