The FDs we speak with are often, and unsurprisingly, worried that planning and scheduling software will be too expensive to show a quick enough Return on Investment (ROI) to justify the cost. In the current climate, there’s increased pressure to deliver cost savings – and quickly. While it’s true that some investments can take a while to deliver a clear ROI, it doesn’t have to be this way. In fact, it’s not that way with our Advanced Planning and Scheduling (APS) software.
What’s the average timescale for ROI on our APS software?
Typically, the average is around 6 to 12 months, but some have been as short as a few weeks and others a couple of months.
We have one particularly impressive example where a customer got an immediate ROI as the software identified that they had 37 extra production staff. It cost them £925,000 for employing the 37 staff (approx. 37 x £25,000= £925,0000), and the system cost them £100,000 at the time.
Where do the financial savings come from to generate the ROI?
There are a few places the savings have come from:
- Reduction in both stock levels of inventory and WIP.
- Improvement in on-time in full deliveries and capability to promise.
- Reduction in the number of production shifts (one customer saved £500,000 by not having to produce on Saturday).
- Reduction in agency labour.
- Improvement in efficiency allows you to be more competitive in the marketplace and drive increased sales.
- Not having to throw away “out of date stock” or get visibility of at-risk stock and speak to their customers about concessions (taking stock with less shelf life).
Using software saves time and money, and accounts for human error. If you added up the amount of time spent correcting errors and fixing things when they’ve gone wrong, companies will soon discover how much money they’re actually spending.
How does the pricing structure for the software work?
There are benefits for software, especially as it’s far more effective than spreadsheets, and will be easier to manage.
The software pricing offers a number of different options that reflect the different ways in which companies operate.
For example, you can choose between:
- Out-of-the-box vs. fully configurable (i.e., as it comes or tweaked to how you want it); and
- Software licences vs. rolling subscription.
These all vary in cost and can range from £10k-70k for the Opcenter APS licences (perhaps a bit higher depending on how many planners need to have their own licences). By comparison, the subscription option is a third of the cost. With how modest the investment in software can be, there’s plenty of scope to recoup your initial investment as well as drive additional cost savings.
Want to implement a cost-saving measure that’ll deliver a clear and readily achievable ROI? Contact us today.