How to select supply chain planning software: six things Martijn Lofvers says most companies get wrong

About Martijn Lofvers

CEO of Supply Chain Media, publisher of Supply Chain Movement and creator of the IT Subway Map, which charts around 100 supply chain software vendors. He studied operational research at Eindhoven University of Technology and has analysed close to 300 European supply chain start-ups since 2018. Listen to the episode.

Both sides of a selection

Few people see both sides of a planning software selection. Martijn Lofvers does: the vendors, whom he maps on the IT Subway Map, and the supply chain directors, whom he talks to every week. His verdict on how most companies choose is blunt. They start in the wrong place, ask the wrong questions, and take too long.

Here are the six things he says to fix, in the order a selection runs.

1. Know what you already have before you look at what's on offer

The first problem is not the market. It is the company's own portfolio.

"Most companies don't have a clear overview of what they have and what they need for the end-to-end supply chain," Martijn says. He recalls asking a VP of supply chain planning at a well-known multinational whether he had an overview of the IT that runs his supply chain. "Yes, we have it. But the IT department has it on a huge A0 poster with all the APIs and connections. It's spaghetti." And the VP, who chooses the tools, didn't have it himself.

Start with the map: which process is covered by which system, where the white spots are. Martijn built a 90-question self-assessment with Henkel, Unilever, HP and others for exactly this: ten process boxes upstream, ten internal, ten downstream, at operational, tactical and strategic level. The output is a list of gaps, which is also the answer to IT's favourite objection, that the business doesn't know what it wants.

2. The Magic Quadrant is not a shortlist

"The Magic Quadrants were never meant to be used for software selections, although worldwide they are misused for that purpose," Martijn says. "Even if you look at the small letters in all the documents, it's stated like that."

His explanation, from years of talking to Gartner analysts: the quadrant was designed to benchmark vendors against each other, not to tell a buyer which vendor fits them. Yet the common practice is to take the upper right corner, call it the shortlist, and stop looking. The result is a selection run on vendor size and completeness of vision, not on fit with your business.

What replaces it: the gap list from step one, demos as early as possible, and conversations with practitioners who have implemented the candidates. "Get out of your own company bubble."

3. Take the decision away from IT

IT wants a simple landscape, and the simplest landscape is "do it all in the ERP". Martijn's reply: "We all know that ERP is not suited for supply chain planning. Most companies don't use the MRP in their ERP environment."

The companies he calls the front runners carved planning out of the ERP years ago and put it on a data layer that any planning application can read from and write back to; he names Henkel, from 2013, and Heineken. "They have taken all the planning functionality out of their ERP environment."

The point is not to fight IT. It is who owns the requirement. "You have to take the reins as a supply chain practitioner. We are the ones determining what we need, because we are creating the business, not IT."

4. Write an RFP that asks about implementation

"When companies create an RFP, 80% of the questions are around functionality," Martijn says. "They hardly take into account questions about implementation. Will you do the implementation yourself, or do you have partners? How many consultants do you have? How many times have you done it, in which industries?"

That matters because implementation, not functionality, is where planning projects fail: the change in operating model, the training, the decisions about how to plan. Software vendors rarely bring change management; system integrators do. If you don't ask, you find out after signing.

On cost, his advice is simple: ask for references and ask them what it cost. "The ones who are willing to give references on implementation time and costs, those are the ones you can trust."

5. Choose an 80% fit now over a 100% fit in three years

"Implementing tools globally can take years. Nowadays the world is changing so rapidly, you cannot plan three, four, five years ahead," Martijn says. "You can aim for 100% functionality fit, but I think that's wrong. It would be better to have an 80% fit within months than a 100% fit in years."

He extends the same logic to the selection itself. "Selection taking a year? That's nonsense. The world will be changing in a year. Look at the tariffs."

This is also where he sees the newer vendors win. "Functionality-wise, I don't see any difference between the bigger players and the newcomers. These big software providers have a lot of functionality. Let's get real: how much of it is being used in practice?" The newer ones are cloud-native, implement themselves, and focus on what a company will actually use.

6. Sell it to the CFO on working capital, not headcount

The business case is where Martijn says most supply chain teams lose the room.

"How many planners can we save? That's the wrong angle. The magic word is: with this application, I can carve out 100 million euros of working capital, or 10 million, depending on your company. Dear CFO, I can carve out 100 million euros of working capital. And then they will listen."

And beyond working capital, growth. "Supply chain should be a business function to enable growth. These questions, sorry to say, are very defensive. Be offensive."

Your next steps

• Draw your own map of which system covers which planning process, and mark the white spots. Don't ask IT for the poster.
• Drop the Magic Quadrant as a shortlist. Build the shortlist from your gaps and from practitioners who have implemented the candidates.
• Rewrite the RFP so at least a third of it is about implementation: who does it, how often they have done it, in which industries, and what the references paid.
• Set a decision deadline measured in months, and judge candidates on the fit you can run this year.
• Write the business case in working capital and growth, and leave headcount out of it.

And one more from Martijn, for the start of any selection: "Get out of your own company bubble." Speak to practitioners who have done it before you speak to vendors.