The solution to better supply chain planning

The solution to better supply chain planning

Jackie Shelton, RVP UK at Anaplan explores how organisations can simplify their supply chains at a time when Brexit and wider economic issues are causing growing uncertainty

Change and uncertainty are the buzzwords of the times for supply chains across industries, but far too often, supply chain management leaders make decisions in a data vacuum, which doesn’t work in today’s fast-paced market. With growing uncertainty surrounding evolving trade barriers, Brexit and wider economic issues, supply chain leaders need to make timely, value-based decisions so they can respond quickly to shifts in demand and customer needs.

 

The inability to dynamically adjust and execute plans in response to fluctuating market conditions is a common barrier to streamlining supply chain planning and operations, but as supply chain processes become ever-more complicated at the same time, simplifying them is key to efficient growth.

 

As such, the ability to sense shifts in demand and to respond on a near-real-time basis is critical and this ability requires next-generation technologies that connect data with people. There is a growing awareness that planning is crucial to achieving business goals. That said, traditional planning approaches have become redundant, unable to respond quickly enough to market demands. The development of new technologies has thus allowed planning to become truly connected.

 

Moving to the cloud in times of uncertainty

 

There is continued pressure on supply chain organisations from all angles, whether that’s to cut greenhouse emissions, or keep pace with technological disruption. These demands place a premium on effective connected planning and the ability to change and adapt plans quickly. Businesses cannot afford to have siloed sections of their global supply chain and as such, supply chain organisations that implement agile planning solutions can better manage and quickly respond to these consistently fluctuating pressures.

 

Most organisations are handcuffed though, unable to act responsively and dynamically because they are lumbered with legacy systems that are still constrained by their on-premise heritage. At the pace that the modern supply chain needs to be able to adjust, these organisations should be operating in the cloud with solutions that were “born online” rather than trying to force those cumbersome legacy systems to be something they’re not. The cloud allows stakeholders across the business to get real time insight into what is happening on the ground – whether that’s the progress of a supplier, customer demand or the performance of different product types.

 

Utilising new and innovative technologies 

 

There is no doubt that technology is critical to the health and competitiveness of a business. And it’s no wonder our recent State of Connected Planning study showed that 92% of businesses believe improved planning technology would provide better business outcomes. But, while 82% of executives in the study said that their organisation needs to plan more frequently than they did five years ago, only 23% feel equipped to incorporate market changes into their plans within a few days. Yet, at the same time, widespread globalisation, fluid economies, emerging technologies, and fluctuating consumer demands make unexpected events and evolving business models the normal course of business today.

 

History-based forecasting is currently the primary solution used to drive supply chain planning, but artificial intelligence (AI) and machine learning (ML) could soon change that forever. Businesses should consider adopting and using advanced analytics over the coming years, which includes predictive analytics and spans to AI and ML. Such technologies will play a key role in the future of supply chain operations and have a transformative effect on other business processes. AI and ML based predictive models have the potential to transform processes like demand sensing, shaping, and orchestration, as well as supply planning. For example, ML can assist planners in exploring various potential scenarios by developing and testing a broad range of possible outcomes. As such, businesses can better evaluate the effects of fluctuating business influences – as well as uncover the sequence of events that would ultimately produce each outcome. For instance, a manufacturer could use predictive analytics to help map out the impact of different Brexit outcomes on its supply chain. What if there’s no deal? What if my suppliers face delays crossing the border? And how do I mitigate against rises in costs and make reductions across my supply chain?

 

Using advanced analytics technology may help produce more accurate forecasts based on current internal and external risk factors. While conventional planning models are generally static, only changing as and when people realise a change needs to be made, adding advanced analytics into the mix can transform planning across all industries. By the time a planner is able to identify, plan and respond to external events, it’s often too late and the next problem has already started to surface, locking you into a downward spiral. By integrating advanced analytics such as ML into a platform, planners may be able to dramatically reduce the time to decision making by more quickly identifying potential disruptions and better forecasting the impact on the wider business. Planners can additionally use AI to correlate external data from sources like social media, weather forecasts and news to track and predict disruptions at break-neck speed.

 

Advanced analytics will also begin having a number of other added benefits including enabling the ability to drive dynamic pricing, and new-product introductions will better incorporate predictive market intelligence. Advanced analytics will also drive new models for product promotions management, as well as responses to disruptions in the supply chain.

 

Taking a more collaborative approach

 

One crucial barrier to achieving connected planning that will have to be addressed by businesses in 2018 is the functional silos that they are currently operating in – from finance, to IT to supply chain and sales. Organisations need to think more holistically when it comes to planning and be more connected in their outlook. Recognising the need to take a more collaborative approach is crucial for success.

 

For example, supply chain networks for many enterprises are no longer linear, but are often sprawling, complicated global spiderwebs of organisations and stakeholders. Part of the problem is that the solutions that are being used to manage these networks were designed for old supply frameworks. If a supply framework changes, the solution being used has to change with it. Otherwise the team can’t properly predict and plan for changes. More importantly, the people working on the front line do not have the power to adapt their supply chain planning models to what they need without involving the IT team or even worse, expensive third party experts. Putting planning tools in their hands will be key for success in 2018, both in the supply chain and across the wider business.

 

Ultimately, implementing and utilising better planning technology solutions, whether it be in the form of advanced analytics, the cloud, or new working processes, can produce significantly better business outcomes. Connected Planning in particular, gives businesses a platform that enables dynamic, collaborative and intelligent planning.