While most modern organizations implement Advance Planning Systems (APS), many fail to align their planning results to organizational objectives.
This means organizations are not adequately leveraging the immense potential that APS offers to intelligently connect the entire supply chain using the right digital technologies. As supply chain digitization emerges as the new business mandate across industries, organizations need to enable seamless integration between internal departments and external stakeholders to ensure end-to-end visibility and flow of information. End-to-end connectivity further sets the foundation for automation, bringing in the agility required to respond to events in the supply chain by understanding their impact across the value ecosystem.
Supply chain visibility – The key value driver
According to a recent BCG report, enhanced supply chain visibility can increase the level of demand fulfillment by 4% to 6%. Automation enables visibility into changed demand or supply situation through easy to interpret dashboards that can be accessed over the web from anywhere, anytime, and on any device.
Automation-driven supply chain management empowers sales teams to input numbers from customer location and production teams to access them from the shop floor, perform impact analysis on the fly, accept or change numbers, and update suppliers. It also drives real-time sharing of analytical results with the finance department. The result - enhanced ability to reconcile the plan based on new situations, consider assumptions behind the changes, present it to the management for review, get required approval, and release for execution. Such a collaborative platform empowers business users to own their planning models and make changes to plans to reflect the new reality. What’s more, “what if” scenarios can be analyzed instantaneously, enabling real time changes to the plan to effectively address or reflect a change in the business or its environment.
In essence, today’s organizations need a Business 4.0 framework - with intelligent systems that are agile, automated, and on the cloud. The framework helps derive insights from the large amount of structured and unstructured data, besides leveraging prescriptive, self-adapting planning techniques to predict and mitigate risk and embrace opportunities.
To understand this better, consider the example of an automotive OEM dealing in SUVs. Typically, the company plans sales volumes of its SUVs at the beginning of each financial year based on past sales and trends, and accordingly optimizes inventory. Let’s say during the year, the company’s dealers in emerging markets report that enquiries for automatic transmission (ATM) SUVs with sunroof are increasing significantly as opposed to the manual version. If the OEM leverages its APS right, the dealers will be able to access OEM planning system through web or cloud and update the new demand volume. The sales team can see the revised demand situation on a dashboard in real time and combine it with insights from big data predictive analytics (Intelligent) based on customer feedback on social media.
The sales team can then update the new numbers for ATM SUVs through automated dashboards. This means the supply team gets real time alerts about the changes and modifies the volume based on impact analysis - after collaborating with suppliers on their ability to supply the sunroof for ATM SUVs. These new numbers can then be shared with finance for revenue and margin impact. Thereafter, the supply team can allocate the revised manual and ATM SUV volumes for sales.
Additionally, the marketing team can also respond in an agile manner and help mitigate the risk of current unsold inventories of manual SUV by planning promotional campaigns for the same. Figure 1 illustrates how the four tenets of Business 4.0 framework enable a digital supply chain model and help organizations transform into a connected enterprise
Figure 1: The four tenets of Business 4.0 framework enabling intelligent supply chain execution
How to onboard the intelligent supply chain journey?
The first step is to assess the current state of one’s supply chain capabilities, then identify gaps to be filled in order to digitize the supply chain, and finally, apply the Business 4.0 framework to bridge gaps and embrace opportunities. A connected, collaborative, and cognitive approach can accelerate an organization’s digital transformation journey; enabling intelligent supply chain planning that not only helps businesses stay relevant in the current scenario but also future-proof success.
Is your supply chain planning intelligent enough to predict risks and opportunities arising from dynamic business changes?