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August 31, 2017

Supply chain disruption in the digital era is less about any one new technology, and more about how companies leverage the convergence of digital technologies to earn a competitive advantage. Supply chain planning has traditionally been constrained by the lack of connectivity and visibility of functional silos. As a result, different functions use different data sets and points of view to develop their functional plans. As each function executes its individual plan, they create actions that are contrary and disruptive to the processes and plans of other functions.

For example, your marketing department creates a new promotional campaign to increase sales of widgets by 100,000 cases. Your distribution and production department on the other hand are not aware of the marketing departments plans, and expect to stock inventory of only 1,000 cases based on statistical analysis of the last three years of shipments. When the promotional campaign is executed, it creates new demand for 100,000 cases of widgets unfortunately, however, the warehouse is short 99,000 cases, which renders the campaign useless, nullifies the efforts of the marketing department, and hinders the organizations overall progress.

To resolve functional disconnects like the one narrated above, Sales & Operations Planning (S&OP) was introduced way back in 1987. However, in todays day and age they fail to provide users with the best information, especially in a world where manufacturers must be nimble, agile, and respond to changes instantaneously. Since planning cycles are monthly or weekly, for example, the reports fail to provide visibility into the data and the insights that informed the demand plans.

Today, companies can leverage the Internet of Things (IoT) and cloud computing to deploy Integrated Business Planning (IBP) processes and applications that transcend functional boundaries, collect data from new sources (internal and external big data), and apply advanced analytics. Doing so enables them to facilitate cross-functional and organizational collaboration at near real time speeds. Leveraging the convergence of digital technologies such as cloud, IoT, big data, advanced analytics, and business intelligence enables companies to create new platforms for connected digital collaboration. This helps IBP processes and applications overcome the constraints of functional silos and boost the synchronization, accuracy, and timeliness of plans within the enterprise and with customers and suppliers.

Why should you care? Its the time to compete factor. Advanced analytics and machine learning are based on iterative execution and a history of behavior and outcomes. It takes time to collect the data and experience and learn from the outcomes. If you are not leveraging analytics today, if you are not building data and historical learning, you are behind. And, its tough to catch up. The fact is, machine learning speeds up over time and this advanced learning and competitive advantage may prove impossible for you to overcome.

Act now to provide your company with a strong competitive advantage and quickly catapult yourself ahead of the competition. As your analytics and machine learning algorithms are based on master data management, history from new data sources, and learning iterations, your advanced analytics and machine learning capabilities will mature with time and provide you with better insights. Strengthening your organizations productivity with capital and resource management will improve the experience for all the stakeholders across your value chain. Leverage on digital and supply chains applications experience to create a winning supply chain and a significant competitive advantage in the marketplace.

Dont ignore the need to allocate resources for the creation and development of a robust planning system while captalizing on new digital forces including cloud computing: because, if youre not in the game, youre behind the competition. And catching up isnt easy as your competitors are reinventing at a lightning speed. Join us at Oracle Open World 2017to hear Scholastic share how they are leveraging the cloud for supply chain planning. Meet with our experts to discuss your supply chain strategies.

Matthew Lekstutis is the Supply Chain Consulting Lead for Tata Consultancy Services. He has over 20 years of experience as an industry executive and advisor including COO level P&L management responsibility. Matt helps clients to capture business performance improvement opportunities and drive growth by enabling new business models and technologies across the supply chain.


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