Digital supply chain planning: finding synergy between process, people, data, technology, and tools
We are in the middle of an APO replacement wave, where many companies have either already implemented an Advanced Planning and Scheduling (APS) tool, are in the process of doing so or have a placeholder on their roadmap. Yes, supply chain planning is hot and digital planning is even hotter. This last one is however often only linked with the implementation of an APS tool, but there are many other aspects to consider when you want to board the digital planning train. Ready to jump on?
PROCESS: Next generation planning processes
The world is changing. In the upcoming years we will see a transition from planners supported by machines, to machines planning guided by people. This requires us to think about how our planning processes are evolving. How do you find the right balance between speed of automation and the right level of verification by people? The pitfall of all this computing power is that our planners lose touch with how the system arrives at a plan and what goes into the decisions being made. Traditionally, the planning process has been time-consuming with planners making their plans manually with little support from systems. With the help of APS tools, planning can become more exception based, giving planners valuable time back to do value adding work. Complex solvers running on improved data quality and functionality that lets us collaborate easily, will allow us to make faster and better-informed decisions. Depending on supply chain complexity we might also see the boundaries between current planning processes blur, with planning tools supporting a longer planning horizon at a granular level.
PEOPLE: Digital-ready people and organizations
With these next generation planning processes at your doorstep it is important that you start investing in the skill set of your people to enable them to support this transition. Today we often see planners spending a lot of time reworking, refining, and adjusting the plan. They are number crunching and finding root causes on why totals do not match a reference point, fixing master data issues, trying to make sense of what they see. They are fighting many battles of process inefficiencies and dissatisfying tools trying to keep the light on.
With support of new planning tools, you will see their roles shifting to understanding how the newly recalculated parameters influence the plan and including risks and opportunities to share insights in the resilience of your supply chain. The actual pace of new technologies and tools will require planners to keep up with innovation and foster a growth mindset.
As we are moving away from just creating plans and move towards driving customer value, it requires planners to be able to collaborate x-functionally. Interactions will not be restricted to their closest business partners, but further integration of planning processes will require them to collaborate with suppliers, distributors, and customers. In the era of digital planning planners should be able to find the right stakeholders and be able to talk the same language by having a commercial understanding and comprehend the end-to-end network.
DATA: Master data factories
Many system implementations in the past have failed due to underestimation of the importance of data. Often when the users report back that a certain planning solution is not working, it is not the functionality that has been built that is not correct, it is data that is incorrect or incomplete. We still didn’t find the right way to consider master data as sexy– hence we did create our own data factory methodology. In the ambition to plan with lights out, instead of on, your data factory becomes critical.
At bluecrux we believe that data is crucial for a successful implementation and we advise our customers to create their very own data factory, linking your data governance and strategy to your business drivers and goals. Setting up the right governance, supporting organization and data management processes with clear KPIs will ensure that your factory creates data in full and on time.
TOOLS: Digital planning tools
Decision making in supply chain planning requires three things:
1. Having the right, trustworthy data to base your decision on
2. Cross functional collaboration in the decisions being made
3. Having the right tool to support, document and inform on the decision making
As you venture on your digital planning journey and mature your planning processes it can be helpful to look at the decisions that you make in each step of the process and categorize on those decisions. The Cynefin framework developed by Dave Snowden in 1999 when he was working for IBM can be a useful starting point and different way of looking at your planning processes. This framework distinguished decisions in a chaotic, complex, complicated, and simple space; each domain requiring a different decision approach which in turn can help you identify what is required from a digital planning solution.
For example, responding to delayed orders might be categorized in the simple space. The way to tackle the decision-making process is clear; cause-and-effect relationships are known by everyone and there are rules in place to deal with those. These are typically candidates for decision automation with support of a planning tool. Decisions you make in your S&OP process like supply capacity constraints might require expertise to find the best solution, which would put them in the complicated space and scenario management capabilities could be key to facilitate the decision making process.
TECHNOLOGY: Technology stack strategy
What we typically see with our customers is a move towards a single APS solution that covers all their planning needs. But there are companies that take a different approach to tool selection. They are the ones who opt for selecting best of breed solutions; selecting software solutions that specifically cater to their demand planning, detailed scheduling, or tactical planning needs. The advantage of a single solution is that you typically get a highly integrated solution that seamlessly connects the different planning layers and offer options to easily collaborate on the creation of up- and downstream plans. The downside of single solutions is that there are very few solutions that offer great functionality across all planning processes and horizons.
The future: finding that sweet spot
The future for most companies will likely see the implementation of an APS evolve to be part of an ecosystem to further mature supply chain capabilities. It will be important to start finding that sweet spot of where automating planning decisions make sense and where new technologies as part of your technology stack can help drive insights. Advanced AI or Machine Learning capabilities can help contextualize and visualize data supporting the decision-making process.
In the end, it all starts with understanding which tools are the best fit to fulfil your purposes, and as integration between systems is becoming less of a hurdle, the more focus can be put on best of breed applications and the core of functionality, rather than ease of integration.
“Make sure you take your people with you on your digital planning journey, equipping them with the right skill set and building a strategy around data and technology.”
(Niels Warnaar, Digital Supply Chain Planning expert)
Having jumped on the digital planning train, we can all agree now that the digital planning journey is more than just selecting and implementing an APS tool. It’s all about the synergy. So, are you ready to jump on? Get in touch & see how we can support you in this journey. Or start by joining our upcoming Webinar session about this topic!