Today, supply chain networks span the globe, with the digital revolution multiplying both opportunity and complexity. As a result, the combination of the need for speed and growing big data volumes can cause existing supply chain planning processes to overload.
The irony is that the solution to the planning crisis also lies in the cause. Big data contains digital signatures can be used to predict future demand and flag potential issues.
Ultimately, digital supply chains enable a more strategically approach along with better outcomes for manufacturer and their value delivery to customers. The challenge for manufacturers to date is being able to get to this truth and then capitalise it in an effective manner.
Theory and reality
There’s a real difference between theory and reality that is preventing supply chain planners from making the right decisions.
In theory, organisations expect 75% of a planner’s time to be spent on medium to long-term decisions, providing all-important strategic alignment in a changing environment.
Keeping this alignment is crucial while there is so much change going on, with optimisation evolving from node to network, planning and decision frequency moving from periodic to real-time and the supply chain itself evolving from one-size-fits-all to a market segment of one.
However, the reality is that, today, planners spend three quarters of their time reacting to short-term issues, resulting in inefficient use of their time, and poorer longer-term outcomes.
There are two possible ways to resolve the planning crisis manufacturers are facing in the digital age:
Solution A: Hire more planners. To date, the most common solution to digital complexity is to hire more planners; in fact, some organisations have increased their planning staff by as much as 50%. However, it can take time to identify the right people, and this is clearly not a sustainable solution.
Solution B: Give them tools that are fit for purpose. Rather than getting more bodies on board, digital control towers do the heavy lifting by providing the next generation of visibility into the ecosystem beyond the traditional walls of the corporation, creating a real-time digital twin of the network and forces that are acting on it .
Planners need a system that absorbs the impacts, analyses the situation and provides an integrated and collaborative self-learning environment.
Incorporating AI and ML to interpret key digital signatures that indicate future events, and in turn make accurate, automated recommendations on the best next action to take.
With Luminate Supply Resolution, JDA offers this combination of next generation analytics, collaboration and intelligence. It can act as a co-pilot for the planner and his collaborators, engaging them in an integrated planning and supply resolution environment.
While automating the monotonous exceptions, the system highlights the more urgent issues that require the associate’s attention, then enables them to drill into the impacts, timing and history of each issue.
After showing real-time status for the entire supply chain, it can make recommendations of the potential courses of action to be taken, and advise what impact they will have on the business.
The planning crisis resolved
To resolve the planning crisis you must accept that there is a better way of working.
Traditional deterministic techniques are simply not designed to cope with the tidal wave of data manufacturers now have at their fingertips in the digital world, so they must adapt to new probabilistic approaches that utilise ML and AI to reveal the patterns that lie within.
By predicting the future, they can bring the planning horizon forward, with reactive modes translated into planned business optimisation and opportunity realisation.
By enveloping manufacturing supply chain planners in a collaborative end-to-end process designed around their workflow, they are freed from the detail and guided to the optimum results in a single and coherent end-to-end environment that integrates both planning and execution.
Resolving the Supply Chain Planning Crisis
Planners are spending three-quarters of their time ‘reacting’.
The result is inefficient use of planners’ time and poorer outcomes as more issues become short term. Moreover, there is less opportunity to analyse root causes and the effectiveness of past decisions.
Inevitably inventory rises, penalties are incurred and more time is spent expediting. This is not a satisfying outcome for the planner or the company. Something has to change.
*Images courtesy of Depositphotos