From planner to value chain strategist: unleashing the power of supply chain transformation

When supported by the right technology, disruption leads to valuable transformation.

The adagio that every crisis offers opportunities is very clearly demonstrated at the level of supply chains. The recent string of disruptions, including the Suez Canal incident, COVID-19, and raw material shortages, has compelled companies to examine their supply chain processes. This scrutiny has revealed that effective supply chain planning and management can yield significant value for organizations, whether it be in financial terms, sustainability efforts, or other areas. It is crucial to view this transformation as a journey, prioritizing the establishment of a strong organizational foundation before implementing supply chain technology.

A recent study conducted by EY and Oxford University highlights the accelerated pace of transformations occurring within supply chains. These transformations are a direct result of the series of disruptions experienced, with each event leading to valuable insights. The recognition of the need for change and the adoption of innovative approaches in supply chain planning are driving this process, as companies seek to enhance their operations and extract greater value from their supply chain networks.

"Until recently, the supply chain planner was actually primarily linear and transactional," says Tom Van Herzele, partner at EY Belgium and responsible for supply chain services.  “In essence, their role primarily revolved around synchronizing supply and demand. However, this description merely encapsulates the fundamental essence of a planner, which is excessively limited and offers little added value.”

“This transformation necessitates the establishment of bridges between different supply chain domains, such as demand planning, supply planning, operations planning, and sales. By fostering alignment and promoting end-to-end collaboration, organizations can unlock the total added value of the supply chain process.” Van Herzele asserts that the incremental deployment of suitable technology is the key to building these bridges and enabling the transformation to take place.
 

Reliable technology partner

This shift represents a disruptive change as supply chains transition from human-driven to technology-driven operations. Consequently, the demand for a dependable technology partner becomes crucial. As a result, EY collaborates with OMP, a market leader in supply chain planning renowned for their proprietary platform, which serves some of the largest companies globally.

"What we aim for is to bring all stakeholders within supply chain business together on one cloud-based platform," says Maarten Arnouts, global alliance lead of OMP. "So that instead of working in silos as in the past, everyone is looking at the same data sets and planning constraints and one central decision unit can be formed. Given these disruptions, that is absolutely necessary."

"In fact, our approach cannot solely rely on transactional operations; it must adopt an exception-based mindset. We must consider the comprehensive impact on our customers when disruptions arise and strategize how to prevent them through optimal planning. This entails assessing various scenarios, such as raw material shortages or unforeseen product growth, to determine the most favourable course of action. By doing so, we can steer clear of constantly operating in survival mode and instead foster a proactive stance as a company.”

“Nevertheless, technology plays a pivotal role as a catalyst in this context. The supply chain has evolved into a realm of intricate complexity, accompanied by vast datasets. Thus, the inclusion of tools encompassing artificial intelligence, algorithms, machine learning, and cloud technology has become indispensable. Similarly, supply chain planning necessitates a platform that fosters collaboration among individuals, as it has outgrown the capabilities of a single planner.”

“Furthermore, the platform must be cloud-based to facilitate connectivity from any location and device. This global accessibility enables seamless collaboration and ensures adherence to a standardized model, as opposed to the previous localized approach where each individual worked with their own system.”
 

Reorganization required

The process of uniting stakeholders and leveraging technology undoubtedly necessitates a reorganization of the organization's operational structure. Tom Van Herzele agrees, emphasizing the need to strategically deploy personnel for optimal supply chain planning. Recognizing that people are the foundation and their valuable experience grants them unparalleled insight into the organization's workings.

“In practical terms, this reorganization comes down to creating more centralized hubs within the company that deal specifically with this matter. This trend is increasingly observed in large companies, marking an evolution in the market away from past decentralization.”

“Previously, planners were distributed across multiple plant buildings, but it is logical for them to work together. This collaboration not only enhances planning synergies but also improves knowledge retention within the organization. It's important to note that this centralization doesn't necessarily require a physical center of excellence; it can also be achieved virtually. This allows planners to be located in different premises while easily collaborating on a unified platform, thus transforming into value chain planners who consider the broader organizational scope beyond specific locations.”
 

Sustainability as added value

“Sustainability frequently plays a role in such transformations,” adds Tom Van Herzele. “In the past, considering sustainability seemed implausible, but the adaptability of a unified, single platform and a step-by-step approach have made it achievable. This enables companies to genuinely evaluate their supply chain in a comprehensive manner, fostering a holistic perspective and ultimately generating additional value.”