3 minute read 31 May 2019
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Five steps to help you upgrade your supply chain planning

By

EY India

Multidisciplinary professional services organization

3 minute read 31 May 2019

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Find out how integrated digital planning can be the key to supply chain planning.

For many organizations, the promise of new technology and digital holds great appeal. However, the digital journey of creating an integrated planning capability entails more than simply leveraging technology. The real test is linking your strategic, tactical and operational planning horizons as well as removing the silos across your organization to make gains in agility and efficiency. But all of this is easier said than done.

The ultimate prize is for companies to know what has been sold today so that they can make more of it tomorrow and restock shelves in three to four days’ time. Products flowing seamlessly direct to retailers’ shelves in line with consumption is the dream, and integrated digital planning is the reality.

Integrated digital planning is a comprehensive concept for successfully and sensibly achieving horizontal and vertical planning automation. Every company can get there, and the journey has five steps:

  1. Create planning hubs and centers of excellence:
    A multifunctional synchronization center of excellence can enable true end-to-end synchronization.

  2. Transform sales and operations planning to integrated digital planning and then to enterprise business planning:
    The set of processes, collaboration across functions, governance and cadence, is required to drive profitable growth in a transparent and insightful way.

  3. Segment and synchronize — create flow across the segmented value chain:
    Remove the bullwhip effect in your supply chain and bring stability across it to flow your product to the market.

  4. Initiate a connected and exception-based value chain to focus planning efforts and gain efficiencies:
    Leverage stability, optimize your planning processes and technology, and deliver an exception-based planning value chain.

  5. Establish “lights out” planning with intelligent automation based on cognitive and artificial intelligence (AI) and robotic process automation:
    Create an autonomous planning capability that will take care of the best part of your planning effort, giving time to planners to monitor the value chain and make better decisions to support the business in line with the other functions.

There are no technology shortcuts

Many organizations seek guidance because they are anxious about the digitalization trend. They don’t want to miss the bus and do want to know how they can implement the latest technology into their supply chain. This is the wrong approach. There are no shortcuts, and adding new technology for technology’s sake won’t solve all existing problems.

Yet, too many businesses try to begin the journey despite badly implemented processes and unclear roles and responsibilities and organizational setup, to name a few — and these need to be fixed before the push to digital can start.

Data quality is a widespread problem, too. Clean master data is essential for automation, but legacy ERPs and mismatched systems can make it incoherent. The one exception to this is the possibility of using AI in the data lake to match up product numbers and descriptions across multiple databases. But getting clean, quality data takes time as well. There are no quick fixes.

Detours on the way to integrated digital planning

The most challenging issues in planning are non-synchronization and a persistent bullwhip effect across the value chain. Often a company has very high inventory but is wrestling with stockouts and service-level issues, without understanding the root cause.

The root causes are:

  • High forecast bias and/or error
  • A disconnect with sales and marketing activities that drive demand
  • A lack of segmentation and specific planning parameters by product
  • Supply chain is not set to react to true consumer demand
  • Key suppliers not integrated into the planning capability — their unreliability affecting production upstream

It is imperative to break down silos, streamline processes and improve data quality in order to have a seamless journey toward integrated digital panning.

Summary

Many organizations try to start the digital journey to integrated supply chain planning prematurely, without well-implemented processes and clear roles and responsibilities. The real test is linking your strategic, tactical and operational planning horizons as well as removing the silos across your organization to make gains in agility and efficiency.

About this article

By

EY India

Multidisciplinary professional services organization