It’s no secret that, globally speaking, most supply chains could be called a disaster — and that might be charitable.
Circumstances beyond enterprise control — a worldwide pandemic that won’t go away, price-gouging by unscrupulous companies, political machinations, even the prospect of a world engulfed in war — have conspired to create the greatest supply chain challenge of our time, possibly in history. But often, the biggest choke point doesn’t lie in the outside world, but at the corporate level itself.
Supply chain executives and managers continue to refine their strategies, often with some success. But they are too often hamstrung by a decades-old culture of supply chain planning, in which all the players — sales, marketing, finance, forecasting, logistics, transportation — operate in silos, isolated from each other. Sales and operations planning is too internally focused. Integrated business planning lacks advanced analytics and is narrowly focused on finance. Think of these as parallel verticals within the supply chain.
But there’s another approach — concurrent planning — that can improve visibility and collaboration across the supply chain.
What Is Concurrent Planning?
Concurrent planning seamlessly integrates, automates, and optimizes planning processes and systems, from demand planning to production scheduling to deployment. The key differentiator between concurrent planning and other models is its horizontal approach, rather than a vertical approach.
Departments needn’t develop their own plans then share them with each other, only to discover they have conflicting assumptions. Concurrent planning combines data, automation, and sophisticated analytics to communicate a shifting landscape to all parties in real time.
So how does concurrent planning help alleviate those supply chain choke points?
Concurrent planning facilitates coordination all the wayacross the supply chain, from manufacturers to transportation providers and to retailers and consumers. This allows companies to react dynamically to changes in demand patterns. Of course, this doesn’t happen magically. For example, the visibility from customers to suppliers is dependent on intelligent automation supported by machine learning at the heart of the supply chain.
Not only does it allow this dynamic reaction, that reaction is accessible to all partners in the supply chain at the same time. There’s no communiqué from department to department to organize a response.
Concurrent planning demonstrates the impact of any changes to any given department’s strategy to all other departments immediately.
If the last two years have demonstrated anything, it’s that resiliency is more important to the supply chain than ever. Concurrent planning can help mitigate the impact of disruptions to the supply chain. Knowing in advance that a regional trend in pandemic growth is beginning, an organization can take steps to re-allocate resources to ameliorate the problem, or source alternative partners or routes to keep product moving.
Likewise, if a natural disaster incapacitates a key link in the chain, concurrent planning can source other capacity temporarily — and, just as importantly, provide guidance on where the company should try to help those affected.
Concurrent planning needn’t necessarily be a build from the ground up. Existing, robust supply chain technology can be enhanced by intelligent automation, advanced analytics, and a variety of artificial intelligence technologies such as machine learning and natural language processing.
And these complementary technologies need not be managed in-house. There are many options for offsite, cloud-based applications: private or public clouds; platform as a service, which allows a company to install and maintain these applications at an externally managed server farm; application as a service, which essentially rents use of the application on a per-use basis, leaving the management and maintenance to a service provider; and more.
These options confer several advantages: pricing on a per-use basis, upfront investment cost, ongoing maintenance costs and resiliency — any system worth using will have automatic and seamless failover from one machine to another in the event of failure.
In a time when the worldwide supply chain is precariously fragile, having the most control, the most resilience, and the most reliability are a profound competitive advantage. Concurrent planning offers clear benefits in all those categories.
Charles Chase is the executive industry consultant for the SAS global retail/CPG industry practice and author of Consumption-Based Forecasting and Planning: Predicting Changing Demand Patterns in the New Digital Economy.
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