Connected Supply Chain Planning
Supply chain planning has gone through large-scale transformations in the past few years. Some companies plan with a mix of spreadsheets and enterprise resource planning (ERP) systems, while others use cloud-based planning platforms. Information entering from many different platforms soon becomes messy, disjointed, and disconnected. Using this approach raises more questions than it tends to answer.
- Are the forecast numbers updated and shared across the network with relevant stakeholders, including sales, finance, and operations?
- Are inventory numbers from previous versions of a spreadsheet accurately entered onto a new version?
- What do you do when disruptions like natural disasters or global pandemics strike the supply chain?
Without the proper connection, these questions can go unanswered. And currently, with the massive waves sweeping across the supply chain planning world, companies cannot afford to move forward with slow, siloed planning. First, let’s define supply chain planning, then we can talk about a few key areas of supply chain transformation and some tips for building connected supply chain planning.
What is the supply chain planning process?
Supply chain planning is the process for planning a product or set of products from raw materials to the consumer. This includes supply planning, demand planning, and sales and operations planning (S&OP).
Supply planning determines how to fulfill the demand plan best. The objective is to balance supply and demand to help the organization’s financial and service objectives.
Demand planning is the process of forecasting demand to make sure products can be reliably delivered. Having effective demand planning can improve the accuracy of revenue forecasts, align inventory levels, and enhance profitability for channels or products.
S&OP is a monthly integrated business management process that empowers management to focus on key supply drivers, including sales, marketing, demand management, production, inventory management, and new product introduction.
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How to achieve connected supply chain planning
To succeed in a rapidly growing global market, you must adapt to the digital revolution and seek out practical ways to connect your supply chain planning from start to finish. Here are some steps to achieve connected supply chain planning.
Make the move to real-time supply chain planning
When using spreadsheets for planning, companies tend to rely on historical data, resulting in little room for changes should any disruption occur in demand or supply. For example, based on the previous year’s numbers, a company can estimate the number of products it will sell in the next year. But what if a global pandemic breaks out and a key distribution center closes leading to a shortage in supply? With Vanguard Predictive Planning™, you can create “what-if” scenarios and plan more effectively so you are ready when disruptions occur.
Unify supply chain planning with enterprise planning
Another vital step is connecting traditionally siloed supply chain planning to sales and operations planning. Companies can benefit from synchronizing their short-term operational planning with their long-term business planning processes to make real-time updates to their forecasts and supply. Deploying real-time S&OP solutions that enable enterprise-wide collaboration means key stakeholders across the organization can create new scenarios and quickly assess how to use resources wisely to optimize profitability. Vanguard’s collaboration hub enables real-time collaborations on forecasts and plans, so teams can leverage human insights in meaningful ways.
Anticipate end consumer demand
For consumer-packaged goods (CPG), anticipating what customers want and when they want it is an ongoing challenge. A planning solution, such as Vanguard Predictive Planning, allows end-to-end visibility across the supply chain, and their existing network to sense demand signals from consumers. When you can rapidly identify changing consumer behavior and assess how that changes demand for your product, it benefits your company and key stakeholders by improving profitability and it benefits customers by increased fulfillment rates.
Leverage real-time data across all points of the supply chain
Because supply chain planning typically involves a multitude of suppliers, channels, consumers, and pricing schemes, models soon become large and unwieldy – especially when spreadsheets are the primary planning tool. Incorporating a solution that uses real-time data allows you to plan with more accuracy and reduce the risk of stock-out or having a surplus of inventory consuming inventory holding costs.
Have the flexibility to deal with change
When you have technology that lets you plan efficiently and react quickly, disruptions in supply chain planning are not so disruptive, because re-planning and re-forecasting are easy, resulting in time and money saved and increase profitability.
Emerging technologies like artificial intelligence and machine learning are generating massive amounts of attention in the supply chain management world. If you can effectively integrate these emerging technologies into your supply chain, then that will put your company one step ahead of your competitors. Are you ready to take your supply chain beyond the limitations of spreadsheet planning? By effectively adapting to the supply chain digital revelation and following these steps to connected supply chain planning, you will be ready to collaborate across the enterprise, quickly adjust to market changes, and reap the benefits of lower costs and increased efficiency. Reach out for a software demo today to see how we can improve your supply chain planning process.
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