Making Provide Chain Planning Agile With Modular Planning Applied sciences
“Could you reside in attention-grabbing instances,” extensively attributed as a Chinese language curse, some declare this as a blessing; whichever aspect you’re taking, that is precisely what’s taking place within the provide chain world since 2020, and it appears to be like like we will likely be residing with this blessing/curse for some time longer.
Our lives grew to become extra attention-grabbing with the onset pandemic, adopted by labor shortages, the Russian invasion of Ukraine, rising oil costs, and the oncoming recession. In consequence, a variety of companies, from eating places, and retail chains, to producers, have been redesigning their enterprise providers and operations and re-engineering their provide chains.
Rising Themes for Provide Chain Planning
Together with Digital Transformation, leveraging AI/ML, autonomous decision-making, and going for Ecosystem collaboration, “Composability” is one other central theme to make the provision chain planning extra agile. Primarily based on all my conversations with colleagues, “Composability,” whereas a well known idea of programming, might be the least understood one by the provision chain neighborhood. On this weblog, I’ll attempt to shed extra gentle on it with examples from our work with our prospects.
Composability as an Enabler of Agility & Resilience
As provide chain professionals, we are able to all agree that change, volatility, and ambiguity will not be going away from our lives. We want planning platforms to maintain up with all of the modifications. This implies we’d like extra agile, versatile, and scalable planning platforms to course of and consolidate new information sources, drive insights utilizing superior analytics comparable to AI/ML to drive autonomous choices, and broaden collaboration inside and outdoors our organizations. Properly, we additionally know that many legacy methods will be unable to assist all these modifications shortly and cost-effectively. Whereas we’d go and get one of the best of the options on the market to fulfill immediately’s challenges and leverage immediately’s know-how, that’s not going to come back with a lifetime assure that it’ll meet all our wants within the years forward.
So what to do? Composability is the reply to that problem.
What’s Composability?
Consider the Lego as the final word instance of a composable toy. It has some pre-built parts of various sizes and styles, and everybody can shortly construct their toy. My two nieces love constructing vehicles! The 5-year-old one makes use of the identical items to make her automotive, and her 10-year older sister makes use of the identical items to make a distinct automotive. And generally the youthful one likes her sister’s automotive high, and she or he takes it and sticks to her personal automotive! That is how composable methods work. They arrive with pre-built parts and API interfaces that may be organized in another way and simply changed with different items as wanted. So, when you’re not pleased with a selected facet of a system, you don’t have to tear it off fully and begin over with a brand new system.
Examples of Composability in Provide Chain Planning Platforms
These of us who’ve lived by Digital Transformation initiatives know that it isn’t a mission with an finish date; it’s a course of, a mixture of many initiatives, and it’s best tackled in phases in an agile method. This goes for Provide Chain Planning platforms as properly. Subsequently, when deciding on a platform to assist your digital future, it’s important to make sure the platform is versatile, modular, and simple to reconfigure in just a few weeks as your provide chain planning capabilities progress by completely different phases of digital maturity. Listed here are some real-life examples from the trenches to display what I imply by flexibility and modularity. On this weblog, I’ll give attention to the Q-commerce case. Q-commerce provide chain planning requires velocity, automation, and precision on account of supply expectations and restricted space for storing in darkish shops. Right here’s how a composable platform permits transformation from Degree 1 Maturity to Degree 5 Maturity inside months, not years!
Quick-Rising Q-Commerce Enterprise Implementing Autonomous Planning:
Step 1 – Going Digital and Creating Built-in Planning Spine
Within the first section of the digital transformation journey, the main target is on getting the planning course of and all of the associated information on a digital and built-in platform away from the spreadsheet. Within the early days, the information was not all that clear and constantly maintained, so the Automated Knowledge Diagnostics module is ready up inside days of constructing the information integrations and always up to date as new points are found. The MVP (Minimal Viable Product) model, set as much as go dwell in a number of nations inside three months, includes Demand Planners, Provide Planners, and Stock Controllers with completely different entry rights to observe system-generated outcomes. They’ll alter portions and generate provider replenishment orders in PDF or Excel as wanted. On this model, there’s no automation round managing promotions, so demand planners have to become involved in adjusting the forecasts for promotions. In parallel, the platform is launched with a smaller planning crew and with out demand planners reviewing forecasts. The platform serves the wants of various ranges of useful resource availability. Even when there’s no demand planner concerned, it really works completely, which is the case for an additional Q-commerce firm utilizing the identical platform.
Step 2 – Getting Smarter
Within the following steps, which begin inside just a few weeks, merchandise on promotion are flagged and fed into the system. The forecast engine pre-processes are reconfigured inside days, gross sales information for the merchandise on promotion are normalized, so the next week’s baseline gross sales are mechanically adjusted, and the demand planners want to the touch fewer objects. The following step will likely be to configure the forecast engine to start out forecasting the influence of the upcoming promotions. This requires historic information to construct up for ML algorithms to work successfully and the class managers to align on a scientific means of managing promotions.
Step 3 – Increasing Horizontal Integration
In parallel, on the identical platform, once more in just a few days, there’s a brand new integration being arrange with the monetary system and the WMS. The system can now mechanically obtain all authorized Buy Orders so receipts may be reconciled in opposition to orders.
Step 4 – Closing the Loop and Getting Actual-time Visibility
- The following step was getting a suggestions loop from the WMS system again to the planning system to create OTIF (on-time-in-full) metrics on provider deliveries so the planning system may alter suggestions based mostly on the real-time receipt data. Now, the day by day batch course of for replenishment planning evolves right into a dynamic one that may take into account receipts coming within the morning earlier than Buy Orders for the subsequent replenishment are despatched out within the afternoon. Contemplating a good portion of the assortment is recent and short-lifecycle merchandise, this tremendously impacts managing availability and waste. Once more, the real-time recalculation is enabled inside not weeks however days. The WMS system is being rolled out in phases throughout completely different nations, so this dynamic recalculation is just enabled for nations the place that is out there.
- Within the meantime, the stock information high quality has developed, and the provision planning groups have been reorganized in some nations. The replenishment course of requires the stock controller’s blessing in order that step may be skipped for some nations with reconfiguring the digital workflow.
Step 5 – Exterior Collaboration: Increasing Built-in Planning to the Suppliers
The following degree of maturity is provider collaboration. Once more, there are completely different ranges of maturity throughout the suppliers. Not all enterprise companions are prepared or able to organising EDI configurations. No worries, there’s one other different, which is enabling collaboration proper on the cloud-based platform. Any provider with entry to a browser can now take part within the viewing and confirming Buy Orders and issuing advance transport notices. Even the mom-and-pop bakery across the nook can do this with none know-how funding. One other Lego piece is in place in just a few weeks!
With versatile, modular, and easy-to-reconfigure platforms, you’ll have a lifetime assure that the system will guarantee agility and resilience to your provide chain operations as you progress by completely different phases of digital maturity. Similar to my youthful niece by no means being afraid of constructing out completely different variations of vehicles and utilizing her sister’s cartop and making hers fancier!
Asena Yosun Denizeri is the Head of Retail options at Solvoyo and has over 20 years of expertise in implementing Planning, Pricing, and Optimization options in world firms within the U.S. and Europe. She has led cross-functional groups in large-scale digital transformation initiatives touching Class Planning, Assortment Localization, Demand Planning, Promotion Planning, Allocation and Replenishment, Value Optimization, and S&OP.
Following her consulting tenure with Silicon-valley based mostly software program firms, she introduced her Superior Analytics and Enterprise Course of Engineering expertise to Attire Retail the place she labored at Hole Inc. and Cache, the place she led Merchandise Planning and Distribution groups to advance analytical capabilities in Forecasting, Assortment Planning and Value Optimization to enhance gross sales and profitability.
Yosun holds B.S. and Grasp of Engineering levels in Operations Analysis and Industrial Engineering from Cornell College. She is among the contributing authors within the Oxford Handbook of Value Administration and has been a visitor lecturer in San Francisco State and Columbia College enterprise college on a number of events.
