Digital, it seems this word needs to be added to whatever we are working on or discussing to make it appear interesting and relevant to our audience. My 20 years of work experience has revolved around Supply Chain Planning (SCP). While I have not implemented an SCP system in a number of years, I recently got the opportunity to implement an (SCP) planning and scheduling solution for a large Oil and Gas company. This provided an excellent opportunity to review and evaluate the benefits today’s digital environment provides to deliver SCP solutions compared to just a few years ago. This article explores how the benefits of SCP solutions can be realized faster and be further augmented through the digital tools and capabilities available today.
Value of SCP Initiatives
The benefits of an SCP solution are well proven and typically include:
- Improved visibility to demand, inventory, and supply
- Improved order, inventory, and production metrics
- Ability to tie supply chain processes and capabilities to company strategy
The speed of the value realized is dependent on the implementation and how the customer as well as the service team:
- Create, clean and manage the required data
- Define and integrate the SCP tool into current and new business processes and effectively manage the change
- Understand the capabilities of the SCP tool and how to deliver it
How can today’s digital environment better facilitate the delivery and corresponding value obtained from an SCP implementation?
Create, clean and manage data
Clearly, clean and accurate data is vital. For customers who are implementing an SCP solution, especially for the first time, they indicate they have routing and bill of material data and are using it to make and ship product. As a result, they perceive their data is clean. However, just because data exists and is in use, it does not mean it is clean or even accurate. Based on the type and quality of data the SCP solution requires, it becomes apparent very quickly that client data is not clean. With today’s digital capabilities it is possible to set up artificial intelligence and machine learning rules, to help review and clean the data as well as learn about its creation and maintenance thereby improving its accuracy.
Commonly, as the planning engine processes the data, it highlights inconsistencies and incomplete structures, which need to be fixed. Also, the data that is required, especially for secondary or tertiary constraints commonly does not exist in client systems. In addition, the SCP solution requires data in a very specific format so there is effort required to convert the data within source systems to the required planning system format. Again, today’s digital capabilities can help with this, providing a framework to help users store, create and maintain these additional constraints as well as ensure data is in the required format.
In addition, implementations today commonly leverage managed services to help the customer create and maintain their SCP data, especially those required for secondary and tertiary constraints. The managed services team can quickly evaluate gaps in the data and start to fill it. In addition, once the data has been created, these service teams can manage it, work with the customer to evaluate plan quality and ensure supply chain parameters defined previously still make sense.
For example, at time of implementation it was indicated that the run time of a given resource for a specific part is 10 units per hour. How was this number determined? If it was through a time and motion study, then under what circumstances? Can this machine always produce 10 units per hour? The managed service team can continually compare plan vs. actuals and evaluate what planning values should be and look to maintain them. This ensures the plan always reflects reality and can be executed.
In this case, the digital capabilities are with the managed services team as opposed to the client and the managed service teams will leverage artificial intelligence and machine learning to maintain current and new planning parameters leveraging past history and changing environmental factors. In addition, they understand planning inconsistencies and problems as well as best practice workflows and are able to take this burden away from clients. This allows for faster and less challenging implementations and for the customer to focus on what they are good at.
Integrate business process and change management
Business process and change management are very often largely ignored, and commonly the SCP tool team are expected to perform these activities. While they might be able to define a new process, true business process and change management are highly specialized skills. These activities need to be performed by suitably qualified teams. While the to-be solution has elements of the new technology there are many areas which users will be involved in, which the SCP tool is not directly a part of. It is key that roles and responsibilities are defined for the new processes, people are adequately trained, leaders and stakeholders are fully bought in and impacts are clearly communicated.
For example, an SCP tool is a key part of the sales and operations planning process. However, the cadence, meeting agendas, metrics, attendees, general facilitation, etc. are all outside of the SCP technology. They need to be managed for the successful implementation of the project and would be defined and initiated by the business process and change team and then transitioned to the customer.
It is key that implementations define specific business process and change management teams. Today’s digital environment helps these teams as there are now capabilities available to define the required business workflows without the need for technical intervention or coding. Visual drag and drop tools allow widgets to be defined representing steps in the workflow, detailing the interchange of information and filling in the white space between systems. These widgets can also define the cadence, metrics, etc. of the process steps. Libraries can be created for common process steps, allowing them to be reused. This ensures business teams are not restricted by the bandwidth of the IT organization and can get solutions to problems quickly as opposed to going through the full IT project approval and implementation life cycle.
In addition, tools like robotic process automation can be used to streamline and automate mundane process steps, allowing users to focus on more value-added decision making. This helps with change management, allowing the business user to drive the new process forward ensuring it provides the capabilities they need as opposed to the IT team defining the process based on the limitations of the system.
SCP tool capabilities
The leading SCP tools are tried and tested, and the delivery teams have deep knowledge of the system and its corresponding to-be solution modelling requirements, definition of planning and scheduling features and the optimization parameters to use. Many of these SCP tools have been rearchitected to be digitally enabled. They now leverage platform and network structures to not only represent the four walls of a company, but its extended value chain with their requisite tiers of suppliers and customers. In addition, these tools can now exploit parallel computing to optimize multiple scenarios at once, simultaneously, providing high quality plans considerably faster than in the past.
Over the last 20 years, while many aspects of SCP solution delivery have remained the same, today’s digital environment offers an opportunity for customers to obtain the full value of these solutions. Digital advancements such as machine learning, robotic process automation, and artificial intelligence, have shown to improve SCP implementations by creating rules to clean and manage data, allow business users to easily define workflows across systems without the need for deep IT and technical expertise as well as bring in data from multiple tiers of suppliers and customers and exploit parallel processing capabilities.
To maximize this value software and services companies delivering SCP solutions should provide capabilities and even organize and orientate themselves directly or through partners across process and change management, managed services and SCP specific solutions leveraging the digital capabilities available in a methodical crawl, walk and run implementation cycle.