When the discipline of modern supply chain management (SCM) arose in the late 1990s, its promise was to create end-to-end coordination and optimization of planning, sourcing, manufacturing and logistics. Its steady adoption and advancement by the business world proved SCM’s value.                                                         

Then, with the sudden global disruptions caused by the COVID-19 pandemic, supply chain managers learned new lessons and started to see the power that artificial intelligence (AI) and machine learning (ML) could bring to SCM. 

Today, supply chain planners and managers face new challenges. Properly met, they can be seen as tremendous opportunities.  

Still, there is an ever-present danger that SCM can be perceived in the C-Suite as a cost center, much as transportation and logistics once were.  

The answer to this problem is as simple as it is complex. Supply chain stakeholders must continue to adopt the most effective technologies and practices so that SCM never becomes anything other than an essential competitive edge. 

If maturing companies become complacent with their supply chain operations, they can lose the edge they will need when disruption and change occur, and particularly if a sudden and unexpected so-called “black swan” event occurs, as is happening more frequently these days. 

Supply Chain DNA Reinvention 

To guard against that, the DNA of supply chains must be reinvented to help organizations become more flexible and more responsive. They must be enabled to predict, pivot and respond when conditions change (and they always do). Planners and managers should never stop asking questions, no matter how stable things might seem.  

• What is changing in the supply chain ecosystem?
• How is it going to impact my customers and my partners?
• What decisions can be made to maximize performance? 

At many organizations, SCM has been expanded to include product lifecycle management. This is an encouraging trend, integrating merchandise financial planning, category management decisions, and core manufacturing planning into a customer-centric view of the world that goes far beyond merely getting product out the warehouse doors. The most advanced companies are taking into account supply chain considerations when designing products.  

Supply chain managers must rise to the challenge and widen their view to understand the complete life cycle of products and categories and what the impacts will be on customer experience and financial performance. Now is the time to accelerate those efforts, to definitively understand what is happening outside the traditional “four walls” by integrating with external providers, contract manufacturers and others to become part of the larger business network. 

This process is facilitated by emerging technologies — powered by AI and ML — that can make it possible to dissolve silos in ways that have previously been impractical. For example, complex supply strategies have, until recently, been reviewed quarterly, monthly or even weekly. It just wasn’t possible to perform complex batch processing “on the fly.” 

Now, with hyperscale data processing and intelligent algorithms managers can simulate, understand and implement significant supply chain decisions in near real time. 

Changing Roles for Planners 

Supply chain planners face significant variability on both demand and supply sides of operations, and often must take on overwhelming tasks that can lead to burnout. Their view must take in supply and demand, inventory and production, plus variables that include competition, customer demand shifts, sustainability, regulations and much more. 

How do you take all this in and make profitable decisions? 

Technology can be the factor that simplifies all this. It can allow retailers,  manufacturers and logistics providers to shake hands and agree to actually work together strategically — as opposed to only talking about it. 

This is changing the role of the senior supply chain planner to that of a strategic planner, combining what might be years of experience in customer service, logistics, finance, operations, etc., to become the orchestrator of a supply chain “symphony.” 

Given the complexities of a supply chain, it’s critical to develop data that goes to the heart of each situation. In other words, you need to measure what matters. That’s easier said than done. 

Determining how and why a supply chain decision impacts the value of a product/market combination is the first step. Some impacts have value primarily as profit generators, some are growth areas, some are innovations, and so on. How are these impacts aligned with corporate strategy and shareholder goals?  

Technology can also enable greater insights beyond the broad numbers. Recently, many consumer packaged goods companies have experienced higher revenues, but it’s important to understand if that growth comes from increased volume or from price changes driven by inflation. 

Another pain point for supply chain managers is less obvious: latency. Without effective data management, its increasing volume can create a fog. If improvements are not implemented with the speed and flexibility that match the rising flood of data, there is a risk of missing a development in the market or from competitors until it’s too late to make critical changes. 

Achieving Supply Chain Cross-Functional Excellence 

The ultimate goal is to develop a supply chain network that communicates seamlessly from end to end. This goes beyond simple data integration; different decision makers need to collaborate in near real time and with data based on single source of truth, technology solutions need to provide full upstream and downstream visibility and have business workflows that operate across planning and execution to ensure functional local optimization doesn’t come at the cost of strategic performance. A good starting point is to always consider a holistic approach that aligns all supply chain functions to strategy and doesn’t just enhance performance in one function at the cost of another.  

This can all sound good to C-level supply chain officers, but to invest in significant process and technology change they must be certain of success in the end result: putting the right product, at the right time, in the right place while optimizing costs.  

Since success or failure all comes down to customer satisfaction, that goal should be embedded in every aspect of supply chain planning and execution. 

Successfully orchestrating a supply chain — with all the players in that “orchestra” on the same page — is both the most significant challenge and the biggest opportunity facing today’s supply chains. It will be achieved by those who successfully create an architecture powered by AI and ML that enables cross-functional excellence and supply chain interoperability. 

Start by bringing together planning, logistics, warehouse, finance, procurement, external suppliers and customers. From that achievement, success can follow.  

Resource Link: www.blueyonder.com