This Supply Chain Matters blog commentary is the first in a new market education series, The Future of Supply Chain Planning, developed in collaboration with our sponsor, Kinaxis.
In this series, we are going to explore what are changing needs in supply chain planning and customer fulfillment, including business, process, technology, and other dimensions. Specifically, we will address what is commonly being referred to as concurrent supply chain planning, and why it is becoming a more important capability to support today’s multi-industry supply chain business environments that are increasingly becoming more dynamic, complex, and dependent on continuous changes in business and consequently supply chain resource requirements.
We begin our series with the posing of a generic baseline definition of what we describe as concurrent supply chain planning:
A continuous approach to planning directed at supporting both short and longer-term supply chain resource and customer fulfillment decision-making needs, that incorporates timely planning and supply chain execution information as the context of such decision-making. It includes the ability to plan and execute continuously, monitor, and respond to ongoing business events, and the ability to incorporate the knowledge or context of multiple expert teams or stakeholder participants in the process, including the sales and operations planning (S&OP) process.
It is a transition from a linear, sequentially managed time-phased process of planning and decision-making to that of a concurrent process of capabilities anchored in more prescriptive and predictive data analysis, what-if scenario, or simulation-based planning techniques. It is a form of continuous planning and supply chain execution response capability anchored in today’s more advanced technology capabilities, broad-based analytics, and a singular data model approach that can support needs for broader social and collaborative-based interaction and decision-making.
Why Now? Why a Different Capability?
To answer this question, we need to look back a moment to the past 10-15 years of supply chain planning processes.
Planning methodologies prescribed by supply chain academic and professional organizations called for forms of sequential, time-phased operational decision-making processes that were predicated on pre-planned planning events and pre-scheduled decision-making milestones. The primary reasons for adherence to a sequential process were the data and process constraints inherent in overall supply chain planning, principally large amounts of data extracted from multiple systems or spreadsheets. Processing and categorizing planning data literally took hours, days, and in earlier periods, weeks to accomplish.
As we all know, the process included the development of unconstrained and constrained product forecasts or demand plans, followed by matching demand to a supply plan to identify resource shortfalls. For many manufacturers, the process often involved generating an MPS or MRP process within the resident ERP system that reflected supply chain planning recommendations, and this was the most complex step of all since data was translated to the individual item-level context. The reality of a separate advanced planning (APS) and ERP system added to the sequential process imperatives as well as inherent data accuracy and latency problems along the way.
The process was one of plan, then execute, often took weeks to cycle through with the value of the data and information losing important context during the full cycle. Once more, unplanned events or supply chain disruptions that occurred somewhere in the process would often prompt the need to re-initiate the cycle, which is often difficult to perform and caused a delay responding to the disruptions.
In many respects, S&OP processes evolved under similar pre-scheduled decision-making constructs to orchestrate either short-term operational or longer-term tactical and strategic decisions that involved executive-level participants.
As Kinaxis often points-out, gone are the days when planning happens in isolation, it now requires involvement from multiple internal and external teams and requires both planning and other important elements of information.
The clock speed of business has dramatically increased, and line-of-business and supply chain teams can no longer rely on a sequential, time-phased process of planning and decision-making. Decisions are becoming continuous and must be predicated on a singular data model of streaming information related to product demand, supply, capacity, risk factors and other needs.
As we continue this market education series, we will explore in greater depth, the process, people, advanced technology, and other considerations that make concurrent supply chain planning more a more viable alternative in today’s industry supply chain environments. Our series will include authored content from this author hosted on both the Supply Chain Matters and the Kinaxis 21st Century blogs along with interviews with others reflecting on today’s supply chain decision support expectations and they relate to the future of supply chain planning.