Having an end-to-end Supply Chain planning approach can turn out to be a competitive advantage in the market. Though, in order to leverage your Supply Chain for a competitive advantage it is important, to utilize technology so that it adds business value. In this blogpost we will share with you how it can benefit the business strategy.
The Supply Chain is transforming
The Supply Chain as we know it today is under pressure. Global Supply Chains are operating in volatile environments. The impact of political instability around the world is impeding the efforts of global companies to efficiently drive cross border trade.
At the same we will see the disruption of global sourcing strategies designed to make in-bound Supply Chains leaner through accessibility to a greater diversity of sources. Indeed, political risk is the “next normal”, as regulatory changes challenge global Supply Chains. Adding to that we have the ”Uberization” and the climate change which challenges the designs of the Supply Chain.
In other words, because the likelihood is that centre-of-gravity of a Supply Chain is going to change frequently in the future, given the volatility of the business environment, the need for flexibility in the supply/demand network increases.
Supply Chain designs to date have predominantly followed an ‘inside-out’ approach, where personnel inside the business take a view of what they think customers’ needs are, and proceed to build the corresponding infrastructure, processes and technology. When times are stable, and growth is positive, everything you do in this respect seems to work. But as we move into more volatile operating environments, and customers become more vocal and empowered, it becomes obvious that a single ‘ideal’ supply chain configuration will be unable to service the full spread of customer expectations.
Many organizations want to digitalize their supply chain planning, but few supply chain planning leaders know what this really means. If you want to know more about what Supply Chain planning is all about then you can read this blogpost (https://optilon.com/optilon-academy/what-is-supply-chain-planning/)
How can the business benefit from an end-to-end approach?
It can help leverage the volume of data
Anyone working within the supply chain and planning process is familiar with the endless array of data coming from the increasing number of systems in play. The question lies in how organizations can leverage the volume of data to achieve faster transfer of information for powerful insights and holistic visibility of their Supply Chain across multiple functions. To evaluate and improve the efficiency of their Supply Chain, organizations need solutions that makes sense of the data and that connects the organization for effective informed decision making.
It can reduce resource consumption
Automating non-value adding manual tasks with Supply Chain planning technology is more efficient, accurate and cost effective than manual labor. It helps improve operational efficiency. It typically reduces workload by 50-90% and frees up time for planners to improve the business through more analytical and proactive tasks. This could be analytical work, communication, mitigating risks or comparing plans.
It can reduce complexity
By utilizing Supply Chain planning technologies it is easier to understand and visualize the complex and uncertain world. It is easier to simulate and get a feeling of the outcome of the decisions and to use one set of data. It is also a way of capitalizing on the data that the company possesses.
It can enable visualization
Digital technologies also provides an opportunity for using a digital twin to simulate or model your existing Supply Chain and visualize the “to be” as well as analyze the “cost to serve” and if you like, highlight the trade-off’s between the Sustainable impact and the cost.
It can provide faster business growth
Systemizing your inventory management from an” inside out” perspective to an “outside in” by focusing on customer service instead of traditional approaches decrease key issues like stockouts and overstocks. It helps you with more accurate inventory. Streamlined workflows and processes can be scaled up easily, leading to faster business growth.
Simultaneously you can expect a reduction in lost sales and markdowns due to increase in on-shelf availability. Reduced time between ordering and fulfillment has a positive impact on customer satisfaction. Increased customer service and the right product mix drives sales revenue.
It can reduce costs
Automating your processes and freeing up time means reducing expediting and operating costs. With data driven inventory decisions you can replace excess inventory with data to drive better performance. You can reduce your inventory with 20-30%. Simply because you can put the right products in the right place at the right time for more efficient order fulfillment. You are also able to develop a smarter assortment and stock mix.
It can improve agility, better decision making & collaboration
With the right platform you can easily respond to market changes. Reporting and forecasting tools can be used to make smarter, data informed decisions. Having a centralized source of truth for data enables transparency across teams and customers, while it raises motivation to go that extra mile.
We could say that the processes, behind the technology, should bridge the organizational silos and make up the decision center for a forum that unites decision makers to solve business criticalities.
It can help close the gap between Finance and operations
Companies, which are taking this even further also want to close the gap between Finance and Operations and make the Supply Chain data an integral part of the company’s planning and forecasting processes. They want to make their financial controlling processes an unlimited interaction with stakeholders across the business.
Would you like to know more about end-to-end Supply Chain planning then we suggest that you download our whitepaper right here.