As my smart watch reminds me to step away from my computer and move more today, I wonder: how did I function without this device? Just this week, it has reassured me that my resting heart rate is good for my age, assessed the quality of my sleep, allowed my wife to contact me to remind me to get more apples while grocery shopping, and helped me find my way back to a hiking trail when I strayed too far from it.
It’s as close to a personal assistant as I’ll ever get, given my lack of celebrity status.
But most importantly, it allows me to better plan and live my life—gathering and coordinating information from many disparate sources. I used to spend so much more time staying organized and chasing down random tasks.
I’m ruminating on my smart watch because it does for me in a small way what Intelligent Planning does for so many of my supply chain clients in a much larger way. It enables more informed, holistic decisions from multiple data sources at a speed never possible before.
For those of you not familiar with the term, Intelligent Planning means using a data-driven approach, along with advanced analytics and Artificial Intelligence (AI), to determine the best path forward for your company—in this case, in the supply chain. Let’s look at a tale of two supply chains—one that doesn’t use Intelligent Planning and one that does.
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A tale of two supply chains
Company A is a fairly traditional aerospace and defense company. The operation teams use ERP as their sole planning engine. With limited connections to their ecosystem, visibility is limited in terms of timely delivery by suppliers, partner capabilities and whether suppliers can meet their commitments.
When this team plans for its supply chain, they create one plan based on what they want to do, relying on multiple spreadsheets filled with historical numbers. And these spreadsheets come from siloed areas of the company that don’t integrate their data. Company product priorities can’t really be linked to their ability to manufacture or not.
Their speed of calculation is not competitive. Their traditional ERP planning engine runs overnight or over the weekend. Then they spend a few days looking at the implications and another few days to make decisions. Planning scenarios for any given product line can take as much as a week.
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When scenario planning, Company B uses an advanced AI tool. It takes roughly 30 minutes to do what took Company A an entire week to do.
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Company B, on the other hand, is an industrial company. It uses an integrated platform for supply chain planning. It has a line of sight into Tier 1, 2 and 3 suppliers with an ability to connect with their systems and data. When the supply chain senior executives need to ask Tier 1 if they can deliver on certain materials, they can get a real-time answer showing potential constraints—and they can do the same with critical Tier 2 and 3 partners.
When this team plans, they analyze different possible scenarios that are generated using integrated real-time data from their entire ecosystem, as well as from their own company’s integrated data. During COVID-19, they’ve been able to see within minutes the implication of shifting product demand and moving manufacturing from one location to another. Because they’re also connected with their customers’ systems (retailers), they can lock down customer commitments for supply more accurately.
When scenario planning, Company B uses an advanced AI tool. It takes roughly 30 minutes to do what took Company A an entire week to do. Company B can run multiple scenarios for multiple products on a Monday morning and view results by lunchtime. As they do this, they compare scenarios to optimize their supply chain performance for best cost, service and more.
Intelligent Planning as competitive advantage
We’re living in cost-conscious times as COVID-19 creates economic compression. But Intelligent Planning provides a competitive advantage in these difficult times.
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Are actively building concurrent supply chain planning and execution to transform their existing supply chain into one that drives customer-experience-led growth.
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The companies that are building supply chain concurrent planning and execution right now via Intelligent Planning are the ones that do have a distinct advantage in speed and value. Trust me, I see it every day.
Competitive advantage can mean new growth or savings generated to fuel growth. Using AI to accelerate planning and make better decisions is one way to do that. For example, a U.S. defense contractor worked with Accenture to pilot and subsequently quickly scale a suite of RPA bots across a number of use cases to automate myriad time-consuming, data-intensive tasks across the supply chain. For instance, one bot is responsible for navigating SAP, automating the documentation process and sending records to buyers. Another oversees submitting information on defects to suppliers and updating the ERP system with the RMA number that’s sent back. A third ensures lead-time accuracy by comparing promises to actuals and using that information to determine schedules for parts. These and other bots dramatically reduce human handling time, effort and error, cut cycle times and improve material availability. By their fourth year in operation, the bots collectively returned more than US$100 million in net run-rate savings.
If you’d like to learn more, I’ve recently co-authored a research report with far more detailed information on Intelligent Planning for industrial, aerospace and defense companies.