RESEARCH REPORT

In brief

In brief

  • For companies emerging from the peak of COVID-19 disruption, future growth depends on their ability to pivot to intelligent, data-driven planning.
  • Increasingly volatile demand makes planning even more difficult for program-based companies with already complex supply chains.
  • To respond, organizations must focus on integrated planning to break silos; new technology, data centricity and digital skills.
  • A scenario-based, data-driven planning approach will give companies the insights and flexibility to handle uncertainty and improve performance.


Reinvent supply chain planning

As the disruption caused by COVID-19 subsides, manufacturing operations are resuming, and supply chains are beginning to stabilize. For industrial and aerospace and defense companies, careful planning will be critical to ensure that they can pursue their growth goals moving forward.

Yet for organizations in this sector, planning is not always easy. Changes in customer requirements, a fast-shifting regulatory landscape and the complexity of supply chains makes it difficult to predict product demand, especially for products with longer lifecycles.

Plan for a better future

It’s not just external factors that make planning difficult. Companies in this sector continue to rely on outdated approaches to planning. The result? An inability to predict future demand or model alternative scenarios.

69%

have yet to prioritize anticipating and reacting to supply chain events to protect the customer experience.

To improve their planning and business outcomes, aerospace and defense organizations will need to focus on four key areas: governance, technology, data and skills.

Break down governance silos

In a program-based industry with multiple stakeholders, planning needs to span engineering, procurement, manufacturing and the supply chain. Currently, it’s not uncommon for these parts of the organization to work largely separately from each other.

Breaking down these internal silos will be vital for aerospace and defense organizations looking to plan effectively across their entire organizations and supply chains. And it’s not just internal silos that need to be removed. Upstream supply chain partners should be included in the planning process too. This ensures that they are better placed to meet any changes in demand.

Only 33% of aerospace and defense executives are actively collaborating to innovate unique customer experiences.

Excel with future tech

Aerospace and defense organizations will also need to rethink their current approach to technology if they are going to improve their planning capabilities. Specifically, they will need to break free from legacy ERP systems and reduce reliance on Excel. More powerful digital tools are available that can make the planning process far more integrated, intelligent and agile.

There’s still a place for the ERP system in this scheme, but it needs to be complemented by a range of other tools. What might this look like? An organization could, for example, employ a visual analytics capability that displays key performance metrics, giving leaders easy access to the information they need to make decisions.



A new approach to data

These metrics, however, rely on good quality and consistent data. And although aerospace and defense companies have access to more and higher-quality data than ever before, they struggle to source data correctly, or convert it to a form that allows for actionable insights.

Data is typically generated and stored across an organization – in the ERP system, the Product Lifecycle Management (PLM) system, and offline in manual spreadsheets. To make the most of disparate data, organizations need to pay close attention to data management, and establish clear protocols for governing how data is stored and categorized. This will ensure data analysis can be performed faster and with fewer mistakes.

Data quality and the cadence with which data is refreshed are important too. Technologies such as RPA can massively reduce the need for manual intervention, improving data quality while also increasing efficiency. At the same time, companies need to establish a refresh process appropriate to how far forward they are planning: short-term programs require more frequent refreshing than long-term programs.

With the right data in the right structure, aerospace and defense companies will be able to model supply and demand with much more certainty.

A data-driven, scenario-based approach to planning gives companies the insights and flexibility they need to more deftly deal with uncertainties and unexpected changes across multiple planning horizons, and improve their overall business performance.

Plug the skills gap

As companies reinvent their supply chains, they will need different skills in their organization to manage and carry out these changes.

Digital fluency is a must to make the most of insights derived from analytics and data. End-to-end planning skills are also key, and they will need to be supplemented by supply chain architecture skills.

How can organizations ensure they have the skills that they need? Training existing workers will obviously be important, but training will need to be supported by strategic recruitment of workers with the necessary skills. Leveraging the specialist skills offered by ecosystem partners can also be an effective and inexpensive way to plug the skills gap.



Four steps to reinvent supply chain planning

For industrial and aerospace and defense companies emerging from the peak of COVID-19 disruption, future growth will depend on their ability to pivot to intelligent, data-driven planning. To reap the benefits, leaders must move rapidly and decisively, and consider these four key steps:

Confirm planning decisions

Determine the right level of the organization, the right time horizon and the right information.

Source and categorize required data

Find and organize the right data for the analytics that will generate deep visibility into operational performance and to target high-value areas.

Attack pain points

Address areas with the largest imbalance between supply and demand, those that have the greatest impact on planning and business outcomes and where a lack of collaboration among organizational silos is the root cause of planning issues.

Establish governance, resources and tools

Embed new ways of working and sustain the journey toward an agile, data-led planning organization.

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Stéphane Crosnier

Managing Director


Simon Thacker

Senior Manager


Christophe Dolet

Managing Director


Xavier Lockhart

Consultant

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