In this Supply Chain Matters business process and technology focused commentary, we assess the supply chain management implications brought to reality by the ongoing COVID-19 pandemic, and all to likely business and operational planning challenges in navigating decision-making needs during very uncertain and constantly changing industry and business environments.

More importantly is the need for teams to be able to advocate for surgical investments in more integrated and agile business and operational planning capabilities.  Cloud based systems

 

Background

The COVID-19 coronavirus pandemic has provided a shocking wake-up call for many businesses large and small, particularly in regard to managing, sustaining and enhancing business process capabilities for product demand and supply networks.

As this Supply Chain Matters has highlighted in many recent industry perspectives since the start of February, the virus has exposed weak links, process shortcomings and needs for enhanced supply chain agility and resiliency strategies.

Whether your business or respective supply chain and product management teams reside in consumer products, especially food related products, healthcare and personal protective products, commercial aerospace, high tech, online commerce or other industries, individual supply chains have been disrupted in ways not seen in a generation. The needs for managing subsequent short and longer continuity phases are likely to test existing capabilities, depending upon what more modern business process practices enabled by advanced technologies were previously adopted.

Beyond the immediate crisis are needs for more timely and informed supply chain management decision-making based on the most-pertinent information available, utilizing advanced analytical and business intelligence-based methods.

The frequency of business and supply chain changes are only going to increase because the cascading effects of this virus’s impacts on product demand and support supply networks, not to mention further disruptions in subsequent tiers of your industry’s supply networks, will continue to challenge businesses until some form of a new normal arrives.

In this environment, businesses run the added risk for struggling with disconnected applications systems or siloed information not presenting a consistent reality among cross- functional business teams as well as external partners.

 

Making the Business Case

Prior to the visible effects of coronavirus outbreak, our research parent published our annual 2020 Predictions for Industry and Global Supply Chains. (Available for complimentary downloading in our Research Center).  Our prediction related to applications software and technology investments presumed that this year would provide a high level of business uncertainties and possibly the beginnings of an economic recession in the latter half of the year. COVID-19 has obviously changed that assumption since many Economists already believe that various economies have now reached a state of meaningful or deep recession. However, our assumptions still apply in terms of business case criteria.

Technology investments will therefore be evaluated through the looking glass of mission critical needs, either overall or line-of-business in perspective. Time to-benefit and measurable ROI is crucial, as is mitigating overall cost or potential disruption to the business. That implies that C-Suite executives will shun multi-year large scale transformations, but likely consider surgical business process enhancement applied to compelling business priorities or mission-critical processes, such as operational and supply chain decision-making.  Target areas are likely technologies that enhance access to available data needs across multiple businesses processes, and those that definitively enhance overall visibility and speed of needed decision making.

 

Focus on Enhanced Integrated Planning and Execution

We advocate that enhanced supply chain, along with sales and operations planning (S&OP), or integrated business planning process enhancement investments can best meet the above criteria.

The goals to consider are:

Consolidation of supply chain planning and customer fulfillment execution under a singular decision-process process umbrella:  Consider the ability to consolidate key business financial, sales and operational planning and resource needs within a singular decision-making framework, enabled with advanced systems that enhance end-to-end supply chain visibility, more rapid decision making and flexible response, and scenario-based planning options.   The latter can best be applied to simulating various defined scenarios to impacts to financial, capacity or customer service outcomes. The concept is one of a continuous command center overseeing tactical decision needs with a linking war room process to execute and monitor planning and execution of plans. The former consistently involves key stakeholders in needed decision-making and the latter in integrated cross-functional information response.

COVID-19 effects imply constantly changing developments in the weeks and months to-come and the ability to be able to support both daily operational and week-to-week, quarter-to-quarter tactical decision support needs with the most available and consistent information. The challenge is indeed a continuous net-change planning process framework. That might include needs for inventory allocation for key customers, trimming or suspending certain product categories, or shaping product demand toward more readily available products.

The objective is to anticipate new unplanned developments, clearly understand the specific business impacts, and have scenario options available for the most feasible response to best optimize constraints.

Strive for a singular data model: An integrated business planning process that provides common cross-functional context.  Leveraging technology that provides a common view of the most up-to-date cross-functional product demand and supply chain insights across planning, product management, customer fulfillment, logistics and transportation, both internally and externally.

Augment timely decision-making needs with the ability to leverage machine learning capabilities: Applied to key planning, forecasting and inventory replenishment decision-making processes, machine learning can identify abnormal or unplanned events faster before they become significant. The technology can apply either pre-prescribed automated responses or alert the command center to the need for planner intervention or executive decision-making related to response options.

Flexibility in technology pathways and needed augmentation: Consideration of a Cloud-based enterprise and supply chain management applications suite providing industry competitive technology that can provide the business the flexibility for managed-scope, phased process augmentation that mitigates any business disruptions. The analogy is one of a technology utility, where surgical investments can be enabled over a time period that meets business and organizational needs. SaaS based applications further avoid the need for added capital expenditures, owned IT and data management infrastructure, along with their in-house associated support services, which is a further cost reduction consideration.

A further critical consideration, especially now, is ease-of-use and intuitive look and feel aspects in interacting with advanced technology, especially with more planners and executives working remotely, or in needs for people to perform back-up roles.

 

Technology Market Options

The good news is that today’s best-of-breed or Enterprise applications technology market is more focused on Cloud based applications suites tailored to support more integrated business and supply chain operations planning. There are many options available, with enterprise technology providers able to provide broader business support functions in a single suite.

Last Fall, this Editor attended the Oracle Open World 2019 conference and shared perceptions of that event on this blog. One specific blog focused on Oracle’s SCM Cloud update, specifically the announcement of an application that caught my attention, that being Oracle Integrated Business Planning and Execution.

This software applications technology designed to integrate elements from Oracle Enterprise Performance Management (EPM) Cloud and Oracle Supply Chain Management (SCM) Cloud platforms. Oracle Integrated Business Planning and Execution was purpose developed as a singular platform to support end-to-end enterprise and supply chain planning processes in a singular data model. The platform is augmented by advanced artificial intelligence and Internet-of-Things (IoT) capabilities to support extended supply chain visibility, identify any anomalies and to enable Monte Carlo simulations of business scenarios utilizing a singular enterprise, supply chain and product data model. The platform can support broad tactical planning involving continuous product, engineering, customer demand and supply plan reviews. Sales and marketing team members have the ability to search existing customer leads and orders to assess priorities and financial impacts. Even the company’s CFO has the ability to run simulations and financial analysis on the same data model. The final result is one company plan, accessed by all pertinent decision-makers or stakeholders.

For further information, Oracle has produced a video describing this newly released capability.

 

Our Takeaway

Indeed, the implications brought to reality by the ongoing COVID-19 pandemic, and the now ever apparent businesses and operational planning challenges expected over the coming months and quarters do require consideration for surgical investments in more integrated planning and customer fulfillment capabilities. Now, more than ever, the need for more agile and best-informed decision-making is critical for business and supply chain continuity.

 

Bob Ferrari

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