Managing Supply Chain Complexity – Applied Forecasting

Advances in supply chain planning over the last couple of decades have provided companies with the ability to shape not only demand, but also supply. By leveraging solutions in strategic planning, inventory optimization, demand management and optimized planning and scheduling, todayâs leading businesses are able to improve profitability and exploit competitive advantages.

Nearly all best-of-breed planning solutions are composed of multiple applications, each with its own functional capabilities, designed for power users working within a particular area of the supply chain. The proliferation of these highly specialized applications introduces a level of complexity that challenges the ability of corporate executives to analyze, coordinate and manage the many activities associated with the planning process. For example, analyzing a âwhat-ifâ scenario that looks at the impact of running a large promotion in an overseas market often requires coordinating activities across a number of departments and people. One possible approach to this scenario might involve someone working in an advanced forecasting tool to generate a causal based demand plan. The output of this effort is then be sent to a number of different supply chain planning applications to determine production capabilities. For instance, someone working in an inventory optimization tool might need to determine ideal stocking levels to support a given postponement strategy. The inventory target levels from this analysis might then be sent to a strategic planner, working in an entirely different application, to determine the ideal sourcing strategy for order fulfillment. Of course, the net impact of the above scenario requires an integrated analysis of the performance metrics since the planning data is generated by a number of different applications.

The task of synchronizing and tracking the multiple activities associated with scenario analysis can be cumbersome and time consuming. Often times supply chain executives do not have the time to learn power user applications and struggle with coordinating and visualizing data from multiple planning systems. Additionally, the process of distilling the data into a format that can be easily understood and acted upon by senior executives introduces a certain amount of latency, because it takes time to transform the data into actionable metrics.

Today, most decision makers rely on a combination of e-mail, spreadsheets and summary level presentations to brief executives or to monitor the health of their supply chain. What type of approach do you use to coordinate your supply chain activities? Do you have real-time access to critical performance metrics that drive your business decisions?

Check this blog over the next few weeks to see how OracleÂ® Advanced Planning Command Center can help you better manage the supply chain planning process.