Manufacturers and wholesalers vary considerably in their level of supply chain maturity, particularly in the mid-market. Disruption caused by Covid-19 has forced supply chain businesses to assess their position with a view to accelerating their maturity. Now more than ever, reacting quickly and decisively to interrupted supply, or changes in demand, is key to thriving.
In the context of Gartner’s S&OP Maturity Model, in practical terms; maturing starts with reviewing planning processes. How you collaborate with stakeholders up and down the supply chain and ultimately, pulling the relevant supply chain and planning data into one place. The concept sounds simple, but actually getting this kind of transformation done can be a Herculean task.
Introducing the Logility Digital Supply Chain Platform
The Logility Digital Supply Chain Platform powers decision-making, scalability and transformation across all supply chain maturity levels. It is the best of New Generation Computing Inc., Demand Management Inc., and Logility Inc. intellectual property.
The software uses a mixture of analytics and artificial intelligence to improve operational performance, reduce business-specific data silos, and increase precision. By combining these technological capabilities under a single platform, supply chain firms can improve their inventory replenishment, demand planning, and production schedules in a more orchestrated manner. It lets organisations see the bigger picture earlier than in a disconnected environment and make better decisions.
Why the Logility Digital Supply Chain Platform is great for the mid-market?
Before the pandemic, mid-market companies at stage 1 or 2 in terms of supply chain maturity, relied on relatively basic techniques to drive S&OP managed well. In many cases, they were able to develop static plans that relied on historical transactional data from past cycles to inform current decision-making. Some also enrich their forecasted demand with input from sales channels.
Unfortunately, though, this model broke down during the first few weeks of COVID-19 for many businesses. Suddenly, these companies saw that basic supply chain management strategies were unable to manage unanticipated shocks. They quickly realised the importance of two things: Reliance and Adaptability.
Resilience – Single sourcing strategies based around the lowest cost provider, left many brands exposed unable to meet demand.
Adaptability – Darwin taught us the key to survival is adaptability. In the supply chain, this is less about a turtle growing a longer neck to reach food they otherwise could not, it’s more about creating an environment that allows you to react to the unexpected quickly. With a connected supply chain, information is communicated quicker and by having all the data in one place, arriving at incites and solutions to get ahead of potential problems is much easier.
– A connected supply chain can highlight options to serve a customer that would not otherwise be visible. For instance, options for expediting a product to a customer in a disconnected environment may be limited to shipping the item at significant cost from production, via a regional DC and ultimately on to the customer.
– In a connected supply chain, you have visibility of where all inventory is across the business and can choose to ship to the customer from the nearest branch. Or even reroute deliveries, to reflect a change in the order of priorities. The key difference is visibility and with visibility comes knowledge and an opportunity to take control of a situation.
What we are describing is Integrated Business Planning (IBP). IBP enables a different mindset, giving supply chain professionals the tools needed to think beyond the traditional, Available-to-Promise metric and to focus on the criterion of Profitable-to-Promise. Naturally, this is easier when you can examine the cost to fulfil an order and model the commercial impact of different scenarios. Some day to day decisions can be automated, while others will require exception-based intervention.
This degree of change for manufactures is transformational. Indeed, we have been hearing the term, ‘digital transformation’ a lot in recent years. The beauty of the Logility Chain Platform is you can migrate from one planning component to another, as the business becomes ready for it, without having to go to market for a new system and potentially restart the transformation process again.
Now with vaccine programs being rolled out worldwide to tackle the pandemic, we appear to be in a more stable position and firms have been reviewing how they source and get brands to market. They are seeing demand in a new light – not as something so predictable, but rather stochastic – and are reviewing how they work with suppliers after nearly two years of interruptions and false starts.
The key to solving this problem is to dissolve existing information silos. By adopting cooperative systems to distribute information to the right people, the risk of harmful purchase decisions on the ground is reduced.
The Logility Digital Supply Chain Platform connects supply chain firms in a single, transparent system – a Platform. In so doing, it eliminates data silos and shares all pertinent information in real-time, allowing companies to respond to shocks earlier. Traders can put all the relevant demand, financial, supply and sales information in one analytical environment to enable them to take advantage of opportunities in a way that simply wasn’t possible before.
The Platform allows firms to flow along the stages of the Gartner Maturity model supply chain maturity as and when they become ready. Organisations can effectively integrate their plans and publish them to other enterprises while receiving signals from elsewhere in the supply chain as part of their sensor network. The entire supply chain ecosystem can act as an integrated network, operating in the interest of all stakeholders simultaneously.
Manufacturers are pressing ahead with supply chain maturity
Given the current environment (and the potential for new COVID-19 mutations to keep appearing), firms are looking to mature their supply chains more rapidly than ever before. It is an issue that can’t wait, and this is brought into focus by the increased volume of supply chain discussions in the news and board rooms. We have no idea when the next crisis will strike supply chains. For instance, shipments from China are now taking up to 90 days (instead of the usual 45) and, in some cases, transportation costs have risen seven-fold or even higher.
Firms are also reacting to increasingly aware consumers and new legislation in some regions that require full traceability on imported goods. Brands need to prove they are putting adequate safeguards in place ensuring the goods sourced do not emerge from unethical practices.
All these factors are creating demand to push supply chain maturity ahead faster. The Logility Digital Supply Chain Platform is, therefore, timely. It offers a templated solution that companies can adopt, and tailor as required to accelerate supply chain maturity. The platform helps planners’ sense what is going on in the wider supply chain, reducing the likelihood of shortages and poor inventory management affecting profitability.
Beyond the recovery
Some commentators feel the majority of supply chain issues being experienced today will be relatively short-lived. However, for disconnected supply chains, these challenges represent a missed opportunity. If participants had been able to re-plan for conditions during the height of the pandemic, they would have been able to adapt to new supply and demand signals and steal the march on their competitors because they had the data to be able to make better decisions and demonstrate their resilience to the market.
That’s why forward looking supply chain firms are changing their current position. Leaders in these companies need to:
- Accept changes in workforce, consumers, business operations and technologies and understand how each of these four elements has a material impact on the supply chain itself
- Evaluate the capacity of the organisation to respond and thrive during these shifts, asking whether it has the right technology in place
- Determine whether the business can thrive, as measured by the four fundamental shifts outlined above
Mid-market firms unable to check off all three points without input from third-party solution experts can now turn to the; Logility Digital Supply Chain Platform.