Supply chain disruptions caused by the pandemic, ongoing labor shortages and recent geopolitical tensions in Europe has put many industries on edge. Vladislav MaliÄević, chief technology officer at Jedox, discusses how technology can remedy the situation and fuel growth.
According to a recent BDO surveyOpens a new window , 84% of companies view it as a moderate to significant business risk in 2022 while 77% view their failure to embrace technological innovation as equally risky. There is a clear need for better handling of overall business planning, including supply chain-related processes. In fact, all aspects of business operations including sales planning, budgeting, reporting and forecasting rely on robust and holistic processes to ensure businesses can confidently handle change in an increasingly uncertain environment.
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How Technology Can Help
Establishing accurate demand and inventory management comes down to overall proper data management. That, in and of itself, has become a top business priority. Doing so involves not only efficiently managing the data generated within the company, but also external data provided by outside sources.Â
Let’s look at a fictitious example of a bakery that produces cheesecake. An ERP system helps identify and manage the inventory of ingredients and may also help in planning the cake’s distribution to retailers. But what happens if there is a trucker shortage that leaves those cakes rotting in the warehouse? Unforeseen events can stall operations with serious consequences. However, equipped with robust forecasting capabilities and predictive analytics, an Enterprise Management System (EPM) can help identify when, where and how to reroute those cakes so they land on the shelf on time by providing granular planning details with just a few clicks.Â
Supplier information and data sources from other ecosystem partners also must be blended with internally-generated data to have a clear view of the business landscape. An EPM system that creates a single source of truth, marrying internal and external data, can help companies do that.
What Proper Data Management Can Do
To ensure your data lakes don’t turn into slimy ponds, data governance must be at the forefront of all S&OP activities. By uniting all data streams and avoiding silos, companies can vastly improve their data quality, which is vital to know when and where to mitigate the impact of disruptions. At the same time, democratizing data by making it available across the organization is equally important.Â
Streamlined data offers benefits to various supply chain activities such as:
Better supply-demand matching
Companies face ever-increasing growth in datasets, which is fast-becoming complex and unmanageable, making it even more difficult to recognize patterns and identify anomalies in the data. AI-based solutions can augment, not replace, human hands in quickly identifying such practices and changes in demand. As datasets grow exponentially, unified and streamlined data can help reduce errors and vulnerabilities for faster and more accurate demand planning. If it takes weeks upon weeks to assess patterns in your data, you won’t be able to meet changes in demand when they arise adequately.Â
Cost and quality improvements
A comprehensive view of business performance with seamlessly integrated data provides a long list of cost and quality improvements. Inventory data stuck in a single department won’t benefit your leadership when they need to make strategic supply chain decisions. According to a recent surveyOpens a new window by CargoWise and Reuters, 69% of respondents claim increased productivity is a top priority in their logistics operations. Technology-based solutions can mitigate the woes of supply chain disruption by increasing efficiency and effectiveness and saving valuable resources across the enterprise. Â
Increased competitive edge
Companies that embrace the capabilities that predictive forecasting offers will not only preserve their competitive edge but increase it. In the case of supply chain disruptions, historical data is essential as the foundation for predictive forecasting to understand the response to previous changes and identify future possibilities. A holistic overview of business metrics such as churn rate, sales forecasts, and more offers powerful decision support for long-term improvements to business performance.Â
Embarking on the digital transformation journey often invokes the cliché of “every journey begins with a single step.†Think big, start simple, and scale quickly. Core functions such as contracting, procurement, supply-demand planning and enabling supplier collaboration are optimal for digital transformation initiatives and aren’t as far off as many organizations believe.Â
Fully Baked Transformation: The Case of Coupland’s Bakeries
Now let’s move on to a real bakery company that dared to embrace its digital transformation journey head-on. Coupland’s Bakeries is one of New Zealand’s largest privately-owned bakeries that has been manufacturing and distributing freshly baked goods since 1971. Coupland’s operates in 25 retail stores and two manufacturing facilities in New Zealand with a product line of 450 items nationwide. With the need for heightened efficiency to meet customer demand, they sought a solution that streamlined their complex production planning processes. Creating Coupland’s 450 products includes highly varied processes across ingredients, bake time, storage facilities, volume, assembly lines, inventory management, packaging, and shipping schedules. The company required a better understanding of the cost and time to bake every product.Â
Coupland’s production team could not obtain the exact cost and time to complete details for its 450 products. Incorporating each aspect of the product’s Bill of Materials (BoM) into the new solution provided staff with a holistic view of each product’s process. The new reports act as a safeguard against any parts of the process that could have been missed while offering heightened visibility into their business-enabled staff. Having this level of granularity all in one place has significantly reduced their inventory management and logistical issues. It has allowed the production team to provide more accurate reporting and forecasting to its stakeholders.Â
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Shrinking Days into Hours: Optimizing the Production Process
Having a BoM made available to crucial production staff meant that changes to the process were communicated immediately to all relevant staff members who could act upon these changes in real-time. R&D and production managers could utilize the reverse lookup feature to understand all products that use an ingredient in the recipe. This meant that any changes to ingredient orders from vendors could quickly be communicated, reducing the risk of over or under-ordering a certain ingredient. More accurate calculations led to better business decisions and performance. Likewise, their quality assurance staff responsible for finished labeling products could easily update the label database based on any changes to the product ingredients by simply refreshing the BoM report. A process that used to take days shrunk to just a few hours.Â
The digital transformation journey continues. Coupland plans to leverage further its digital solution for integrated planning across the organization, expanding into its production planning so that sales data can directly and automatically impact production planning. Having a more integrated planning process will not only improve efficiencies within the business’ operations, but it will also make sure their delicious treats land where they should.Â
The company’s intelligent planning process allows supply chain woes to be more readily mitigated. Technology cannot foresee every event, but it is an integral part of the journey to increase adaptability and reduce the complexities of modern business.Â
What are the biggest roadblocks in supply change management that technology can help overcome? Tell us what you think on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to know your thoughts!