We are currently living in a new world following the major economic disruptions caused by the COVID19 pandemic. Supply chains worldwide have been altered in many unpredictable ways and now the entire landscape of business has changed drastically.
Traditional demand planning using statistical methods to determine the best actionable forecast is falling short for many businesses. This is because the mathematical algorithms that are widely used put a heavy weight on recent history, which in the current world situation may not be useful when we need to understand post pandemic demand in the ‘new normal.’
AI / ML
We are entering a new era in software as companies begin to incorporate AI into their products and solutions. The new technology promises easier and faster forecasting, thanks to machine learning algorithms that can automatically adapt to improve statistical projections.
Right now, we can more accurately predict demand, find trends, and model scenarios. Continuously improving forecasts will reduce the need for expert management of planning systems while reducing error and bias; imagine what that could mean as AI continues to evolve.
Anaplan PlanIQ with Amazon Forecast, based on the AI/ML technology that Amazon developed to forecast for its enormous retailing operations, can be an easy-to-deploy alternative to traditional stat forecasting methods with tons of upside. We are expecting that more and more of our clients will see the inherent value of this and elect to incorporate PlanIQ into their new and existing business systems.
In many industries, the recently unpredictable economic environment has shown that demand sensing is a legitimate best practice in supply chain management. During the pandemic, systems that were not designed to react to short term demand signals were responsible for enormous unnecessary losses. Many companies that had long term plans to add demand sensing to their forecasting processes have found it to be prudent to accelerate their plans. This is because traditional historical signals that used to predict future sales have become unstable when viewed across typical 2-3 year time frames.
Demand sensing helps an organization to focus on, and respond to short term signals, thereby avoiding the trap many other organizations have fallen into that has led to significant error being introduced into their supply chains.
Product Information Management
Mostly during the last 2 decades, there has been a constant proliferation of collected data related to items and products; both in character and volume. It comes from a plethora of new sources, making it constantly more difficult to manage the system-to-system flow of this crucial data.
One of the most persistent challenges I have encountered is that companies tend to underestimate the importance of, and the level of effort needed, to properly manage master data across disparate systems. Many of the costliest mistakes in supply chain management cannot be ameliorated without good product master data.
For example, because of increasingly accelerated product lifecycles, rationalizing SKUs has become a more critical activity in leading organizations. Identifying duplication in product lines and quickly addressing underperforming products is now becoming a best practice.
When analysts are forced to spend time wrangling product data, they lose focus and wind up spending less time creating actionable information for the business. Solid MDM (master data management) and PIM (product information management) systems are therefore becoming more evolved and commonplace as critical foundational components of the solutions to these challenges.
Incorporating serious discussion of various scenarios into decision-making processes will help your company to become a juggernaut capable of outperforming the competition in every challenge. My clients consistently tell me that the scenario planning functionality that we regularly deploy with our Anaplan solutions is the most powerful part of their new process. They find great value when they can easily change the parameters of a situation, simulating different business scenarios, and view the results live, so they can choose the best plans to execute against.
In the post pandemic world, scenario planning is becoming much more ubiquitous, as many companies are seeing the benefits and discovering how easy it is to set up on certain platforms, like Anaplan.
With the Anaplan platform combined with PlanIQ, you can continue your organization’s growth toward mature, industry leading demand planning and supply chain management processes. Ultimately, the companies that adopt these best-in-class technologies first will have the greatest advantage over their competition. Now, in the post pandemic world, more than ever it is the time to invest strategically in the right technologies to support the future and become the most successful business leaders in the ‘new normal’ world.