Collaborative business planning harnesses the power of the global supply chain
We’ve written a lot about how new technologies are building a better supply chain. But technologies such as AI, IoT and advanced analytics can only achieve their true potential if all parties within the supply chain network are working together.
Even the smallest, most well-intentioned decisions made by individual stakeholders can cause catastrophic failures in the manufacturing and delivery of goods. Modern collaborative business planning lets partners on a supply chain work off shared data unspoiled by human misconceptions and misestimations. Automated integrated planning removes bias from supply chain data and creates a single, transparent source that engenders collaboration.
By working off an integrated planning platform and centralizing data for consistency, supply chain partners can forecast with confidence and deliver with precision.
A single source of clarity
Sometimes, the people behind a supply chain inadvertently erect roadblocks in the process. When planning, they often crunch numbers on spreadsheets that are isolated on private servers or desktops. And even though they strive to have open exchanges with their partners, their worldview invariably influences their planning decisions. Input from these decision-makers can help, but if it’s formed in isolation, it can derail meticulous forecasting and planning efforts.
Even the slightest miscalculation from supply chain data created in isolation can hinder the production and delivery of materials. Consider that a large commercial airplane comprises hundreds of thousands of parts — some small, some large — manufactured by hundreds, maybe thousands, of companies. These parts are shipped by land, air and sea from all over the world. An old-school, spreadsheet-dependent approach doesn’t account for unknowns, which could include last-minute engineering tweaks, safety issues and order changes.
This kind of intricate global supply chain requires objectivity, foresight and accuracy. Automated, analytics-driven collaborative business planning provides the visibility, synchronization and optimization the process needs.
Collaborative planning lets retailers, industrial manufacturers and suppliers understand one another and their customers. Because they’re working off the same real-time data, partners have a shared vantage point of the process and can collectively grasp and iron out political decisions, economic uncertainties or anything else that affects the supply chain timeline.
Having time to react to changes puts supply chain partners in a position to keep costs low — an advantage with the price of materials, labor and production increasing. And with automation leading the way, companies will be less inclined to include data formed in isolation and tainted by subjective preconceptions. They’ll let a single source of clarity lead the way.
Out of isolation
In an all-out drive for business efficiency, many companies are knocking down silos and sharing supply chain data with their suppliers and partners. They’re also working with select data services partners that can analyze all sorts of information — such as weather conditions, cross-border wait times, availability and cost of resources, transportation issues, and any number of tangential factors that could disrupt the supply chain — and incorporating that data into the planning cycle.
Companies sometimes make business planning needlessly difficult by letting internal information guide decision-making. But by creating and sharing data in harmony with their partners, they can work toward a common goal: creating and delivering the right product at the right time to the right place. Whether it is a multinational food and beverage company connecting with its supplier and distributors, or an automotive distributor managing vehicles, parts and warranties with dealerships, an integrated cloud-based collaborative planning system is key to connecting the dots.
One of our clients, a global specialty chemical manufacturing company, was limited by multiple demand forecasting data, processes and siloed organizational structure. IBM helped this organization begin their journey to a collaborative business planning process by improving the collaboration between the regional demand planner, statistical forecasting team and account managers to improve the quality of the forecast. Instead of the traditional head-to-head forecasting comparisons and inefficient manual reconciliations, the new planning process focused on building a better forecast with full information sharing.
Together, the client and IBM reimagined the planning process by incorporating unified forecasting methodologies, data governance and shared visibility across the enterprise. Also, the account managers were provided with business rules on when to consider changing a forecast, thereby increasing value-add touches and decreasing non-valuable touches.
Blueprint for success
The transformation to a collaborative business planning organization is a journey, and it begins with defining an operating model that’s aligned to the company’s business goals, strategy and culture. The collaborative business planning operating model provides the blueprint for future state processes, organization and governance, technology, data, metrics and skills needed to transform and deliver the expected benefits. The progression to fully collaborative business planning is made through transitional steps but with a clear vision of what a fully integrated and collaborative business planning looks like.
Some of the key design principles for implementing collaborative planning include:
- Understanding executive engagement and alignment as an ongoing process
- Leveraging industry best practices to standardize process
- Delivering the right metrics and education in order to promote adoption
- Instilling management by exception across processes
- Unifying and integrating across functions
- Centralizing data for consistency
- Using a modular approach for plug and play
- Designing for extensibility (functionally and architecturally)
Learn more about how IBM can help you transform your business processes into intelligent workflows.