The key to successful supply chain digitalization management lies in a three-fold strategy: a consolidated, unified demand overview, supply chain segmentation, and intelligent planning and execution. All these elements are strengthened by digitization, analytics, and automation. In essence, digitization involves setting up dedicated master data that pulls information from across the entire supply chain as well as from multiple sources of external information.
Achieving a unified demand perspective
Traditional demand planning methods use consensus forecasting techniques. These techniques involve different departments like operations, finance, trade, and sales using standard statistical techniques to produce their own forecasts. However, these methods can be time-consuming and may not always reflect the most current market behavior.
The concept of a unified view of demand seeks to overcome these challenges. The starting point for this is data.
New approach engages four different data sources:
The combination of these data sources sets the stage for a five-step demand planning process that spans from generating a market demand forecast to comparing the financial forecast with the firm’s business objectives.
Supply Chain segmentation
Traditional operations strategies tend to focus on either efficiency or responsiveness. However, there’s often confusion about when to apply each strategy. At the core of this issue lies the question, “What drives operations and supply chain strategies?”
Data and analytics play a crucial role in determining the answer. By examining a variety of data points, three key drivers can be identified: sales volatility, volume, and margin. These drivers directly correlate to the risks faced by the manufacturer and can guide in forming an effective supply chain strategy.
Intelligent planning and execution
The new age of business planning, powered by data, analytics, and automation, enables a shift from consensus planning to a data-driven approach. Sales and Operations Planning (S&OP), driven by the unified view of demand, now allows for more cross-functional engagements and can cater to different supply chain segments.
Smart planning introduces a fresh perspective to the traditional S&OP process. It leverages digitization, analytics, and automation to generate an unconstrained forecast that’s then converted into a supply plan, guiding the entire firm’s operations.
Moreover, the introduction of Key Performance Predictors (KPPs) alongside traditional Key Performance Indicators (KPIs) provides a glimpse into the future state of the supply chain, allowing for proactive decision-making.
Integrating Microsoft Dynamics 365 Supply Chain Management
Microsoft Dynamics 365 Supply Chain Management is a robust solution that can facilitate thesupply chain digitalization strategy detailed above. It unifies data from various sources, providing valuable insights to optimize your operations and forecast demand accurately. Additionally, it assists in segmenting your supply chain based on critical factors like sales volatility, volume, and margin, ensuring efficient and responsive strategies. The integration of advanced analytics and automation offers intelligent planning and execution capabilities, setting your business up for success.
Are you ready to revolutionize your supply chain? Reach out to OntargIT today for a consultation, and let us guide you through the process of implementing Microsoft Dynamics 365 Supply Chain Management in your operations
