Reference: SCM World, December 2016
Future business leaders will look back at 2016 as the end of an era.
Both a disruption and a massive opportunity, digitisation, value chain collaboration and a greater need for real-time decision-making are coalescing as a disruptive catalyst to end a roughly five-year stagnation in supply chain planning. This confluence of
factors demands innovation.
This report shares the quantitative perspective of five years of SCM World Future of Supply Chain research in which over 1,000 responses from cross-industry supply chain executives have been captured each year. We have matched this survey data with the most innovative strategy and planning case examples from our community across 2015 and 2016.
Note the tension between the challenge and opportunity as echoed in recent years of our Future of Supply Chain research.
In 2015, a third still call S&OP ‘a necessary evil’. Less than half (42%) say their supporting technology is effective and impactful.
Digital technologies have increased in identified disruption and importance by an average of over 20 percentage points between 2014 and 2016. Most notably, cloud has jumped from 33% in 2014 to 58% in 2016.
Data security is the top risk for 2016 with 30% rating their organizations as ‘very concerned’.
We expect that many will be caught off-guard by the speed of change from 2017 to 2020. The actions of several first movers and early adopters in our community have shown a light on a path forward: the future of planning is concurrency.
Concurrency is the ability of many people to simultaneously and seamlessly scenario plan across multiple time horizons on one unifying system. It is being powered by the recognition that all levels of the hierarchy and every individual has a role in both short-term and long-term planning.
While a simple concept, concurrency is a result of three capabilities.
Simulation: the representation of the behavior or characteristics of one system through the use of another system, especially a computer program designed for the purpose.
On-demand historian: the ability to return back to previous decisions in the exact environment in which they were made.
Democratised decision-making: the ability for multiple parties in different organizations, geographies and levels of the hierarchy to test ideas and simulate different scenarios in virtual environments.
Advancements in supporting technology will allow for more distributed and more frequent simulation both of short-term and long-term scenarios. The speed in which this analysis will take place will actually consolidate horizons rather than drive them apart. As a result, S&OP – in its current form – must evolve or it will be killed off. Leading organizations are using digitization as a unifying platform to marry legacy systems with new digital disruptors to bring concurrency into reality. The change to corresponding business processes and organizational constructs will be massive.
The concluding section of this report presents a six-point action plan. We share the insights from several leaders to demonstrate how a set of practical actions taken in the near term coupled with the right, few big bets will bring the era of several outdated supply chain paradigms.