Touchless supply chain planning – competitive differentiation
Blog: Capgemini CTO Blog
For many years, multi-national enterprises have had to deal with disruptions caused by climatic, political, economic, and biological events; with regulatory changes; with sudden demand fluctuations; and with stockouts and high inventories, caused either by those fluctuations, or by inefficient inventory distribution.
Processes and systems are often inconsistent and outdated: they can be disconnected, requiring manual effort to make them work. This inconsistency can result in long cycle times, and also in lack of visibility across the full supply chain – and if you can’t see, you can’t plan or prioritize.
At the same time, enterprises have to deal with the complexities of evolving portfolios and business models, and as a result, the scientific rigor that is needed for planning often takes a back seat.
All of these are perennial problems. In recent years, though, they’ve been joined by other challenges. For instance, it’s a given that nowadays, customers are more connected, and that they expect greater and more instantaneous choice, and a more personalized service offer. As a result, pressure and fluctuations have increased across product segments that can be hard to contain.
What’s more, lockdown has altered buying behavior and hence sales channels. With the growth of direct-to-consumer channels and of subscription services, fulfilment models have often had to morph into something that is certainly new, and probably more complex. It has been disruption on a scale that has not been seen before.
In short, if it was difficult before, it’s even more so now. The more recent challenges have increased those long-standing pressures on inconsistent, outdated infrastructure. The center cannot hold. Supply chains can’t cope. How can they not only resolve these issues, but turn them to competitive advantage?
Fundamental, sustainable transformation
If organizations are to meet and manage the demand on both the supply side and the demand side, they could make incremental improvements to existing processes, but the chances are high that these changes will soon be overtaken by events, and the business will constantly be playing catch-up.
What’s needed is a more fundamental and sustainable transformation – a shift to a supply chain planning model that is comprehensive, smart, and frictionless. When processes work together as one, and when everything is visible, plans can be made for circumstances that are anticipated, and they can be adapted swiftly and flexibly if those circumstances change.
The characteristics of touchless planning
The defining principles of touchless supply chain planning include:
- Reducing manual touchpoints, and both reducing and improving individual decisions through advanced analytics, automation and business rules
- End-to-end supply chain visibility, powered by predictive intelligence and digital twins
- A tiered organizational model with a well-defined, consolidated hub, and local responsibilities
- Short planning cycles enabled by concurrent processes
- An ecosystem of partners, with known and quantified capabilities
Operational and customer benefits
A frictionless planning model with these characteristics provides competitive advantage. Operationally, it enables organizations to work seamlessly with multiple providers and partners at an optimum cost, and to make the most of the best resources on a global scale. Information and physical inventory flow seamlessly between them, and their interactions are augmented by artificial intelligence.
The workforce is digitally augmented too: the majority of processes can be run concurrently without manual touch points, leaving planners to focus on exceptions, where their own direct input adds most value . For example, they can take advantage of predictive analytics to identify and act upon risks and opportunities, harnessing data that can now be drawn from across the extended enterprise.
But that’s not all. While the operational benefits are both considerable and welcome, the real differentiator in touchless supply chain planning is the effect it can have on customer relationships. When processes are seamless, and when information drawn from across the supply chain is shared, interpreted, and actioned, organizations can work with their customers to create personalized experiences that meet their individual needs and expectations, and fulfilment models can flex around customer requirements to make things happen.
In the next article in this short series, I’ll be looking in more detail at how touchless supply chain planning differs from traditional planning approaches.
To learn more about how Capgemini’s Touchless Supply Chain Planning can transform your organization to drive enhanced customer experience and reduced cost, contact: sandip.sharma@capgemini.com and shaun.cheyne@capgemini.com
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