Today’s complex supply chains have many moving parts that can be difficult to synchronize, optimize and digitize. The question is where to start.
Many supply chain related software applications claim they can orchestrate a company’s supply chain, but fall short of this lofty claim. Most often, functional gaps or whitespace exists as the typical supply chain application landscape is primarily designed to plan and optimize a specific set of supply chain capabilities without consideration of many downstream impacts or it may not incorporate the entire end-to-end process. For example, package flows between two sites are planned in TMS, but it is often left to the local distribution site manager to find the best way to manage and execute the inbound receiving and put-away in accordance with local constraints and resource availability. This siloed approach to purpose specific application development inhibits organizations to simultaneously plan across all supply chain functional areas. The result is sub-optimal product flow, increased uncertainty and reduced efficiency.
Even when deploying best of breed solutions it may become difficult to orchestrate product flows across the entire supply chain. As the functionality of each best of breed application evolves at a different rate, incorporating advanced functionality often requires additional integration and testing to ensure that it does not impede on downstream applications. Furthermore, these applications are frequently designed to manage a specific set of supply chain processes, which may not consider or result in actions that optimize the entire supply chain network.
The overarching problem is that supply chains are diverse and complex with many moving parts that can be difficult to synchronize, optimize and digitize, especially with disparate applications each sharing the management of a portion of the end-to-end supply chain process. Unfortunately, these activities often occur with limited or no data sharing or interconnectivity between the various solutions involved in the process.
Supply Chain Optimization Ecosystem
This diagram depicts the gaps or “whitespace” that often exists within the typical supply chain application landscape that needs to be addressed to better enable supply chain synchronization and orchestration.
In this whitepaper, we want to challenge you to evaluate your existing supply chain network. Is it in sync? Is it completely digitized? Does it consider or optimize the entire supply chain process?
If your answer is “no” or somewhere “in between,” some ways to improve and better orchestrate your supply chain include:
- Considering capabilities, constraints and functions that are not yet incorporated into current supply chain applications and are managed through tribal knowledge, manual processes and spreadsheets
- Evaluating the potential to incorporate all supply chain planning and execution functions into a single application (with a common data source) that provides full network visibility including any upstream and downstream impacts
When you consider the whitespace, manual processes and the tribal knowledge that currently exists in many organizations there is often opportunity for improvement. Additionally, when you perform a focused examination and realize that your diverse, applications landscape does not ensure visibility of upstream and downstream impacts or truly balance and synchronize activities across all supply chain functions – you may soon realize it is time for change.
Once you take the necessary steps to fully synchronize the entire supply chain and digitize it then you have the potential to develop a leading edge solution that optimizes and maximizes the full potential of your supply chain. Benefits of such a solution can improve capacity utilization, optimize costs, mitigate risks and improve service.
Increasing Business Need
Supply chain organizations continuously seek solutions that orchestrate and digitize some of the most complex and largest supply chains in the world. Most organizations still have multiple legacy solutions that optimize each process independently, resulting in higher total cost of ownership. Employing multiple systems has grown increasingly hard to maintain and difficult, if not impossible, to synchronize and optimize product movements across all stages of planning and execution. To address these shortcomings, TCS recommends a more holistic solution approach that mimics the philosophy of how a WMS synchronizes and digitizes a single warehouse. As an example, a WMS considers order demand with the capacity constraints and resource availability to receive, replenish, pick, pack and ship for one warehouse. Expanding on this WMS concept, a singular application that incorporates all distribution nodes, all transportation lanes, all modes of transportation, all equipment types, all facility and material handling constraints and all processing capabilities, is required to enable optimal synchronization and orchestration of the supply chain network.
This approach to supply chain orchestration and synchronization is relevant to any supply chain network that has multiple nodes, modes of transportation and possible flow paths between locations that strives to maximize its capacity and capabilities and react to constraints in real-time. Furthermore, while many companies are utilizing best of breed applications throughout their supply chain, there may still be missed opportunities. By combining all network functions and capabilities, along with addressing the gaps and whitespace that still exist in the planning and execution processes, a company is able to better orchestrate and further optimize their network.
Critical supply chain processes that warrant full orchestration and digitization
Orchestration and digitization of the supply chain network encompasses the synchronized, real-time evaluation of all core planning and execution functions. By intertwining these capabilities into a single application, a company can gain the intelligence to make better decisions that optimize total supply chain network efficiencies. This proficiency can be a “game changer” by driving total network synergies and maximizing the planning of network flows and the subsequent utilization of available resources (e.g. assets, equipment and labor).
Additionally, by raising the digitization level of a company’s supply chain through ensuring that any gaps between a supply chain’s planning and execution processes and employed technologies are addressed, a company can become more efficient, interconnected and responsive to business demands.
Yesterday’s siloed and often rigid approach to planning and execution with separate, non-connected processes and applications will not suffice. In order to comprehensively transform a company’s supply chain the following planning and execution components must be fully integrated and digitized in order for full orchestration of the ecosystem to occur.
Optimizing a Supply Chain through Integrated Supply Chain Planning & Execution (ISCP&E)
Proper orchestration of the planning and execution ecosystem provides many capability differentiators and business optimization opportunities. This positive impact is quantifiable in all areas of the supply chain and includes the following advancements:
- Enables more collaborative and interactive demand planning between business groups as they share a common view to critical demand data and can better align on future forecast estimates
- Matches network demand to each node and lane to help facilitate better downstream planning and execution; Helps anticipate day-to-day adjustments of resources
- Provides a mechanism to alert and notify downstream teams in near-time of any significant demand spikes or forecast deviations that may occur as the timeline for execution approaches
Network Flow Management
- Permits the assessment of any network flow plans and impacts on each node; Enables better planning of network resources (e.g. labor scheduling, load utilization) to meet cost and performance goals
- Provides the ability to adjust network flows to best meet customer service commitments given demand volume changes and network capacity constraints
- Enables more collaborative and interactive network flow planning between user groups as they share a common view of network demand thus enabling improved decision making for all nodes
Site Capacity Management
- Proactively evaluates downstream impacts of forecasted network demand and associated planned flows on available network site capacity
- Enables the evaluation of alternate flow options if operational constraints are exceeded or lower cost options exist that better utilize existing network resources and site or equipment capacities
Operational Load Planning
- Evaluates load capacity utilization that results from planned network flows that are created in accordance to forecasted demand; Provides alerts when load capacity falls below or above minimum or maximum thresholds
- Facilitates the matching and selection of optimal size equipment for each load in the network based on forecasted demand, total space required and equipment availability
- Enables the proactive evaluation of any potential flow changes that are made to either help increase load capacity utilization or address equipment short-falls between nodes
Transportation Movement Scheduling
- Supports initiatives to better schedule and balance equipment needs throughout the network based on forecasted load movements which are based on network demand
- Helps reduce empty miles and extra trailer movements between sites to pre-position equipment
- Allows the comparison of any planned equipment movements to planned loads to ensure that schedules meet daily demand and do not exceed or fall below network requirements
Daily Execution Adjustments
- Provides visibility to daily variances between forecasted and actual network demand, so proper resource (e.g. Site Labor, Loads and Equipment Movements) adjustments can occur
- Assesses impact of actual daily demand on available network resources and operational constraints, so contingencies can be made as needed to ensure service and productivity
Benefits of full orchestration and digitization
There are many benefits of taking action to address supply chain deficiencies due to the current segregated planning and execution processes and applications. These include but are not limited to the following:
- Elimination of any whitespace, manual processes and other gaps that are currently not addressed by existing Supply Chain planning and execution applications
- Improved planning and execution results that are enabled through a common system that evaluates total supply chain network requirements and cost tradeoffs
- Elimination of inefficiencies due to multiple planning silos or disparate planning processes and staff
- Reduction of the Bullwhip effect as the impact on each area is visible and can be proactively addressed
- Improved network visibility through a more in-built and intuitive environment that highlights any potential areas of concern and review
- Improved supply chain network utilization and costs due to being able to assess impacts on site resource and equipment capacity due to forecasted demand and the resulting flow planning decisions
Assessing the change impact
As part of a transformational initiative this holistic solution will dramatically improve an organizations ability to plan and manage all supply chain planning and execution functions.
By enabling the full orchestration and digitization of critical supply chain processes that include demand management, network flow management, site capacity management, operational load planning, transportation movement scheduling and daily execution adjustment, a company can realize cost and performance improvements that otherwise would not be possible.
By uniting these critical processes into a singular application that shares a common database and all-inclusive dashboard, an organization can improve overall visibility and transparency across all planning and execution functions. This interconnectedness enables the various planning groups to plan interactively and collaboratively with complete visibility to the impacts of their changes across downstream supply chain functions.
This insight leads to improved customer service and better adaptability to demand variables resulting in increased execution effectiveness and overall supply chain efficiencies.
Making the change from siloed thinking to a holistic vision is a dramatic change and considerable departure from the tried-and-true autonomous processes and systems that have served organizations well in the past, but now are inadequate and too costly and inflexible for the future. Companies that are able to employ forward-looking strategies and platforms that fully digitize and orchestrate their entire supply chain and integrate their planning and execution processes will be better positioned for continued success.
Author – Andrew Crane, Deanna M. Rainwater, Ranjit Rebello
Courtesy of http://www.supplychain247.com/article/orchestrating_the_complex_supply_chain/supply_chain