Overcoming Supply Chain Issues with Automated Planning

Supply chain difficulties have stymied manufacturers for two years. Yet there are ways to alleviate some of the issues. Many manufacturers have found that automating the planning process can help. Automated planning can extend beyond the finance department. Supply chain disruptions are just one example of the need for agility in planning.

According to McKinsey, automation and AI-based solutions in planning can deliver higher productivity and improved business performance. In manufacturing, automated processes can enhance resource allocation, whether that involves materials, equipment, workers, or logistics. Automated production planning can be used as a future-proofing platform to provide the agility to respond immediately to unexpected events.

We caught up with Chris Stiebel, a regional director at the enterprise performance management company, Jedox.

Design News: What are some of the processes that can benefit from automating planning? Production? Supply chain? Labor distribution? Equipment allocation?

Chris Stiebel: When you automate planning, the benefits are very closely related to and even driven by efficiency. The effects of automation are then seen then in production, supply chain, labor distribution, and equipment allocation.

Unsurprisingly, this type of automation can be applied to virtually any department, function, or process. For example, a huge benefit is the basic collection, aggregation, and consolidation of data from various source systems. This process is still managed in many organizations using Microsoft Excel. Similar to this example, a lot of time is wasted performing manual tasks that are easily replicated and could therefore be completed autonomously by a simple program or even by utilizing artificial intelligence.

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DN: How has this planning been done in the past?

Chris Stiebel: Interestingly enough, a considerable proportion of planning still takes place today in Excel. According to recent surveys, more than 80% of organizations are still reliant upon Excel for budgeting, planning & forecasting. This is true for traditional budgeting and forecasting as much as it is for other business planning processes.

DN: What are some of the downsides to past ways of managing manufacturing and warehousing?

Chris Stiebel: Historically, planning and reporting for the manufacturing and warehousing sector (much like most sectors) have been carried out in a very manual way, utilizing data from multiple disconnected systems and data sources and a heavy reliance upon Excel and/or legacy systems. Numerous manual processes are used to consolidate and aggregate data.

Global automotive manufacturer and supplier Magna mentions that they were once reliant completely upon Excel for budgeting which they quoted as “...not advantageous for a large and multinational enterprise. Our budget preparation process is complex and repetitive, requiring a large amount of labor and material resources. When faced with long budget cycles and budget version controls; accuracy, timeliness, and transparency suffer.” This inspired Magna to look for a smarter, more efficient alternative to manage its complex planning.

DN: Explain the benefits of automated planning.

Chris Stiebel: The primary driver for automation is efficiency. What we can save in terms of time and resources on simple, transactional tasks, we can invest in other, more complex, and value-added areas instead. Automation also helps reduce the inherent risks of error associated with manual processes. An additional benefit is the granularity we can achieve through automated tasks; the granularity is far better than if we were to do the same process manually and with no impact on speed and efficiency.

For Magna, with their newly upgraded planning solution, they were able to make measurable progress in their digital transformation journey. Having a modern, automated solution allows them to make maximum use of one platform and helps Magna to transfer planning knowledge and experience they already have onto a modern planning solution that can be used on Excel, the web, and mobile devices. In the published customer story, Magna states, “We have now completed the integration of annual budgets and quarterly forecasts, regularized all the logic, the effect is obvious, and our expectations have truly been met.”

DN: Explain the process involved in automating planning.

Chris Stiebel: It depends highly on the desired outcome and the ambitions of the organization. But one key message to always keep in mind in these types of endeavors is to think big, start simple, and deliver quickly. First, you should evaluate your current situation and your desired outcome. Then start to create a roadmap. Then you can examine the market for a tool that suits your needs and roadmap. Several tools support automation, collaboration, and transformation. You can find the one that suits your needs best. Be sure to choose a modern tool that is as future-proof and forward-looking as possible to ensure your organization can be flexible and easily respond to changing markets.