To survive in this new world, supply chain planning leaders should adopt these five important changes:

• Leverage all the data available – There is so much to learn from available data. New housing construction rates directly impact building material industries, but also indirectly impact chemical industries. Health trends give unexpected boosts to new products. Combine your data with other economic and social data to unlock new insights. Cloud platforms now give unprecedented computing scale and enable machine learning techniques to mine many data sources, simultaneously and efficiently. This investment will unlock new understandings that will improve forecasting accuracy.
• Adopt a probabilistic mindset – Nothing is average. It is no longer enough to model a future outcome by a single number. Probabilistic planning involves representing a future outcome by its possibilities and probabilities. The most common example is a demand forecast that is characterized by the expected demand, yes, but also its probability model. Don’t just stop there. Treat planning parameters such as lead times, capacities and cost as probabilistic measures. This more accurate picture of reality will lead to better supply and asset utilization.
• Scale up scenario analysis – Spreadsheets no longer cut it. Stop spending days extracting and building scenarios on ever-aging data. Most organizations cannot afford to do more than two or three what-ifs this way. Build capabilities to run comprehensive sets of scenarios, fed by real or near-real time supply chain data. Some of these scenarios will be purpose-built, specifically modeling business events. However, invest in planning software that can perform repeated sampling of the potential outcomes to build a good understanding of scenario odds. This will lead to more achievable plans and fewer surprises.
• Evaluate risk as well as reward – Most of us would prefer plans with lower risk, even if the expected outcomes were a little lower. Look at your options and evaluate their potential risk as well as reward. Every plan should be characterized by its range of benefits and their likelihood. Risk modeling will invariably lead to better transparency and customer experience.
• Sense and respond smartly – Not all late orders result in fulfillment issues. Not every inventory shortage results in lost sales. Leverage artificial intelligence to learn which disruptions are likely to impact goals and objectives and deploy processes to be alerted early. More time to resolve and resolution options will lead to more cost-effective ways to meet customer expectations.

Together, these ideas all have one theme in common: the need to anticipate what will (or could) happen and plan for it for comprehensively. Any revolution is painful. But this just-in-case revolution will separate the supply chain winners from the losers. Don’t be caught unprepared.

Valerie Tardif, VP, Product Management, Infor