Evolution of Supply Chain Planning Systems

We often hear the lingo " evolution of solutions" in technology parlance. This is used across solution categories, including supply chain planning solutions. A question that many often have is- what exactly does evolution mean in the context of supply chain planning solutions? We will explore the answer in this article. To start with, let us review some of the high-level supply chain planning categories. They are shown in figure 1. These are the examples of planning sub-areas that we will explore in our upcoming July 2022 SAPinsider research focused on supply chain planning. If you want to participate in this research, please provide your inputs through this survey: https://lnkd.in/gMg3DAUu Figure 1: Supply Chain Planning Sub-areas If we review these sub-categories, we can see that with the exception of one bucket, others have existed for decades. Yet, organizations often complain that they do not have the tools to address planning needs. Are these complaints not valid? Often, they are valid. The thing is, supply chain challenges and complexities continue to evolve. Planning tools and solutions in these sub-buckets definitely have also evolved over the years to catch up. There is often a slight delta where solutions are trying to catch-up. This process of catching-up is what is called evolution.

What Does Evolution Mean From a Planning Solutions Perspective?

If you consider inventory planning and optimization tools as an example, these solutions still do what they used to do 30+ years ago- help manage and optimize inventory. But these solutions did not address all the needs in their early avatar. Like solutions in other planning sub-categories, there were many factors that constrained these initial versions- lack of computing power, technology, and sometimes, creativity. Some of those needs were obvious and simple. As an example, optimizing inventory for a retailer with thousands of SKUs, at SKU level would have been computationally impossible in the early days. And that too at the single echelon level. Hence, in the world of supply chain planning solutions, the evolution happens in the form of embedding real-world planning nuances into these tools. And of course, advanced analytics has played another key role in helping these tools evolve. Advanced analytics and emerging technologies and smart physical bots can take supply chain planning to a whole new level. The fact is, the time may be right for some leading solution providers to start exploring a "free form" end-to-end supply chain planning solution. One that is not designed for a specific sub-bucket of planning but is actually algorithm agnostic. some versions of this, though at a rudimentary level, already exist. As I envision it, the full-scale solution is essentially a deep learning-powered solution that just crawls over the enterprise data and monitors, plans, and manages supply chains. That, however, is the future. But coming back to the present, we will explore how SAPinsiders think about the evolution of these planning categories and many other aspects of supply chain planning in our upcoming research report. If you want to participate in this research, please provide your inputs through this survey: https://lnkd.in/gMg3DAUu