Realizing The Power of Advanced Analytics in Supply Chain Planning

In responses to the survey for our upcoming research report, Supply Chain Planning in The Cloud, SAPinsiders highlighted advanced analytics capabilities as the top technology when the current state and immediate next steps timeframe are considered together, as shown in figure 1. As you can see from figure 1, SAPinsiders have indicated that they have started building capabilities in foundational aspects like advanced analytics and those who not done it yet, are actively evaluating it. Some planning processes like S&OP and ATP that have been leveraged for a while also show high adoption in the current state. The key finding here is that almost 50% of respondents are actively working on integrated advanced planning capabilities that leverage cloud capabilities. Figure 1. Technologies to address planning requirements Source: SAPinsider research July 2022 But a key aspect to understand is that advanced analytics capability should not be viewed necessarily as a standalone technology capability. This is where many advanced analytics initiatives go wrong. Any form of analytics, including advanced analytics methodologies, are essentially extensions of other capabilities, like supply chain planning technologies to create enablers. Let us consider the example of the technology just below advanced analytics in figure 1, integrated advanced planning, or sales & operations planning (S&OP). These are more obvious examples of my statement that advanced analytics is an extension of many other technologies. While even simple KPIs and metrics can be characterized as analytics, advanced planning incorporates almost all the three key forms of analytics- descriptive, prescriptive, and predictive. Devoid of analytics capabilities, these tools will not exist. Steve Birgfeld, VP of IT & Services at Blue Diamond Growers, highlighted an example: " Insights from our suppliers on delays that may impact supply planning. If delays, what actions can we take to meet or adjust customer commitments?" As you can envision, while actual delays are descriptive analytics, potential delays can be predictive through predictive analytics, and potential actions that can be taken can be determined by prescriptive analytics methodologies. But think about centralized data lakes and repositories, the next technology in the chart in figure 1. Another interesting insight that emerged from the survey was one of the top strategies SAPinsiders have in mind when it comes to strategies for building planning capabilities in the cloud. Though the foundation, data does not speak to you until you plug it into the extension of analytics. Cloud certainly allows you to build data lakes, hubs, and repositories that are agile and flexible, but the value gets generated through insights. And the imperative for real-time insights was one of the top business imperatives identified by SAPinsiders. You can keep going through the list and realize that while it is sitting on top as a separate technology capability, it is helping extend the capabilities of all other technologies in some form. The key lesson here is to use this to understand how you can extend the capabilities of many of your existing technology solutions beyond the arena of supply chain planning as well. Technology today allows you to bolt on any form of advanced analytics that is not pre-built into off-the-shelf tools as well. Leverage it to extend your technology capabilities in a way not possible before. the good news is the enterprise solutions today, take SAP BTP as an example, integrate AI, ML and analytics seamlessly as an extension of many different capabilities and functionalities. You will see more and more off-the-shelf solutions in conventional areas that highlight aspects like "AI-enabled". Essentially, these solutions leverage AI, ML, and advanced analytics to extend their capabilities and features.