Planning from the Edge

Everywhere you turn, there is data being generated, captured, and consumed. Time spent on smartphones and tablets is on the rise, and more people are getting their news and information online and via social media. These clicks, views and comments can be aggregated and analyzed to uncover trends and insights; however, the question is how are companies using this data?

According to the SCM World Future of Supply Chain survey 2016, the use of social media as a planning input has grown substantially. In just four years, survey respondents indicated that they have increased how they are using this type of data within their businesses:

  • Source of real-time customer feedback (73 percent in 2016, vs. 56 percent in 2012)
  • Potential supply disruptions (59 percent in 2016, vs. 41 percent in 2012)
  • Inform product enhancements/innovation priorities (58 percent in 2016, vs. 46 percent in 2012)
  • Shed light on social/environmental/labor practices at a country and company level (52 percent in 2016, vs. 33 percent in 2012)
  • Help forecast demand for “hot” products (51 percent in 2016, vs. 39 percent in 2012)

Social media, of course, is just one of several types of data that have the potential to provide valuable insights into your business operations. Sensor-enabled devices and equipment, along with Internet of Things (IOT) technology, enable you to receive data – tracking everything from usage, movement and condition – across all nodes of your supply chain, including machines on the factory floor, delivery trucks in transit, pallets on the warehouse floor, point of purchase, and in some cases, ultimate consumption. But figuring out how to use this information and integrate it within your planning and execution processes can be a challenge.

SCM World’s The Digital Transformation Directive report introduces a framework that companies can follow to approach these types of digital transformations. The report suggests viewing your planning applications in three groups: the core, process and edge. The report recommends:

“From a planning perspective, the end game involves digesting the right information from the Edge, where things like social media analysis, third-party risk information data services and machine data from production equipment and delivery vehicles are generated. Planning, which starts at the Core and represents the most business-centric view of supply-demand balancing, must select and analyse data from these Edge applications, while maintaining reliable ongoing feedback cycles with Process Applications that run the business.”

This view of a connected planning landscape, which covers both strategic-level planning like network design and more granular planning like daily production scheduling, underscores the importance of data governance. The ability to sense changes in demand and supply based on information or analysis of data gathered from the edge, and have that data incorporated into your planning processes can make it easier for you to connect to your consumers’ unique needs, while at the same time reducing costs and waste across the supply chain.  Importantly, consuming information from the edge does not require a wholesale replacement of your core supply chain planning and execution systems. Smart companies are augmenting and enhancing their processes and solutions to digest the signals from the edge to enhance agility and ultimately drive competitive advantage.

To learn more, download the Digital Transformation: The Planning Challenge report, view the infographic or register to attend the SCM World webinar on Tuesday, March 21, where SCM World’s Kevin O’Marah and I will be discussing practical approaches to tackling disruptive technologies at the C-suite.

Additional recommended resources:

How to prepare for future changes in manufacturing planning

How to deliver an always-on supply chain

How manufacturing planning can help you profitably address supply chain complexity

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