I am sure you have noticed that the younger a child is the less planning they do. A toddler crawls or walks seemingly purposelessly, touches objects curiously and observes intensely. It is all execution with no plans. A lot of supply chains operate in more or less the same way using Excel spreadsheets to “plan.” And when they try to execute, they run into all kinds of surprises and manual adjustments, just like a little toddler, keep adjusting the execution.
As we get older and more sophisticated, we become better “planners,” for two reasons: our ability to form more accurate models of the world around us and to have the ability to make predictions based on our past observations. In other words, we can learn from our experiences. As we become better planners, we need less of being responsive. We still need responsiveness but far less! On a cloudy day we may take our umbrella; and for a trip to airport during the rush hour, we give it some extra time. Predictive supply chain planning works the same way. It has an accurate model of the world (Digital Mirror) and what can go wrong given certain conditions. When those conditions seem to be present, it will plan better because it can predict what is needed resulting in a risk-resilient plan. We all know on Halloween more candies should be made, but learning goes beyond that, it can detect during certain temperature changes some customers in certain regions will be asking for higher quantities of certain items. There are many hidden patterns in the supply chain, especially on the supply side, that the system can detect and make adjustments for accordingly. Hence, less response planning! At what stage is your supply chain planning level? Still at its infancy, doing response planning? Find out more about predictive planning Here.