Almost all supply chain planning vendors use attributes only for finished goods in order match demand to available supply. This is not what Attribute Based Planning (ABP) is all about! ABP is an architecture that allows attaching attributes to every object in the supply chain. And be able to use the value of these attributes to produce an executable plan. This includes suppliers, regions, WIP inventory, equipment, products, customers, transportation methods, packaging requirements, government regulations, carbon footprint on the contract manufacturer or use of commodities by a product, customer or a product and so on.
There is more! Once attributes are defined then the system should be able to use the value of these attributes as dynamic constraints. For example, while generating a plan, the system needs to take into account a “qualified” supplier, using a “super fast” component on a “high” precision equipment so that the intermediate part# has a range of “wavelength” between X and Y.
In order to ensure these requirements, attributes would guide the planning engine such that the correct pegging is made to satisfy the final product. Hence producing an accurate and executable plan. There may be more requirements. For example, especial packaging and mode of transportation as additional attributes.
Attributes can also be used to optimize the plan not just based on cost and delivery performance but also by (say) the commodities that are used by a customer or product, taxes or tariffs for a region, or by a supplier, an equipment or an equipment manufacturer. As an example, if oil prices go higher, the system can minimize the use of oil-based products based on the amount of oil needed to make them. Thus, changing the mix to avoid building products which are not as profitable. By the same token, attributes can identify entities (customers, suppliers, equipment) that are using relatively higher energy than others. Just like optimizing cost and profit, it can then optimize carbon footprint of each site or the whole company every time a plan is generated. To this end, companies can track their efforts to a net zero target.
Attributes prevent proliferation of SKUs. This is accomplished by defining generic products and attaching attributes to the generic SKU to define specific models or variations of the same product. This approach can improve the speed of search and reduce SKU requirements for small or even large variations in products.
Finally, attributes, combined with Boolean logic, are critical for the system to adapt to the changes in business and its policies. As the demand, product mix, or business priorities change then systems need to adapt to these changes without having to re-write the code. Combining attributes with Boolean logic acts like an expert system engine that uses business rules every time it is searching for an answer. These are rules such as <IF Conditions X & Y OR Z True, THEN Do A & B>. This is a very powerful way of changing the behavior of the system in order to adapt to the new ways of doing business. This kind of adaptability is what true Digital Twin of the supply chain requires to have. Otherwise, the “twins” grow apart from each other! What is even more exciting is that these so-called rules (or constraints) can be developed using machine learning techniques automatically. To learn more about ABP and how it can help your supply chains to become more adaptable click HERE.