Why is it time to start thinking about digital supply chain planning?

The term ‘digital planning’ is increasingly being mentioned in connection with supply chain management. So what is digital planning? Why the recent surge in interest? And, more importantly, what should you be doing about it? One thing is certain: based on the ever-faster pace of change, there’s no time to waste.

Why does it suddenly seem as if everyone is talking about ‘digital planning’ in connection with supply chain management? To answer that question, we first need to understand what digital planning actually is. The fact that it’s sometimes also referred to as ‘next-generation planning’ or ‘Planning 4.0’ hints at the answer. In a nutshell, digital planning means supporting your planning activities using advanced digital tools and IT solutions which go way beyond any of the traditional planning technology that has been used so far. Today’s digital planning tools are extremely powerful and ultrafast thanks to technological advancements and the use of cloud computing. Additionally, the availability of algorithms is increasing all the time and they are often equipped with machine learning (ML) capabilities such as artificial intelligence (AI).

So what is driving the surge in interest in digital planning in supply chain management? Recent disruptive events such as the COVID-19 pandemic and the war in Ukraine have exposed supply chain vulnerabilities. At board level, executives are keen to learn lessons from what went wrong and prevent their companies’ supply chains from being caught off guard again. The supply chain discussion is no longer just about costs; it’s increasingly about agility and resilience. But to become agile and resilient, you need to be able to make fast and effective decisions based on accurate and timely data. And that’s precisely where new-generation digital planning tools can play a key role.

Perfect storm for digital supply chain management

The seemingly never-ending tide of disruptions in combination with technological advancements are creating what could be described as a ‘perfect storm’ for digital supply chain management. To tackle today’s challenges, next-generation digital planning tools are finally able to help companies make sense of the huge amount of data constantly being generated – not only by themselves, but also by their supply chain partners and other sources, such as weather data, traffic data and even predictions about geopolitical trends. The tools then help supply chain planners to translate all this data into insights that support pinpointed decision-making.

Better decisions and predictions using digital tools

In the short term, for example, such tools support the evaluation of all kinds of supply chain bottlenecks and disruptions (ranging from a broken-down delivery truck to a natural disaster on the other side of the world). They also enable you to model scenarios based on near-real-time data (often using a digital twin) so that you can identify the best course of action based on effective trade-off decisions and adjust your planning accordingly. Meanwhile, in the longer term, digital planning helps you to define the key strategic drivers that support forecasts and predictions about sales volumes, production planning, pricing, maintenance, etc. Additionally, today’s systems automate much of the decision-making related to simple planning activities, thus reducing time-consuming communications and allowing planners to make better use of both their time and their expertise.

“The gap between companies with digital planning tools and those without will continue to widen”

The all-important first step towards a digital supply chain

A growing number of businesses are realizing that digital planning tools can play a key role in safeguarding their long-term competitiveness and are starting to explore the benefits, each in their own way. As the rate of advancement gathers pace, the gap between companies with digital planning tools and those without will continue to widen. Are you keen to seize the benefits of the new digital supply chain era and avoid getting left behind? If so, you have already taken the all-important first step by recognizing the need to change. But where do you go from here? Unfortunately, there’s no one-size-fits-all blueprint, but there is plenty of inspiration out there. For example, you can read our blog on how to embark on your digital planning journey of discovery.

Feel free to contact Victor Breugem or Peter Tielemans for guidance and support as you start to explore how today’s advanced tools can add real value for your business.