How 5 megatrends will disrupt your supply chain planning
The future of planning, part I
In 10 years’ time, planning will be a whole different ballgame. Now is the time to start preparing – in terms of technology, talent, and organisation. The COVID-19 pandemic could in fact be the turning point, if you want your company to quickly respond, recover and thrive in the post-crisis era. In a series of 4 articles, we will share our views on the future of planning. In this article we discuss the 5 megatrends that are already - or soon will be - impacting your supply chain.
Megatrend 1: an increasingly dynamic world
Our world is much more dynamic, complex and volatile than ever before. From Brexit and trade wars to the current COVID-19 pandemic, various societal developments have a huge impact on the supply chain. Businesses need a resilient and agile supply chain that helps them forecast risks and develop accurate scenarios in no-time to quickly respond, recover and thrive in the post-crisis era. We need to adapt to the new reality on a short-term basis and develop scenarios from a planning perspective, in order to speed up decision-making and shape the “new normal”.
Megatrend 2: changes in consumer behaviour
At the same time, consumers have become increasingly demanding. The world is individualising, so consumers demand more diversity of products, more channels to choose from, as well as faster delivery times and transparency. They need to know if the product they have selected is the one they are looking for, whether it’s available, and if so in what quantity. And if not: what are the alternatives, what are the extra costs (if any), and when can they expect the delivery – not just on what date, but during which time-slot? This trend started in consumer business – remember customised running shoes – but is now dripping into other industries as well. A trend that requires even faster decision-making than ever before.
Megatrend 3: exponential growth in digital capabilities
Technology is finally living up to its 10-year promise. It took a while – predictions 10 years ago did not seem to materialise at first – but current technology is able to support agile and resilient supply chain processes. Many technologies, from AI, machine learning and IoT to cloud computing and data availability, are maturing and offer more capabilities at lower cost than before. For instance, scenario planning – which requires the handling of an enormous amount of data – used to be an issue, but the growth of computing power and flexible visualisation now enables both exception management and near real-time scenario planning.
Megatrend 4: the war on talent
Talent is already hard to find and attract. While technological capabilities and consumer expectations continue to advance, supply chain teams need people who are even harder to find, with skills that are fundamentally different from what was expected from planners up till now. These new hires are people who are able to think on a strategic and tactical level, in scenarios and risks, with analytical as well as communicative skills, and who are market-oriented. With skills like these, they might just as well work in marketing or R&D. Also, talent needed for implementation of new technologies, is just as rare and usually already “sold out”. How to attract and retain these “gems”? At least make sure to offer them attractive career paths – with a perspective on the next steps they could take in a few years’ time, either in management or in commercial or analytical functions.
Megatrend 5: purpose-led companies
Not so long ago, companies were mainly focused on shareholder return and employees were mostly concerned about their remuneration. With the rise of generations Y and Z, and societal challenges such as climate change, the focus of companies and talent (as well as consumers) is shifting towards topics such as sustainability (e.g. reduction of CO2 emission and plastic waste). This has a huge impact on decision-making. For instance, if planning models take CO2 emission reduction into consideration, this might imply sourcing materials in one’s own region based on “true cost” rather than materials from overseas based on “lowest price”, hence drastically shifting the planning objective for many organisations.
The future of planning series
Now is the time to start preparing for the future of planning – in terms of technology, talent, and organisation. The COVID-19 pandemic could in fact be the turning point, if you want your company to respond, recover and thrive in the post-crisis era. In this series of online articles, we will share our in-depth views on these topics, the first article being an overview of megatrends that are impacting supply chain planning. In the next 3 articles we will discuss the consequences of these trends more extensively, based on our own hypotheses and insights. Coming up next in June:
Stay tuned for article 2: Technology will take over (the majority of) planning decisions. With such an abundance of data available, the capability to connect various data sources, and sensors that inform about real-time events, planners have an end-to-end insight into the supply chain. Technology offers new functionalities and algorithms to support the planning process, allowing planners to focus on the exceptions rather than all the data, and to do near real-time scenario planning on a five minute basis rather than a few days. Supply chain planning will be a key strategic element to stay ahead of the competition, these technologies are vital.