Decisions, decisions! The pressures on supply chain professionals are constantly reaching new heights in today’s increasingly uncertain landscape, and traditional decision-making approaches are falling short.
It’s crucial, now more than ever, for organizations to take a step back and reconsider their strategies to embrace a better, faster, more data-driven approach to effectively address the most impactful supply chain decisions.
Why Does Decision-making Need to be Reengineered?
Simple. The decision processes many organizations follow were created when supply chains were more predictable. Today’s environment is nearly the opposite with disruption and unpredictability the norm thanks to increasing customer demands, changing market dynamics, and continuous disruptions. Take for example customers. Today’s customers are more demanding than ever. They expect faster delivery times, highly personalized experiences, lower costs, and real-time updates available when and where they want them. To meet these expectations requires greater insights and access to the right information to make faster, more accurate decisions in real-time.
In this new process, it's critical to redefine what is essential, to reconsider the key players and factors involved, and to reimagine how data and analytics can function at the core to elevate and accelerate decisions.
It’s important to note this is not about overhauling every decision; rather, it is about focusing on the most crucial and impactful decisions that cannot be effectively addressed using traditional approaches.
Time to Make Better Supply Chain Decisions
To make better supply chain decisions, we first need to step back and understand the defining characteristics of what "good" decisions are and how they align with improved supply chain performance.
Gartner characterizes this with the ‘Three C’s of Effective Decision Making’: Connected, Contextual, and Continuous. Let’s explore these characteristics and how they can help us re-engineer decision making:
Connected: Break down your silos. When decision-makers actively seek input and alignment from key stakeholders and peers across the organization, they are focused on making connected decisions. By involving all relevant parties in the process, decisions become collaborative, inclusive, and transparent. This improves the quality of the decision and also fosters a sense of shared responsibility and ownership among stakeholders.
Contextual: This refers to the importance of making decisions based on a deep understanding of the extended network of suppliers, customers, and other stakeholders. Contextual decisions rely on data and consider the impact on various stakeholders. By incorporating external data from customers, suppliers, and public sources, decision-makers gain a broader perspective and can make more informed choices.
Continuous: Continuous decisions are necessary in today's fast-paced and volatile environment, as companies need to be responsive and quick to seize opportunities and mitigate disruptions. Continuous decision-making harnesses advanced automation and real-time data analytics to enable faster and more dynamic decisions.
Move From Words to Action
There may be a lot of talk about making better and faster business decisions – but it’s crucial to move beyond aspirations into the practical steps that leaders can take to achieve this goal. To help you stop talking and get moving, we’ve pulled together four key steps to ignite your process:
- Continuously Monitor and Track Events: Supply chain planning systems enable continuous monitoring which allows you to track events and disruptions in real time. By proactively identifying potential issues, decision-makers can stay ahead of the game and respond swiftly when necessary.
- Assess the Impact of Events: When an event occurs, it is essential to assess its impact on the supply chain and analyze the potential consequences. How big is the impact of the radius blast? Does it matter? Understanding the magnitude of the impact is key for decision-makers to effectively prioritize their response.
- Respond to the Decisions If Needed: Not all events require re-planning; so, it’s important to determine the significance of the impact to help you understand when to take action. Focus on aligning decisions with the identified impacts to make targeted and effective choices.
- Initiate the Right Processes and Engage the Right People: Create processes that engage the right people in the decision-making process, and that are flexible and adaptable. This allows for efficient coordination and collaboration among stakeholders, and for streamlined workflows that ensure decisions are effectively translated into action.
Embracing the Future: Digital Supply Chain Twins
As organizations continue to grapple with increasing complexities, the concept of a digital supply chain twin (DSCT) is a must-have capability modern supply chains need to identify and chart the right path forward. A DSCT is a virtual representation of a physical supply chain, utilizing real-time data and advanced analytics to mirror the dynamics, processes, and components of the actual supply chain. This model can simulate various scenarios, project disruptions, and predict outcomes, enabling organizations to make more informed decisions faster.
The incorporation of digital supply chain twins marks a significant stride towards achieving enhanced, data-driven, and agile decision-making, and offers a transformative solution to handle complexity in an effective way.
Here's how a DSCT can revolutionize supply chain decision-making:
Enhanced Visibility and Insight: Digital supply chain twins provide an unprecedented level of visibility into supply chain operations, capturing data from various sources to create a comprehensive digital representation. This visibility empowers decision-makers with real-time insights, enabling them to identify potential bottlenecks, optimize workflows, and proactively respond to disruptions.
Scenario Modeling and Predictive Analytics: By simulating various scenarios, decision-makers can test different strategies and assess the potential outcomes before implementing them in the real world. Companies can anticipate future challenges, allocate resources efficiently, and make decisions that are aligned with their strategic goals.
Agile Decision-Making: Digital supply chain twins enable decision-makers to quickly adapt to changing circumstances. When disruptions occur, organizations can run simulations to evaluate alternative courses of action and select the most effective response, minimizing the impact of disruptions on the supply chain.
Collaborative Decision-Making: A DSCT fosters effective teamwork across the organization bringing together different departments and stakeholders who can now interact with the digital twin, share insights and contribute to the decision-making process. This collaborative approach enhances the quality of decisions and ensures alignment across the organization.
Continuous Improvement: The digital twin is not a static model; it is a living, evolving model. As new data becomes available and the supply chain undergoes changes, the digital twin adapts. This allows companies to continuously improve their decision-making processes, learning from historical data and refining their strategies over time.
As you look at re-engineering your decisions, ask yourself these questions:
- Do you have a mature, end-to-end digital supply chain twin?
- Are you able to seamlessly and effectively incorporate complexity and uncertainty into your supply chain decision-making framework?
- Have you employed a strategic step-by-step methodology to evaluate the kinds of decisions that should be automated, those that require human involvement and be able to understand the impacts of your decisions?
Every supply chain is unique and requires expertise to help your team effectively harness data from a variety of sources and enterprise systems, to create a dynamic and accurate digital twin that faithfully replicates your real-world supply chain.
The Atlas Planning Platform uses advanced analytics and machine learning to process and analyze the wealth of data generated by your supply chain network, transforming it into actionable insights that empower well-informed, collaborative and continuous decision-making.
Let us guide your digital supply chain transformation and unlock the right strategy powered by advanced planning technology. We’ll help you harness the power of the data to elevate decision-making and build agile and resilient supply chains that drive success in today's rapidly evolving landscape.