09/12/2021

The Great Innovators

The digital planning gap between vision and reality: digital planning is high on the agenda of chief supply chain officers (CSCOs), but many companies struggle to fulfil the potential of their initiatives. The degree of success often depends not on the technology itself, but on the company’s ability to keep the transformation simple and focused.

New technologies such as nanotechnology, blockchain, robotics, machine learning (ML) and artificial intelligence (AI) are advancing at an exponential rate, and the supply chain planning domain is not immune to this ‘boom’. Technology providers and consultants are very skilled at presenting an inspiring vision of the future of digital planning, leaving businesses feeling that they can’t afford to miss the boat.

However, there is a yawning gap between that vision and reality:

Moreover, few companies have a successful track record when it comes to digital planning transformation. It often takes them a long time to implement planning systems and tools, which then subsequently often fail to deliver the expected results.

As a consequence, the supply chain performance benefits remain disappointing. Many of the companies I hear from achieve little long-term improvement in supply chain performance, if any at all. According to research by Lora Cecere, the renowned analyst from the US firm Supply Chain Insights, inventory turnover rates have declined in most industries over the past decade. While this does not mean that companies should abandon their digital planning ambitions, they must make some wise choices if they want to increase the chance of success for their digital planning initiatives.

 

Make a realistic plan
Digital planning transformations often lead to changes in the way of working, have an impact on the skills that planners require and also lead to organizational change. In addition, there are substantial data challenges in these types of projects, such as due to the limited availability and quality of master data, for example. As a result, these initiatives demand a lot of time and effort.

I still see too many cases of companies that underestimate the amount of effort required, overestimate their internal capacity and therefore overoptimistically commit themselves to too many projects. This rarely produces a better outcome; in fact, the more marbles you put into the funnel at one end, the fewer seem to come out at the other.

Companies must therefore be more realistic when planning digital transformation projects. This starts with accurately estimating the time needed to get things done and the available capacity. This means that less can be done simultaneously, so companies will need to make a longer-term plan to accommodate all their initiatives. A simple project management tool such as the Eisenhower matrix, which plots initiatives based on urgency and degree of importance, can help to prioritize them.

 

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