Supply Chain Planning Strategic Playbook

1STRATEGY | SOFTWARE | MANAGED SERVICES SUPPLY CHAIN PLANNING STRATEGIC PLAYBOOK 2TABLE OF CONTENTS WHY SUPPLY CHAIN PLANNING ISHARDTHE IMPACT OF POOR PLANNING IS SEVERENAVIGATING A CONFUSING TECH LANDSCAPE LEVERAGING NEW TOOLS AND TECHNIQUES GETTINGSUPPLY CHAIN PLANNING RIGHTGEP: YOUR PARTNER123456 3WHY SUPPLY CHAIN PLANNINGIS HARDSkill set•It can be challenging to acquire advanced skill sets in some manufacturing locations, especially in rural locations.•Many supply chain planning (SCP) roles require data scientist skills.•Many companies struggle with maintaining and sustaining the job design and career track for supply chain planners.Data dilemmas•Incomplete, corrupted, fragmented and poor-quality data is common.•Master data may be non-standard across systems or business units . •Poor master data management guidelines and policies threaten the quality and integrity of master and transactional data, which powers the planning tools.•Older approaches to SCP that solely relied on using historical data is no longer an effective approach.Copyright © 2022 GEP. All rights reserved.With today’s volatilityand complex environmental factors, relying on history as your primary forecasting strategy is no longer effective.1 4Lack of internal and external integration•Functional silos makes it impossible to develop, share and collaborate on demand and supply plans.•SCP is hampered by company culture, lack of metrics and incentives, hesitancy to share data, and a lack of collaborative tools.“Old Tech” still dominates SCP•“Old tech” tools don’t lend themselves to an easy path for adaptability or flexibility as requirements change.•A few years after implementation it’s common for the organization to lose their skilled user base or the complex meta-data is not maintained/refreshed.Many of our clients have complex supply chains•Clients may have tens of thousands of SKUs planned across many locations with widely varying demand patterns and a broad mix of supply availability.A lack of metricsand tools, along with a hesitancy to share data, hampers collaboration efforts.1WHY SUPPLY CHAIN PLANNINGIS HARDCopyright © 2022 GEP. All rights reserved. 5THE IMPACT OF POOR PLANNINGIS SEVERECopyright © 2022 GEP. All rights reserved.GEP estimates that about 20% or less of GEP’s clientsdo an effective job at supply chain planning. 2The planning gap is real –those companies who excel at SCP will realize higher levels of performance in key areas:•Strategically differentiated fill rates for orders and customer types goods across channels•Lower percentage of premium / expedited / air freight for both in-and outbound operations•Less “cost of chaos”•Less ability to consistently hit their lead time targets for important customers•Lower forecasting accuracy which will inflate inventories and buffer stocksLeading to measurable financial advantages, including:•Greater return on working capital•Reduced cash flow out the door•Higher direct labor absorption by volume / labor effectiveness•Less reliance on non-value adding indirect labor•Lower supervisory overhead •Greater return on capital employed as plants, fleets and warehouse are more efficient 6NAVIGATING A CONFUSING TECH LANDSCAPEFor decades, the supply chain planning landscape has been dominated by what GEP refers to as “old tech" —a heavy reliance on big, expensive ERP implementations, and often an accompaniment of best-of-breed tools that bring optimization or simulation capabilities to the transaction-focused ERP system. But there are downsides to this approach —for example, implementations can take years, and any updates are determined by the vendor.Some clients are looking at “new tech” in the SCP space that relies on low-code/no-code platforms that look to rapidly co-develop functionality instead of relying on packaged functionality that must be configured; platforms with large extensibility that offers high integration with almost any toolset that exists; and Rapid-development digital tools such as Python that seeks to quickly solve specific use cases with custom tools developed in swift sprint cycles.Copyright © 2022 GEP. All rights reserved.“Old tech" may still dominate the marketwith many options, but some GEP clientsare moving on to "new tech" for greater configurability, functionalityand agility.3 7Copyright © 2022 GEP. All rights reserved.“Old tech” –ERP“Old tech” –Best of Breed“New tech” for Planning –Digital Tools /Low-Code PlatformsCostMultiple millions $$$Multiple millions $$$FractionTimelineYears1-2 yearsWeeks / monthsFocusTransactional processing, limited decision supportApplication of proprietary models and complex algorithms to broad networksUse of targeted analytics or automation to solve a specific use case and quickly drive valueDevelopment pipeline of vendorsUnsure, lengthy, decided by software vendorUnsure, lengthy, decided by software vendorRapid –as soon as the organization can mobilize around the next use caseSupport requirementsLarge team of internal and external d