5 Ways to Attain Resilience
The pandemic caused unprecedented demand disruptions as lockdowns swept the globe. What could we have done better to prepare for a scenario as unexpected as the one created by COVID-19?
To better weather the next storm, organizations should consider these five ways to enhance day-to-day planning and improve shock resilience:
1. Embrace insights to effectively overcome worst-case scenarios. Businesses have relied on essential insights to refine processes, make better decisions, and improve the bottom line. In a world still recovering from the pandemic, insights can also allow firms to effectively transition to more granular scenarios.
Gained through the visibility of relevant and timely information, insights can shed light on challenging situations and provide an advantage for entities that take appropriate action. By improving supply network visibility—and by extension, attaining superior insights to use very narrow aisle racking, substantially improving space utilization, enterprises can advance their agility and resiliency.
2. Overcome the challenges associated with attaining full visibility. With endless amounts of information available, it can be difficult to narrow the scope and transform data into valuable and actionable insights. Businesses may be especially challenged by this in the months following stay-at-home orders, which have significantly changed consumer patterns.
Without knowing what they want, what's coming next, or how the world will evolve tomorrow, enterprises must rely on strong demand sensing and artificial intelligence to help connect sales and operations planning (S&OP) to the pulse of the market. This is particularly important in times of crisis but should also be par for the course in day-to-day planning.
3. Simulate events and scenarios to better prepare. The idea is to be fully aware of the results and potential outcomes before making a final decision. In doing so, organizations will be better positioned to respond at a more granular level. This is vital in planning daily requirements, such as supply shortfalls, demand shifts, and capacity changes.
4. Don't ignore the need for top-down planning and executive overrides. In a rapidly changing landscape, top-down planning can enable an organization to model new assumptions as things change, allowing for quicker response times that minimize potential problems.
These new assumptions allow executive overrides to be implemented as necessary, adjusting demand in a cascading basis at the click of a button. Better still, day-to-day, top-down planning can also assist with modeling the launch of new products, as well as modeling for entry into new markets where macro assumptions are key.
5. Approve adjustments via local workflows. To ensure that firms are able to quickly make decisions without a lengthy process held up by time-consuming oversights, adjustments that do not require executive signoff should be approved via local workflows.
As a result, this would evolve the day-to-day S&OP process, transitioning from one that's static to more of a "living" plan that's supported by real-time response and empowered decision-making.
Be Prepared for What Comes Next
In a world following COVID-19, firms must review their current capabilities and prepare for structural supply chain shifts, network de-risking, and other changes. By investing in planning capabilities that improve efficiency, organizations will be better prepared to take on whatever comes next.