Demand planning is tricky. Accuracy is a constant challenge. And the dread of errors always looms large. Moreover, spreadsheets need a great deal of time and effort to use. Meanwhile, customers’ expectations keep growing. For SMEs, adapting to such dynamic market conditions is challenging.
And demand planning limitations are a major reason why.
A lack of resources often prevents SMEs from investing in planning tools. But at times, they’re not aware of some powerful technology that might be within their reach. A good example is Supply Chain 4.0 tools. The tools can be a game-changer for SMEs, especially for demand planning.But there is low awareness about their benefits and potential ROI within SME circles.
In this post, we aim to change that.
Let’s dive in!
The fourth industrial revolution (also called Industry 4.0) is underway. Industry 4.0 aims to digitize production and processes that create value. Supply Chain 4.0 is a big part of this movement.
The goal of Supply Chain 4.0 is to harness the power of big data analytics, automation, and end-to-end networks. The desired result is more agility and efficiency across the supply chain.
Below are key Supply Chain 4.0 technologies and what they do:
- The internet of things (IoT) gathers lots of real-time data using devices such as sensors. In this way, firms gain a holistic view of their operations.
- Robotics allows a sharp reduction in manual tasks via widespread automation.
- 3D Printing creates objects based on virtual models using thin material layers. The result is a massive reduction in waste.
- Machine Learning adjusts decisions based on the inflow of new information.
- Big data/analytics expands the use of data to understand market dynamics.
Demand planning in Supply Chain 4.0 is very different from traditional methods. IoT sensors gather tons of data for a wide array of variables. Examples are weather and traffic updates and info from social media and news feeds. So the scope of forecasting widens. Spreadsheets usually can’t handle such large chunks of data. But modern analytics tools churn out accurate forecasts rapidly. And demand planners no longer resort to a handful of black-and-white decisions.
Predictive analytics helps them map out several scenarios. They can then balance strategic priorities and risk minimization. A cloud platform provides real-time data access to all stakeholders. External partners also get instant updates with internal ones. All this leads to more collaboration and fewer silos.
Finally, through AI and ML, self-learning algorithms come into play. As new data comes in, they keep fine-tuning forecasts. Due to this continuous refinement, forecast accuracy improves over time. The result is a quicker assessment of customers’ needs. This deep understanding leads to timely inventory adjustments.
Many large firms are already using Supply Chain 4.0 technology. But smaller firms are often hesitant because they assume the cost is too high. That’s not the case, especially for demand planning tech.
And users can test this machine learning-powered software with a 14-day free trial. Next, we have IoT sensors.Over the years, their prices have consistently fallen.
Leasing and pay-as-you-use options will continue making sensors even cheaper. These options allow SMEs to test such equipment and see if they’d yield a high ROI.
Using Supply Chain 4.0 tools isn’t that simple.A fair amount of preparation is necessary.
Do the following:
- Check the current tech-savviness of your firm. Are internal teams ready to adopt new technology? Are there any skill gaps?
- Assess the readiness of your partners. Are they all set for digital integration with you? How can you ease their transition?
- Think about end-to-end processes. Simplify where you can to aid collaboration.
- Assign clear roles to drive the cultural shift toward digitization. Set up KPIs for accountability.
- Drive change from the top with leaders as evangelists.
- Chart a timeline to achieve goals. Decide which tools to pilot when. Plan the entire adoption journey ahead of time.
- Work within a budget and wait for tangible results before investing further.
Demand planning is challenging, even with the best technology.
But opting for strong (and affordable) Supply Chain 4.0 tools can give you an edge over your competitionThe only question is: are you ready to take the leap?