{"id":18767,"date":"2024-07-22T10:03:40","date_gmt":"2024-07-22T08:03:40","guid":{"rendered":"https:\/\/eyeonplanning.com\/blog\/statistical-models-in-demand-planning-copy\/"},"modified":"2024-08-06T16:11:28","modified_gmt":"2024-08-06T14:11:28","slug":"supply-chain-digital-transformation","status":"publish","type":"post","link":"https:\/\/eyeonplanning.com\/blog\/supply-chain-digital-transformation\/","title":{"rendered":"The role of advanced planning systems in your supply chain digital transformation"},"content":{"rendered":"

By Bart Paridaen<\/a><\/em><\/p>\n

When it comes to strengthening supply chains for resilience, supply chain leaders often turn to technology. It’s a sensible move, as the right system can help shift from manual, short-tern actions to long-term solutions and accelerate your supply chain digital transformation.<\/span>\u00a0<\/span><\/p>\n

Advanced Planning Systems (APS) are at the core of modern planning organizations. For that reason, we see many supply chain leaders invest in the capabilities of their APS \u2013 by either replacing or expanding their set-up \u2013 to accelerate their supply chain digital transformation.<\/span>\u00a0<\/span><\/p>\n

In this blog, we will provide some background by introducing what APS systems are, how they fit into the broader digital planning landscape, and what the key functions of an APS system are.
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What are advanced planning systems?<\/span><\/span><\/h3>\n

APS systems are decision support tools for planning that use computer-based optimization. APS systems can take into account a wide range of material and capacity constraints, resulting in optimal or near-optimal plans and schedules. And provide an aggregated view of a supply chain, visualizing constraints, stock development, and multi-level alerts.\u00a0<\/span>\u00a0<\/span><\/p>\n

They can handle higher levels of complexity (i.e., multi-echelon supply network, high number of decoupling points, dual sourcing options, etc.) and support integrated planning decision making and scenario simulation.<\/span><\/p>\n

The position of APS in your tooling landscape<\/span><\/span><\/h3>\n

Digital landscapes are evolving into multi-layered ecosystems, with different solutions all playing their part. ERP solutions are the fundament. Advanced Planning Systems are at the core – and leading vendors are offering an expanding set of capabilities within the broader planning domain.\u00a0<\/span>\u00a0<\/span><\/p>\n

At the same time, we see that the integration of innovative techniques, such as machine learning-based forecasting, into traditional APS systems is not happening at the same pace or depth as for systems of innovation. As such, innovative systems have earned their place in enriching the capabilities of traditional APS solutions. Companies therefore need to make trade-offs in their digital IT strategy on where to position capabilities within their digital ecosystem.<\/span><\/p>\n

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As noted above, ERP and APS systems <\/span>maintain<\/span> different positions<\/span> in the digital ecosystem. This is <\/span>because there are clear differences in the scope, <\/span>purpose, and core capabilities of ERP systems <\/span>(systems of record) vs. APS systems (see figure b<\/span>elow<\/span>). The key differentiator is that ERP systems are <\/span>designed to support short-term planning and more <\/span>dominantly execution, while APS systems support <\/span>supply chain planning for the long-term, <\/span>tactical<\/span> and <\/span>operational planning horizon.<\/span><\/span><\/p>\n

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\"ERP<\/p>\n

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The key functions of an APS system<\/span> in your supply chain digital transformation<\/span><\/span>\u00a0<\/span><\/h3>\n

APS systems enable organizations to achieve higher levels of planning maturity. The key functions of APS systems can be differentiated into 4 different levels:<\/span>\u00a0<\/span><\/p>\n

1. Supply chain network visibility<\/span><\/b>\u00a0<\/span><\/p>\n

APS systems provide a connected platform with <\/span>visibility across the supply chain network. The connectivity and multi-level integration of the plan \u2013 with clear visibility <\/span>of the upstream and downstream impact of planning decisions<\/span> \u2013 overcomes silo planning and enables instant impact analysis.<\/span><\/span>\u00a0In addition, <\/span>the (near) real-time integration of underlying <\/span>transactional and operational execution information <\/span>enables greater plan accuracy and reduced data <\/span>latency to improve decision cycle time.<\/span><\/span>\u00a0<\/span><\/p>\n

2. Planning core<\/strong><\/p>\n

APS systems are designed to support well-standardized and structured planning processes. As such, they force companies to decompose the planning process into clear execution cycles, standardized logic, and well-defined calculation methods. Done well, this goes a long way toward making the planning process more efficient and effective.\u00a0<\/span>\u00a0<\/span><\/p>\n

Another key competency is the ability to support exception-based planning, or what we call smart automation. This means that the system guides the planner to interact where it adds value – through an alert-driven workflow or even by recommending plan updates.<\/span>\u00a0<\/span><\/p>\n

3. Optimization capability<\/span><\/span><\/strong>
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With continuous improvements in computing power, advanced calculation methods and technologies (such as ML and AI), APS systems have evolved more and more into automation and optimization engines. Ranging from more function-specific optimization capabilities such as MEIO (multi-echelon inventory optimization) to full network multi-constraint supply planning solvers.<\/span>\u00a0<\/span><\/p>\n

These capabilities enable (semi-)automated planning outcomes that make trade-offs between various constraining factors such as machine capacity, manpower, material availability, and the associated financial implications.<\/span>\u00a0<\/span><\/p>\n

4. Integral simulation & decision-making<\/span><\/b>\u00a0<\/span><\/p>\n

To support integrated business planning, companies spend considerable amounts of time building different planning scenarios and comparing end-to-end plans at the KPI level. APS systems (to varying degrees) enable planners to create, modify, and compare different planning scenarios in a standardized and time-efficient manner. In addition, the integrated analytical capabilities provide a critical source of information to support the planning decision cycle. Companies with a higher level of cross-functional integration maturity are also able to use their APS system for integrated business planning, bridging the gap between supply chain, finance and commercial, and making the translation from volume to financially driven decisions.<\/span><\/p>\n

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\"How<\/p>\n

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Ready to <\/span>accelerate your supply chain digital transformation with<\/span> your next Advanced Planning System implementation?<\/span><\/h3>\n

Our guide is your essential ingredient for APS success, helping you discover:<\/span>\u00a0<\/span><\/p>\n

Our extensive implementation experience has led to the creation of a proven framework<\/a> that will help you become an APS champion and realize sustainable value.<\/span>\u00a0<\/span><\/p>\n