In my last position, I worked as a supply chain planner at a chemical company in a team of about 12 employees. My focus was demand planning. I learned more in those four years than I did at any other time in my career.
I believe the success of the next generation of supply chain planning hinges on well-defined planning roles.
The role of supply planner always sounded horrible to me. Why? It seemed like the planners were chasing the latest backorder without having time to dig into root causes or improve processes. Supply planners are the orchestrators of the supply chain, but they are dependent on other roles to achieve the key metric of service to the customer. They are dependent on procurement to order materials, manufacturing to make the products, logistics to get the product to the customer, customer service & marketing/sales to tell them what is priority, and dependent on a system they may not understand well enough to trust.
Demand planning on the other hand was always appealing to me. In fact, I was networking my way into the planning group as a demand planner before they were even looking to add a position. My instincts were right. I loved analyzing demand patterns, learning about product seasonality, working with the system and access databases, and collaborating with marketers (who were much nicer than the harsh operations personalities I was used to, but that’s a blog post for another day).
How is planning changing? What will it look like in the future?
As technology advances and more and more data is collected, planning is THE group with systems and data analysis expertise. The role of the planner is changing, requiring greater analytical capabilities and process knowledge. As technologies change even faster, the success of adoption depends on role definition. In my first week at Supply Chain Insights, facilitating the Next-Generation training, this became very clear.
As we move to the technology driven, autonomous supply chain, demand planners need to understand the math behind the forecast models and have the ability to fine-tune the models used for each product. This is very different than the blind usage of forecasting models where the algorithms are never adapted to processes, and if the forecast models don’t work planners turn to their favorite spreadsheets. The future requirements will eclipse spreadsheets.
Similar to demand, supply planning needs to work on understanding the system drivers. For example, if the system is recommending a production quantity for a group of products that seems too low, instead of telling manufacturing planners/schedulers to ignore the system and produce more, supply planners need to figure out what is driving the system-recommended quantities. Is the safety stock setting correct? What about the lead time settings, or the supply chain setup? Should demand planning review the forecast model? Once the issue is determined, planners will need to ask WHY this happened to address the overall problem. Focusing more on addressing the root cause of issues and fixing the system instead of building workarounds will help with understanding backorders, and preventing future backorders, and is key to the future success of planning.
If they don’t have it already, planning will need roles specifically focused on data wrangling, system administration, and modeling. The skill requirements are increasing. This capability needs to be in the line-of-business team, not in the Information Technology (IT) group. It will continue to get more complicated as more technology is implemented and more data becomes available.
In the Supply Chain Talent survey recently completed by Supply Chain Insights, the shortage of talent was found to be in planning roles (see Figure 1 below). Demand planners and data scientists are a constraint. In addition, there is a shortage of S&OP Planners. I have not previously seen this as a separate role in planning, but I think this also points to where the future of planning is going. As we are using our resources to manage our systems and do data analysis, we will perhaps need separate roles to continue building the relationships between sales and operations, ensuring that the teams are aligned on future plans.
Figure 1. Supply Chain Talent Shortages
For success in the next generation of planning, I believe supply chain leadership will need to define planning roles clearly with the use of technology and data analysis in mind. Planning teams should be able to answer the questions that follow. How will we manage the planning systems in each role? What data are we going to pull, and which metrics are we going to measure? How does one metric affect all of the other metrics? Who is responsible for pulling the data? Which metric is key to each planning role? Most importantly, how does each planning role act based on the data?