Autonomous Integrated Business Planning

Introduction

In the wake of the industrial revolution, the supply chain has been subjected to a linear evolution process over the course of the past four decades. This process has included material requirements planning (MRP), manufacturing resource planning (MRP II), distribution requirements planning (DRP), vendor managed inventory (VMI), collaborative planning, forecasting and replenishment (CPFR), sales and operations planning (S&OP) and integrated business planning (IBP). As supply chains evolved, these improvements were successful and appropriate. However, companies today are operating in a new world, which presents new challenges. The digital revolution, which is characterized by innovations such social, news, events, and weather (SNEW) data, demand sensing, artificial intelligence (AI), machine learning (ML), amongst other things, has shaken the very foundation upon which the supply chain is built.

Due to an increase in mergers and acquisitions, omni-channel conflict, direct-to-consumer channels, rapid proliferation of product configurations, shrinking product lifecycles, and market volatility, the supply chains of the 21st century are becoming exponentially more complex. The globalization culture of “buy anywhere, make anywhere, and sell anywhere” has its advantages in terms of the ability to source the highest quality raw materials from all over the world, produce goods in the most cost-effective locations, and then sell those goods to customers in every corner of the globe. On the other hand, globalization is accompanied by a number of unfavorable effects, including an increased risk of natural disasters, labor unrest, tariffs, currency fluctuations, geopolitical situations, litigation, and trade sanctions. As a consequence of this, there is a tremendous amount of pressure to reduce the risks associated with the supply chain, and the possibility of business disruption or failure is becoming an increasing concern for global companies. The limitations of globalization have been brought to light as a result of recent political, environmental, and economic occurrences such as tariffs, the Brexit, trade wars, COVID-19, flooding in Thailand, and the geopolitical instability in the Middle East (Sabri and Shaikh, 2010). For many years, lean manufacturing has been an essential component in the ongoing effort to enhance the effectiveness of supply chain operations. Companies are able to improve their inventory levels and asset utilization as well as supply goods more quickly and at lower costs when they streamline their traditional supply chains to the greatest extent possible.

However, simply being lean is not sufficient anymore, and the global COVID-19 pandemic has shown that entirely lean networks have serious flaws that need to be addressed. The pandemic has recently revealed to a great number of companies that their supply chains are not only too fragile but also not robust enough to react to the extreme variations in demand and supply that have been caused by the pandemic.

The leaders of businesses in the supply chain need to reevaluate the cost of risk in light of the impending arrival of a second wave of coronavirus and make investments in operations that are nimble, efficient, and resistant. This means being able to meet the demand of customers with a supply chain that is intelligent enough to proactively identify problems, robust enough to withstand disruptions, agile enough to react swiftly to changes in the market, and efficient enough to improve the productivity and costs of planners.

In the aftermath of COVID-19, the companies and organizations that will emerge victorious are going to be the ones that have managed to strike a healthy balance between their supply chains' levels of efficiency and their capacity for resilience.