Learn about forward-looking software changes and opportunities as it relates to Supply Chain Management, including those not always readily visible to software consumers.
The Proactive Future of Supply Chain Software - By Mary Lanham, COO, Lanham Associates
“They” have been warning us for years that technology will beget newer and faster technology which will change the world, and they’ve pretty much been right.
For example, if you take a long view of technology over the past thirty years you cannot miss the velocity of technological change in the music industry. Where did cassette tapes and compact discs go? We now get our music from our phones – courtesy of the cloud.
Speaking of phones, my kids do not remember telephones mounted to the wall with long curly cords. Nowadays we’re all constantly plugged in to our phones for work, friends, family and news. They serve as our wallet, our concierge for reservations, our boarding pass, GPS, and provider of entertainment and weather info. Music and phones aren’t the only industries morphing --my great grandchildren, when they arrive, will probably not even remember the days when humans drove cars.
Software Changes Ahead
While change is easy to see in point-to-point technology, it is also occurring in software -- even supply chain software -- however it is not always readily visible to software consumers.
Take the Microsoft software stack, for example. Every time we get a new ERP software release from Microsoft, it does an even better job of integrating Outlook, Word, Excel, CRM or “Customer Engagement,” SharePoint, mobile phones and the newest technology. The “stack,” as it’s called, gets better and better and provides more and more value.
In numerous presentations Microsoft CEO Satya Nadella has also reminded us that Microsoft is working to offer platforms that empower people to achieve more across all devices. Its work in intelligent cloud and distributed computing (Azure), ongoing innovations to Edge (think Internet of Things) and the inclusion of telemetry in the newest software offerings are just a few examples.
All of these platforms enable rich databases that can feed data into innovative software functionality such as analytics, AI (Artificial Intelligence), bots (software apps that perform simple and structurally repetitive tasks more quickly than humans), cross-domain digital assistants like Cortana, Alexa and Siri, and new cognitive services with speech and language offerings as well as mixed reality for immersive experiences in design and training.
Technological Change: The End Goal
While new technology often can look and feel like the proverbial “shiny new toy” – it should:
- provide more information to make better business decisions
- automate rote activities
- increase productivity
- ensure your data brings you closer to your customer so you can meet their needs in the best way possible
The purpose of a supply chain is to link suppliers, distributors and their customers more and more closely, completing a loop that provides accurately what consumers want when, and even before they want it.
Ask any distributor and they’ll tell you that being able to anticipate customers’ needs is at the center of their universe. In order to get supply chain right these days, they need to be able to distill large amounts of data so they can predict future demand, and adapt to ongoing change.
Proactive Supply Chain Planning and Execution
Lanham Associates’ Demand Planning solution provides good examples of where supply chain is headed. Its mission is to optimize the management of a distributor’s inventory so that they can maintain near 100% fill rates for their customers – without purchasing inventory too early or keeping dead inventory – both of which eat into cashflow.
When it comes to inventory management, a demand forecast is just a prediction. It will change moment by moment, based on reality. Our software starts with historical data and, using machine learning, processes huge amounts of data so that we reforecast the past, by item, and then use a forecast most appropriate to that item to continue forecasting the future.
We have also experimented with Cortana, adding her to the other eighteen formulas the system uses to accurately reforecast inventory needs. So far, she still has some learning to do, but we anticipate her learning curve will be shorter and shorter, and soon she will have a key role in assisting users with accuracy.
Customer and vendor collaboration are encouraged in our Demand Planning software, and unique forecasts can be submitted by customers and reviewed with them when discussing fill rates. The better the information going in, the better the customer is served, and they can see how their forecast impacts what products are available to them. Allowing the system to do the heavy lifting involved in analyzing data frees planning employees from managing huge data and spreadsheets, and provides more time for them to actually collaborate with their customers.
Execution: Dynamic Replenishment
In order to be most accurate in providing products to distributors’ customers, Lanham’s Demand Planning system optimizes inventory replenishment. We know that forecasts change dynamically with reality, so a key advantage in demand planning software is the capability to dynamically change what should be ordered, based on current factors in the supply chain. Our system uses dynamic controls that continuously review all pertinent factors. Each morning, or upon demand, optimized suggested orders are presented for purchasing review.
Transfers for Optimizing
The system also considers when inventory should be moved from one location to another to fill orders. Vendor minimums, the cost of shipping items, and other key information is all reviewed by the system which presents information to the user that can be viewed in detail should there ever be a question about how a recommendation was made.
As a supply chain software publisher, Lanham will continue to embrace the new technologies from Microsoft, and will engineer some of our own to ensure our software continues to add more and more value.
Looking ahead, customers can best prepare themselves to take advantage of newer, more valuable supply chain technology in several ways:
- Devise a plan for your company’s unique mission and strategy. Understand and plan to absorb the technology required to accelerate it, internalizing that changes are coming faster and faster.
- Hire smart, tech-savvy employees who are creative in exploring how to add value to the company, and plan for retraining high-quality employees for new skill sets.
- Collaborate with your vendors (including software providers) and customers to stay in synch with them, and be willing to experiment with them where it makes sense.
- Embrace the cloud for your business. It is the enablement platform of the future for the newest technology offerings due to its distributed, scalable and flexible nature and the momentum Microsoft and others have dedicated to it.
We believe that the future holds tremendous opportunity for all of us, and that it’s an exciting time to be involved in supply chain. There’s no shortage of technologies that will change business forever. We will continue to evaluate new technologies as they become available. The key thing to remember is that forever starts today!