At the forefront of every change and disruption is an operations function, stretching beyond the day to day to redefine a company’s position for growth. Inventory buffers are recalculated and reallocated to fend off unnecessary regional shortages and surpluses. Plant output and capacity are reconsidered as consumers evolve and labor costs rise. Even geopolitics, technology, climate change and disease are shifting decisions on how to produce and deliver goods. The financial impact of these decisions is nothing short of significant; the latest and most severe disruption brought potential losses equivalent to 42% of one year’s profits, according to McKinsey & Company. But as many Logility customers have recently proven, rethinking how business gets done with insight and adapting frequently and incrementally are the keys to protecting and preparing for long-term growth and overall enterprise health.
But this evolution didn’t happen overnight with seamless and elegant processes. Businesses needed to find a new way to understand what was happening in the marketplace and across the supply chain. And perhaps more importantly, they needed to pull back every organizational layer to pinpoint where existing processes, workforce skills, and infrastructural assets were breaking under the pressure of dramatic, continuous change.
A Diagnostics System for Business Optimization
In many ways, IBP is like the diagnostics system embedded in most cars today. Sensors indicate potential risks from, for example, emerging drivers, changing road conditions, a punctured tire, low oil levels, and imminent engine failure. And at the core of the car’s central system is a small computer that monitors every inch of the vehicle and surrounding environment and determines when it should notify the driver.
Of course, today’s diagnostic systems are incredibly digitalized and data-driven – and we wouldn’t dare consider going back to manual checks. And the same can be said for IBP software that provides the perceptive monitoring, forecasting, planning, and optimization capabilities needed to run a high-performance business under any circumstance.
But you don’t have to take our word for it. Here are the most-used IBP capabilities that our customers use to navigate a wide range of disruptions with operational speed and proactive response.
1. Gain visibility into the entire supply chain with up-to-the-minute data
While assessing traditional S&OP, SIOP, or MIOE, companies can go a step further by factoring other financial and operational data – such as customer demand and production capacity – into their business plans. They can visualize, evaluate, and optimize their strategies for customers, markets, assets investments, and resources; connect them to revenue and cost drivers; and align them to core enterprise goals.
2. View inventory projections by resource and specific capacity details
Continuous business planning creates mutual consensus among all stakeholders based on predictive insight into where customer demand is heading and how existing resources and production capacity fulfill it. By informing decision-making with a single source of truth, decision-makers can strategically determine inventory levels, new product introductions, headcount changes, and capital investments in ways that increase profitability, efficiency, and throughput.
3. Create or select from an array of pre-modeled scenarios
One of the most transformational benefits of IBP software is the ability to model scenarios to explore risks and opportunities, the enterprise-wide impact of decisions, and outcomes to expect without IT intervention. By providing access to pre-built models, data visualizations, reporting, and analysis, all authorized roles can optimize the product-cost mix, understand the implications of demand shifts, and formulate effective and efficient actions to respond.
4. Get notified of any scenario activity instantly
Unexpected external and internal business conditions can render any plan less than optimal in a heartbeat. For this reason, it’s essential to have software that alerts decision-makers the moment when scenario activity changes, ranging from emerging customer behaviors and evolving preferences for e-commerce to supply and sourcing needs and new business models. Decision-makers can re-explore their model to reconfigure their strategies to identify vulnerability, bridge gaps, and perhaps discover new opportunities to surpass the competition.
5. Understand how production will shift to meet demand
Organizational leaders can build additional scenario models to strengthen the overall health of the enterprise for future growth. They can tap into real-time data and granular operational visibility to know where the company needs to go, how to respond to market dynamics strategically, and what needs to happen to achieve its goals.
Better Positioned for Uncertainty than the Competition
Every evolution in today’s marketplace introduces a new level of complexity created through countless moving parts and variables. And every single change can impact even the most strategic, well-crafted business plan.
By applying the use cases discussed in this article, businesses can account for multiple factors in real time with a highly organized digital experience of data-driven insight, enterprise-wide visibility, scenario analysis, and forward-looking preparedness.
These capabilities are what our customers have come to know as the power of Logility’s integrated business planning solution. And for your business, it can become the future of your competitive edge.