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Looking Ahead: Supply Chain Predictions for 2018

By LLamasoft Editorial Team  December 5, 2017

With a roller coaster of political, regulatory, and weather-related supply chain disruptions, 2017 has certainly taught us that volatility and uncertainty are a given. Anticipating and reacting optimally to those challenges can be the difference between supply chain success or failure. Our team at LLamasoft works closely with customers, as well as industry analysts, analyzing supply chain challenges and trends. Here are our predictions – which include some big changes – for the year ahead!

Increased focus on continuous supply chain redesign, balancing and optimization by global businesses

We often talk about the value of continuous supply chain design to sustain business success and a competitive advantage. Leading global companies have created centers of excellence to make supply chain design a core business process, and are netting serious gains as a result. With volatility and constant change becoming a “new normal” for global business, this need is more critical than ever.

With a living, digital model of the supply chain, backed by real-world data, companies are evaluating any of the what-if scenarios they want to plan for. This includes modeling the typical components of your supply chain: facilities, products, transportation lanes, and customer demand. That’s not all, models can also incorporate tax and duty structures, labor costs and availability, lead time uncertainty/variability, multiple competing objectives, safety stock, and transportation routing. Using the Supply Chain Guru supply chain design platform, all of this can be analyzed within the same technology.

Supply chain design models extend to support planning decision-making

In 2018 enterprises will continue to grow their internal competency and maturity in supply chain design by leveraging digital supply chain models to make better decisions—more frequently. Across every industry, volatility and uncertainty are forcing companies to optimize what-if scenarios on a daily basis. Our customers are rapidly expanding beyond traditional network design to attack new frontiers like optimizing inventory placement and minimizing cost to serve. Forward thinking enterprises are finally breaking down functional silos by optimizing across the enterprise with an end-to-end perspective – such as combining planning transportation routes with optimized production capacity and scheduling.

The bottom line is that the accelerated pace of change requires tools that enable companies to model their supply chain at the same level of detail with which they execute. Companies with this continuous innovation will clearly prosper from more rapid decision making across the enterprise.

Optimization and advanced analytics empower the planners of the future

Your supply chain decision-makers are the ones who will create tomorrow’s best practices. Are you giving them the tools they need today? With volatility and change creating pressure to continually re-optimize supply chains, planning tools must become more accessible to the business user. In 2018 we see companies adopting app-building platforms, like Planning by Design, that empower business users to optimize supply chain scenarios without having to rely solely on a small team of supply chain analysts.

By putting the power of analytic engines directly into the hands of decision-makers, companies can spread the wealth of optimization with no prerequisite for extensive modeling knowledge or heavy IT involvement. And increased access to optimization and analytics helps compensate for weaknesses in existing planning systems while extending their reach with built-in integration. As a result, businesses will benefit from a continued convergence of design, planning, and execution to address the rapid pace of change.

Increasing reliance on more sophisticated demand modeling

Companies are moving beyond traditional forecasting to exploratory demand modeling in order to increase confidence in their strategic and tactical decision-making.

With volatile consumer demand, enterprises are struggling to get ahead of the game and enable a more agile decision making. And we’ve all seen the adverse ripple effects that an inaccurate understanding of demand can have across the organization – and the bottom line. In 2018, supply chain designers and analysts as well as other users will begin leveraging more sophisticated demand modeling solutions like Demand Guru to visually explore key drivers of demand and test alternative demand scenarios and sensitivities.

It’s clear that in order to thrive in the new year companies must make decisions faster, smarter and more frequently across every aspect of the supply chain. From sourcing and inbound transportation, to manufacturing, inventory, warehousing, and final delivery the opportunity for supply chain optimization abounds in 2018. We’re looking forward to guiding your team through the journey!