Optimization is not the only algorithmic tool that supply chain companies need to solve their planning and decision-making problems.More May 2, 2019
Finding the right prescription for your supply chain pain
Author: Özgün Aydın
In everyday life, when you are experiencing a health problem of some sort, there are several different courses of action that you may opt to take.
First, you will probably try to endure the pain in hopes that it will resolve itself and go away.
Then, if the pain persists, you may try to self-diagnose to determine the source of the pain or discomfort you are feeling and figure out an appropriate treatment.
Finally, if the pain still doesn’t go away, you may seek out the services of a professional doctor, who will be able to diagnose and pinpoint the problem and prescribe the best solution.
For minor health issues, the first or second approach may be sufficient. But for more serious problems, deciding not to get professional help can have detrimental or even fatal consequences. To use the classic example: the chest pain that you may mistakenly think is merely a sign of a muscle ache or viral infection may actually be a symptom of an impending heart attack.
The same situation applies to supply chain companies that are experiencing intense and chronic pain due to their planning and operational challenges – and this can be said of the majority of firms in today’s highly complex and hotly competitive business landscape.
Putting up with the pain
Most supply chain companies know that they have some problems in their planning or processes – the symptoms of which are operational inefficiency, lackluster delivery performance, and increasing costs.
Many of these companies don’t know, however, how to identify and address the sources of these problems. So they try to simply put up with the pain for as long as possible – until it becomes absolutely unbearable.
The pitfalls of self-diagnosis
After enduring their supply chain planning and operational pain for as long as they can, many companies will try to self-diagnose their issues and devise their own remedies.
When they do this, what usually happens is:
A) They wrongly diagnose the problem. For example, they may identify issues in their line planning or scheduling processes as the source of their pain, when – in reality – it’s ineffective capacity planning or order promising processes that are the true cause.
B) They decide on the wrong solution. For example, they may look to manual planning techniques and tools like Excel as the answer to their problems. Or (if they are actually willing to invest in an automated, algorithm-based planning solution) they may think that optimization algorithms are the panacea for all of their supply chain woes – when, in fact, they might actually need a scheduling or heuristic or another type of algorithm to solve their problem.
Reaching out to the experts for help
Although self-diagnosis is an important first step for supply chain companies looking to identify and address their planning and operational problems, ultimately they need to engage the services of a team of “supply chain doctors” from a company with experience and expertise in algorithmic supply chain planning and optimized decision making, like ICRON.
When a potential customer reaches out to us and tells us about their supply chain pain, the first thing we do is to conduct a thorough examination and deep-dive analysis of their business processes – which we call “PlanScan”.
Through this analysis, we can pinpoint the sources of their planning and operational pain (which are often different from what they previously suspected) and we can prescribe the best algorithm-based solution to enable them to fix those problems (and achieve greater productivity and profitability).
Some expert advice from a “supply chain doctor”
Although each company’s supply chain problems are unique (and require different solutions), there are several, general pieces of advice that I – as a “supply chain doctor” – would offer to all supply chain executives:
1) With the help of an algorithmic supply chain planning and optimization software provider like ICRON, examine your planning and operational processes thoroughly and objectively to detect your pain-points and determine the best solution.
2) Before deciding to invest in an algorithmic supply chain planning and optimization solution (which, as we all know, are not cheap), clarify and calculate the potential gains (in terms of your KPIs) so that you can clearly measure your ROI.
3) Ensure that you have the necessary resources (in terms of money, manpower, and accurate data) and management support to proceed with the implementation of such a solution.
4) Work with your software solution provider to generate an implementation roadmap that urgently addresses and alleviates your most intense supply chain pain – so that your company can realize fast and significant operational gains from your investment.
Supply chain problems – like human health problems – are complex, but with the right “doctor” the solution can be simple.