Today’s Supply Chain Planning (SCP) still lives in the past. This is a provocative statement, but many companies in the industry can attempt a rational analysis and make their own judgment on how capable they really are of improving the planning of the supply and production chain or how much FLEXIBLE they really are.
Planning is still based on an obsolete paradigm encapsulated in the material resource planning algorithm (MRP), which first appeared in the early 1960s. The entire premise of this paradigm is the definition of an accurate plan for the supply chain, which can then be executed. If there are accurate demand plans, bills of materials, delivery times and capacity levels, the upstream supply plans can be accurately calculated.
The basic hypothesis of this mechanism is that if there is an accurate plan, the goals set are achievable. However, there is a variable that can overturn everything: uncertainty. And as the old military saying goes, “no plan survives the first contact with the enemy”.
The real enemy of planning based on accuracy is uncertainty. It is the variable that can transform an accurate plan into a failure.
In the early 2000s supply chain was still quite simple and could rely on more stationary conditions, such as less uncertainty. Fewer SKUs, fewer storage locations along with lower consumer expectations.
Longer decision cycles were allowed.
Today these conditions have been disrupted and the world of the supply chain is more complex and uncertain than ever.
Technological advancement and its application to SCP solutions has led to improvements which, however, being modest and incremental, have not been able to bring great benefits. The problem remains in the planning paradigm “create an accurate forecast then propagate the demand ‘signal’ upstream through the supply chain”
How can a company dominate uncertainty and continue to manage its supply chain effectively? Temera is strongly convinced that the answer consists in ‘reinventing oneself’ and designing a new model: that of the Resilient Supply Chain.
Resilient planning is defined as a set of medium and long-term plans that mitigate uncertainty by ensuring that the right degree of adaptability is integrated, making the activities in the short-term pipeline more likely and easier to execute. A distinctive feature of resilient planning is that the short-term planning algorithm does not always consider the supply chain end-to-end, rather it favors leveraging a single decoupling point and increasing the guarantees of a truly feasible execution.
In order to build a resilient Supply Chain it is mandatory to build a “digital twin”, or a digital representation of all activities needed to manage raw materials and components supplying along with a production phase workflow.
The digital twin is the means that makes it possible to track events, such as goods movement or order updating , and derive their implications on all connected supply chain stages, through predictive and prescriptive analyzes along the supply chain.
These resilience tests allow the company to identify relevant buffers and planning regimes (for example, deferral and decoupling, segmentation) that can lead to an overall improvement in the resilience of the supply chain.
Temera, thanks to its deep knowledge of IoT and RFID solutions applied to the Fashion & Luxury industry, can help companies to build a resilient supply chain.
Embedded tag management, working phases progress triggering, achieved through automated readings of RFID with UHF or NFC technology, are crucial capabilities to give life to the digital twin of the supply chain necessary to carry out simulations.
An advanced data analysis environment, equipped with a ‘data integration’ engine capable of bringing together information from heterogeneous systems, completes the set of tools necessary to be able to face a project aimed at reorganizing the supply chain following innovative resilience parameters.
Additional benefits come from the capability to exploit pre-trained Machine Learning models to convert unknown uncertainty into known variability.
Resilient is better and with Temera it can be real.
Temera has always had in its DNA the constant search for innovative solutions to successfully face the challenges of an increasingly dynamic market.