“Scenario planning is making assumptions on what the future is going to be and how your business environment will change overtime in light of that future. More precisely, Scenario planning is identifying a specific set of uncertainties, different ‘realities’ of what might happen in the future of your business.”
Source: SME Strategy Management Consulting
Predicting the future has long been the nefarious domain of fairground fortune tellers and often somewhat shady backstreet, self-proclaimed clairvoyants. But crystal balls and the ‘knock if you can hear us’ antics of such individuals have never been associated with the corporate world and, even if they were, couldn’t be relied upon successfully to peer into the dim and (not so) distant future. It has long been a truism that change is the only constant and in today’s business domain, that axiom has never been more apt. The global nature of Supply Chains, wars, disruption, changing world orders and seismic shifts in geopolitical policy; all of these things and more come together in an unholy coalescence to create uncertainty, doubt and confusion in equal quantity. Predicting and trying to plan for such ongoing changeability has never been easy but today’s complexities and speed of change demand an agility and operational flexibility which only sophisticated technology-based solutions can deliver. And this layers on yet another problem for smaller organisations…
Why is scenario planning needed?
In the world of Supply Chain Management such businesses often rely on manual processes and, probably at best, the good old spreadsheet to manage both their substantial volumes of data and also their Demand and Supply procedures. Access to highly developed, state-of-the-art software-based solutions can be expensive and therefore, very often perceived as only the domain of larger industry players which can afford the investment necessary to run more holistic planning. This financial barrier becomes a constraint, against which their far more agile and flexible nature due to scale and size cannot compete. However, times are changing – and the world of Advanced Planning & Scheduling (APS) for Supply Chain Management is now more affordable than ever.
Kinaxis’ Planning One Software as a Service (SaaS) platform has been purposely designed to offer the perfect entry in automated Supply Chain planning. It provides the functionality necessary to achieve the Demand/Supply balance whilst delivering business value against the challenges faced by smaller organisations. The fact that there is also a mature upgrade path to even more powerful Kinaxis solutions is a plus but in keeping with the theme laid out in this article, it is tackling head-on the thorny problem of predicting an uncertain, ever-changing future which perhaps has the most relevance and associated benefits: scenario planning.
What exactly is scenario planning?
As our SME Strategy Management Consulting group’s quote says, “Scenario planning is identifying a specific set of uncertainties, different ‘realities’ of what might happen in the future of your business”. When setting up a Supply Chain solution to manage complex processes and protocols, it is natural to mimic today’s patterns so that it is possible to manage business in a more efficient manner. This provides consistency and cost-savings, both of which are admirable business drivers and objectives. However, the increasingly dynamic nature of Supply Chains means that a ‘static’ model fails to take advantage of necessary change and future opportunity – and this is where scenario planning plays such an important role.
Scenario planning is far from a new concept. However, the automated strategic ‘what if?’ contemplations enjoyed by larger industry players for so long are now available to all. Kinaxis Planning One allows organisations to model new paradigms using existing data, comparing one against the other to determine the improvement (or otherwise…) in a desired business outcome. For example, how would a reduction in inventory availability in one geographic location impact customer service? What might the result be if a supplier was unable to fulfill an order on time due to a logistics disruption? Even – heaven forfend – an analysis of the consequences of a country imposing massively increased trade tariffs…
In a world of heightened uncertainty, complexity and confusion, automated Supply Chain scenario planning is now available to EVERY scale of business. A focus on the business challenge, not the technology, should be supported by carefully but clearly defined desired business outcomes. P1 Consulting can help to prioritise such challenges and the value their resolution can bring, allowing organisations to recognise the most value from investments and creating a roadmap combining the critical elements of people, process and technology for digital Supply Chain success.
That’s a scenario all organisations should enjoy.
