Can you create a world class supply chain by investing in Advanced Planning and Scheduling (APS) Systems?

Disruptions to the supply chain are forecast to continue and every part of the supply chain from sourcing to the end customer are feeling the impact. Less mature supply chains have become exposed to these challenges which is leading to organisations to re-evaluate their supply chains and in particular legacy supply chain systems and turning to new more advanced technologies such as APS systems.

However, can organisations with low supply chain maturity simply invest multi-million dollars replacing legacy planning systems with APS systems and leap to a world class supply chain to cope with these global challenges?

Advanced Planning and Scheduling (APS) software goes beyond the capabilities of basic planning systems by incorporating advanced algorithms and methodologies to help organisations make more efficient and informed decisions. They provide advanced features such as Multi-Echelon Inventory Optimization, advanced planning algorithms to run network simulations, embedded data science, autonomous planning, near-real time planning capability, and advanced analytics.

APS Software vendors argue that these advanced features can balance speed, service, agility and resiliency with cost and efficiency. That the software can incorporate robust risk management strategies to anticipate and mitigate disruptions, such as natural disasters, geopolitical events, or supplier issues.

The advanced capabilities of these new technologies are undisputed but achieving world-class supply chain management is a complex and multifaceted endeavour that involves optimising various elements, including people, processes, as well as technology.

‘Leaping’ to a world class supply chain from a position of relatively low maturity is not feasible as the time taken to achieve world class will be determined by the change journey of the slowest elements which are typically process and people. Ideally, organisations should aim for a balanced transformation that addresses people, process, and technology simultaneously. Neglecting one aspect can lead to suboptimal results and inability to achieve true world class supply chain performance.

So, if you cannot ‘leap’, how can an organisation accelerate this change journey to a world class supply chain?

Focus on the low mature / poor performing processes first:

APS Systems and product footprints typically cover the full end to end supply chain from demand planning, transport planning and execution, network planning and inventory planning, production scheduling, material planning and procurement.  Whilst benefits and improvements can be achieved by implementing point solutions / modules, the full benefits of APS capabilities will not be achieved if the maturity of poor processes are not addressed. For example, having the capability to run Multi-echelon Inventory Optimisation processes but having poor demand management processes will lead to either over stocking or poor customer service. Organisations do not have infinite capacity for change or the financial resources to deliver the full APS process scope in one phase, so prioritisation is essential. Focus on the organisation’s process pain points and not just the ‘more interesting’ advanced processes.

Invest in people and organisational capability uplift:

While it is theoretically possible to make significant improvements in processes and technology without an immediate upgrade in people maturity, it would likely be a challenging and incomplete transformation.

If the people within the organisation lack the necessary skills, knowledge, or experience, they may struggle to effectively implement and sustain advanced supply chain practices and APS technologies. Invest in conceptual ‘process’ training as well as hands-on systems training and ideally begin the journey ahead of any technology implementation.

Low people maturity may result in resistance to new processes or technologies, making it difficult to drive meaningful improvements without first addressing the cultural and organisational readiness for change. Take steps to understand the current readiness of the organisation and prepare a robust change management plan.

Sustainable improvements require a committed and capable workforce. Without a focus on people development, there may be challenges in maintaining and building upon initial gains. Investing in a Supply Chain Academy can be a worthwhile investment for sustaining improvements. An academy provides specialised education and training focused on supply chain management. This can lead to a more knowledgeable, skilled, and committed workforce. Offering training and development opportunities can be a powerful tool for attracting and retaining top talent. Attracting and retaining APS talent is going to be a challenge due to a lack of APS skills and experience within the market. Accelerate capability uplift through external recruitment but invest heavily in the current workforce.

 In summary, investing in APS systems can accelerate the journey to world class supply chain performance but must be done whilst simultaneously addressing process and people maturity. World-class supply chain management, involves assembling a skilled and collaborative workforce, implementing efficient and transparent processes, and leveraging advanced technologies to optimise operations, enhance visibility, and respond swiftly to market changes. This holistic approach ensures that the supply chain functions at the highest level of excellence and efficiency, ultimately delivering value to customers and stakeholders.

Stewart Williams FCILT

< Back