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Supply Chain Planning 4.0

Portrait of Carsten Bock
Senior Partner
Stuttgart Office, Central Europe
+49 711 3275-7223
February 19, 2018

In a fast-paced and dynamic world, change is the only constant. Manufacturing companies that control their own production must ensure that their supply chain planning (SCP) systems are flexible enough to navigate the complexities that this changing world presents, particularly in the age of digitalization. Unfortunately, many firms use outdated supply chain planning practices that reduce their operational efficiency and damage their financial performance. Manufacturers can prepare for these challenges – and even profit from a rapidly changing business environment – by implementing a contemporary and future-ready supply chain planning setup. In a word, SCP 4.0.

Today's companies need a lean, responsive, digitized supply chain planning setup. Welcome to SCP 4.0.
Today's companies need a lean, responsive, digitized supply chain planning setup. Welcome to SCP 4.0.

SCP 4.0 envisions a lean, responsive and digitized setup that fosters data-driven business decisions. It hinges on an agile organization backed by an interconnected system landscape, providing accurate source-to-shelf visibility in real time. This is assisted by advanced analytics tools that aid more accurate forecasting and more effective scenario visualization, ensuring rapid, effective and informed decision-making.

In this study, we first present the results of an extensive survey carried out among supply chain and operations professionals. This looked at the readiness of the supply chain planning setup across the globe. What state is it in, and where do the chief pain points lie?

Next, in a special feature, we examine some of the latest trends seen in supply chain planning. We identify four key tendencies: the integration of previously separate planning horizons, the appointment by companies of a "collaborative planner" to oversee the interconnected supply chains of their suppliers and of the company itself, the application of advanced scenario planning tools, and the use of data analytics to forecast demand better.

Based on our experience working with companies, we then present a practical, three-phase approach for supercharging your supply chain planning performance. The three phases are: analyze your current position, shape a vision of the future (including the target processes, organizational setup and systems), then implement this new vision.

Finally, we look at the investments required to trans¬form supply chain planning systems, and the tangible and intangible benefits. Generally, we expect to see a payback period of two to four years, with an internal rate of return of 15 to 25 percent. Intangible benefits include improved employee satisfaction, greater capacity utilization, better process control and adherence, and increased supply chain agility. Implementing SCP 4.0 is a lengthy process – but ultimately a rewarding one.

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Supply Chain Planning 4.0

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Today's companies need a lean, responsive, digitized supply chain planning setup. Welcome to SCP 4.0.

Published February 2018. Available in
Portrait of Sven Siepen
Senior Partner, Managing Partner Switzerland
Zurich Office, Central Europe
+41 79 792-7374
  • Photos simonkr / iStockphoto; Roland Berger