Defining and testing the value proposition of outside-in planning processes

Abstract

Traditional planning processes are inside-out. The focus is on mining the patterns of orders and shipments and synchronising demand and supply based on enterprise data. The problem with this approach is with product proliferation and item complexity, demand latency increases, making the order signal out of step with the market by weeks and months. In addition, as supply chain leaders attempt to better align supply chains with markets in the face of months after months of disruption, historical patterns of orders and shipments are irrelevant. The reason is simple. In a volatile world, history is not a good signal to drive decisions. To find a solution, o9 Solutions and Supply Chain Insights partnered with a group of business leaders and academics to test the use of multiple streams of demand data and determine the value of using market, or channel, data versus driving demand off of order or shipment patterns. In this paper, we share insights and the journey. While the opportunity is tremendous and the value clear, the biggest issue for technologists and business leaders is unlearning conventional paradigms. As the use of market data makes many of the traditional planning assumptions obsolete. Here the reader will learn the lessons from the testing and gain insights to adapt their planning processes to be more outside-in.