25 THE OUTSIDE-IN PLANNING HANDBOOK | 2023
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Unlearning
The future state requires the rethinking of the planning architecture. In the redefinition, the engines sense shifts in multiple flow inputs simultaneously using a learning engine informed by a planning master data layer. Various inputs are tested with each data analysis to understand the changing significance and relative importance of multiple demand inputs (typically five to seven). Accomplishing this goal requires using a graph database and an ontological framework or cube to manage reference data. The master data layer ensures that planning factors like lead times, conversion rates, and currency valuations are updated based on market shifts. In Figure 12, we share a conceptualization of the
change in the demand model. Contrast this future state with the current state in Figure 8. These demand flows are mapped to supply to drive bi- directional orchestration. Note the alignment of the engines to a balanced scorecard versus using functional metrics as an objective function as shown in Figure 13. The knowledge graph helps visualize flow and drive insights, while the unified data model helps drive semantic reconciliation of multiple planning systems. (The average client has 7-9 planning technologies and over fifteen ERP instances.) The ontological framework assigns the rules and policies based on flow.
Figure 12. Redefinition of Demand Planning Engines
ROLE-BASED VIEWS OF FLOW
INPUTS
DATA MODEL
PLANNING MASTER DATA
Forecast Value Added | Bias | Error (MPE) | Latency | Analysis of Shaping & Shifting | Bullwhip
The demand and supply flows are aligned using pre-defined orchestration levers in bi-directional orchestration. The levers include changing channels, demand shaping strategies, postponement, alternate routing and sourcing, shifts in the bill of materials, and alternate distribution and manufacturing strategies. Note that these bi-directional orchestration levers must be established as a part of the network design layer before S&OP to balance the demand and supply flows and create a feasible plan. As shown in Figure 14, bi-directional orchestration is an integral part of the S&OP planning and execution processes. In the training sessions, the technologists and consultants
struggled with the concepts of bi-directional orchestration, questioning why today’s definition of S&OP was insufficient. In contrast, business leaders grasped the change more quickly, exhibiting excitement while pushing to test the ideas. The awareness of consultants and technologists was absent on the issues of managing constraints across make, source, and deliver simultaneously. Most consultants and technologists are comfortable with current taxonomies and less willing to challenge the status quo. In the process, do not become distracted by the argument that concurrent planning is the same as bi-directional orchestration. Both are important. Side-step the discussion by getting clear on definitions through the insights in Table 8.
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