Supply chains are becoming increasingly complex, and global distribution issues force companies to modernize their forecasting tools.

FREMONT, CA: Businesses must update their supply chains. That was clear even before the COVID-19 outbreak started when supply chains were hampered by clogged ports, a lack of parts, and a manpower shortage. Supply chains' expanding worldwide reach has made it harder for companies to predict demand and decide how to meet it. Furthermore, supply chain leaders haven't helped themselves by sticking to manual processes and out-of-date software, including one extensively used application whose provider will shortly quit providing maintenance. Next-generation systems are gaining traction among innovators, and the rest of the industry is starting to catch up. AI, data analytics, and machine learning are already being used in new applications to hasten decision-making and open the door for autonomous planning.

Costly and time-consuming upgrades

The reason why companies hang on to older systems is it takes time and money to replace them, even if upgrading those systems would have substantial benefits for the organization. The number of resources required for an upgrade will differ depending on the company's supply chain's complexity. The supply chain planning systems used in industries with highly complex supply chains, such as pharmaceuticals, typically take considerable time to implement, especially for new systems fully. An industry with fewer complex supply chains, like the consumer packaged goods industry, can spend two to three years implementing a new system.

Selecting vendors is crucial

Supply-chain leaders upgrading planning IT systems evaluate two potential vendors on average before choosing which system will meet their specific planning needs. In the supply chain, supply chain leaders usually assess vendors based on various criteria, including functional requirements, how the system integrates with existing supply-chain applications, and up-front and operating costs.

Failures in the initial implementation

Few executives a lack of consensus regarding a new system's technical and process requirements posed the most significant barrier to launching a project. The new supply chain planning system's direct impact sometimes doesn't meet their expectations. At the same time, few executives have trouble forming a compelling business case for switching to a new system to justify making the switch.