How to respond intelligently to changes in supply and demand

How to respond intelligently to changes in supply and demand

Microsoft’s manufacturing team explain the benefits of an AI planning platform

Richard Humphreys |

Almost one in every two business leaders say that ineffective business processes impair their ability to plan, forecast, and budget. Planning processes can take upwards of a month and, by the time plans are built, they are based on outdated data with little connection to current business conditions. Because of time and information constraints surrounding existing planning processes, companies struggle to maintain the agility necessary to take advantage of opportunities and mitigate risks.

When business moves so quickly, how can manufacturers be sure they are making the right decisions? Imagine a world where intelligent, agile and collaborative business planning empowers manufacturers to make profitable decisions in real-time. Isaac, Melinda and Jake live in this world and work at Company AI. Let’s look at how the three of them leverage a premier AI planning platform to automatically analyse real-time data and deliver insights where they’re most needed, enabling manufacturing agility and driving profitability. 

Recognise and automatically propagate new opportunities across the organisation
Isaac, a sales lead at Company AI, sees an e-mail from one of his accounts while walking into his office one morning. The customer wants to know if Company AI can fulfil an order, as another manufacturer can’t meet demand going into a busy holiday season. Isaac knows this is a golden opportunity but only if his company’s production line can increase supply without dramatically raising costs.

Isaac opens his integrated business planning solution from his phone and quickly makes a note that the opportunity is there if his company can manage the costs of increasing supply. As soon as Isaac creates the notification, the system recognises key words and alerts the relevant departments.

Match supply and demand to ensure production stays profitable
In production, Melinda receives the notification. As a demand planner in the production department, it’s Melinda’s job to make sure the production upsurge won’t have a negative impact on the company’s current baseline plan. After seeing Isaac’s note, she creates a new what-if scenario to see what would happen if the company doubled production.

Once she’s entered the necessary information, Melinda saves her new what-if scenario and the system automatically alerts Jake – the appropriate supply planner. He sees the new what-if scenario and immediately runs a supply/demand match algorithm that shows how Isaac’s new sales opportunity would affect the supply chain. The algorithm models material, capacity, lead-time constraints, and costs across the entire supply chain. It then gives him clear predictions of the added supply’s total costs and the gross profit of the opportunity.

In this case, it’s clear that this is a good opportunity – the upsurge in production will cost Jake’s supply chain an additional US$900,000, but the company stands to make around US$7 million. Jake responds to Isaac’s original note that it would be profitable to move on the opportunity.

Move quickly to take advantage of profitable opportunities
It’s now late morning, and Isaac is thinking about where to grab lunch when he gets an alert from Jake. Isaac sees that both Melinda and Jake have run the numbers, and he now has the approval of both production and supply chain to move forward with the production increase. He opens the e-mail he received earlier that morning and confidently responds to his customer that his company is happy to fill the shortage.

An integrated business planning solution to help your business
In the above example, Isaac, Melinda, and Jake were able to quickly recognise an opportunity, predict its effect on supply and demand, and determine profitability through their Integrated Business Planning solution. For companies that want to make the most of their opportunities, the benefits of an intelligent, agile, and collaborative planning solution are obvious.

o9 Solutions, built on Microsoft Cloud technology, offers a powerful integrated planning solution built on a premier end-to-end planning platform. This solution enables companies to increase operational agility, intelligence, and collaboration and expand planning functionalities even further as business needs grow. To find out more about the o9 Solution, check out the solution on Microsoft AppSource.

This article was originally published on the Microsoft manufacturing industry page.



Subscribe to the Technology Record newsletter

  • ©2024 Tudor Rose. All Rights Reserved. Technology Record is published by Tudor Rose with the support and guidance of Microsoft.