Traditional supply chain planning (SCP) tools have been around for many years and are among the most adopted SCM technologies. However, we are reaching a tipping point where the complexity of supply chains is defeating SCP tools in the battle to come up with an overall optimized plan.

To provide the right type of capability for supply chains today and in the future, the way we think about supply planning has to change, as do the tools that support planning.

As supply chains become more global, the planning models become larger and more complex, with increasing connections between the different nodes where resources and facilities are shared across a more expansive supply chain. This is a symptom of supply chains moving from being local to regional to global in nature. As the planning models become larger, some SCP tools struggle, due to scalability and performance issues, to plan and optimize these larger models, leaving islands of planning in situ with local optimums, but a suboptimized overall plan. This potentially leaves companies having to cope with fragmented data, process and analytical models across a supply chain. As supply chains migrate from local to regional to global, there will be a lack of planning visibility and integration across the supply chain, unless there is a planning system that can unify the plans across the complete internal supply chain. This lack of visibility inhibits the trade-off exercises needed to find a profitable balance point.

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Source: Gartner Inc.