The Autonomous Self-learning Supply Chain

I have to admit, its hard work trying to keep up with the latest lingo and thinking when it comes to supply chain planning. Suffice it to say, the concept of digitizing the supply chain is not only cool, but offers tremendous value to those companies that achieve it…and it will, over time, become the norm, in my humble opinion.

A number of companies and supply chain technologists are pursuing a vision they describe as the – a supply chain that is largely self-learning, adapting and holistically focused on continuously meeting the needs of consumers and customers.

A lot of folks, when they hear this, shutter at the thought, or dismiss it out of hand…poppycock they say, this will never happen and is a futurist’s wet dream.

I beg to differ and not only essentially agree with the vision, but can offer initial proof that the concept not only has merit, but also tremendous potential.

At one of our most recent retail clients, they use the process to plan and manage the flow of inventory from supplier to consumer. What’s brilliant and consistent with the idea of the autonomous and self-learning supply chain is that they have, within their solution, a digital twin of their entire, extended supply chain.

What’s a digital twin?

A digital twin is a complete model of the business, whereby all physical product flows, both current and planned, are digitally represented within the solution – a complete, up-to-date, real time view of their business; containing all projected flows from supplier to consumer for an extended planning horizon of 52 or more weeks.

The Flowcasting solution and digital model of the business enables what we often refer to as continuous planning.

The process and solution re-plans and re-calibrates the entire value chain, digitally, based on what happens physically. Changes in sales, inventories, or shipments will result in re-forecasting and re-planning product flows – to stay in stock, flow inventory, and respond to real exceptions or unplanned events. The process, solution and supply chain is self-learning.

The result is that the Flowcasting process/solution can manage the flow of information and trigger the movement of goods, digitally, on auto-pilot, a vast majority of the time—requiring planner input only when judgment and experience are needed.

When I think about how our client is using the Flowcasting process/solution to plan, I would estimate 95% of the product flows are initiated automatically (e.g., digitally) based on the solution interpreting what yesterday’s sales and inventory movements mean, and then re-adjusting, self-correcting, and altering current and planned product flows.

Furthermore, as part of the implementation, we worked with the planners and semi-automated how they would handle certain exceptions, based on learning from initial planners responding to these exceptions. It’s certainly not a stretch to think that, at some point, a machine/algorithm could learn too and respond to these types of anomalies in order to enable the smooth and continuous flow of product.

And what are the results of using a self-learning, self-correcting and fairly autonomous planning process (i.e., Flowcasting)?

Highest in-stocks in company history, increased sales, improved inventory turns, reduced costs and, most importantly, happier customers.

Please understand I’m not talking about a Skynet scenario here. I firmly believe that supply chain planning solutions can largely become autonomous and self-learning, but will always require some human input for situations where intuition and judgement are required. But, I’d argue this will be the exception and is also a form of a self-learning supply chain (e.g., people learn from experience).

The autonomous, self-learning supply chain is quite a vision. And, like all visions, it needs initial pilots and examples to move the ball forward, provide initial learnings and help people understand what is and might be possible. Our recent retail implementation of Flowcasting, we believe, helps the cause and should provide food for thought for any retailer.

So to the folks and companies pursuing this vision (most notably JDA Software), I can only offer best wishes and the advice from Calvin Coolidge…

“Press on. Nothing in this world can take the place of persistence”.

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