How Decision Intelligence is Transforming the Supply Chain
If the past few years have taught us anything, it’s that the past simply does not predict the future for supply chains.
Supply chain professionals and technology providers have been hyper-focused on firefighting in response to the unexpected. The reality is, it’s the ability to be predictive, prescriptive, and proactive— identifying issues and responding with the right actions at the right moment in time — that will reveal a new source of competitive advantage for supply chains.
With that in mind, what can we gain when we stop focusing on responding to disruptions and, instead, reimagine the way we make decisions?
A recent found that, in an analysis of supply chain KPIs from 2011 to 2020, delivery performance declined independently of inventory and staffing levels. Even though companies boosted inventory and staffing levels at the start of the COVID-19 pandemic, they still could not prevent a steep decline in service.
The core issue is a need to improve decision making. As the report authors note:“Most [companies] still focus on using AI for analytics and prediction—for example, to forecast demand and plan production. Companies have not pursued the more valuable application of using AI to make recurring decisions by recognizing patterns in big data that humans cannot see.”
This is the opportunity for decision intelligence, whichGartner definesas“a practical domain framing a wide range of decision-making techniques bringing multiple traditional and advanced disciplines together to design, model, align, execute, monitor and tune decision models and processes.”
To put it in layman’s terms, decision intelligence makes it possible not only to gather and harmonize data from enterprise systems and data sources, then use it to provide data-driven recommendations — but also to execute those decisions by writing back to transactional systems, capturing the outcomes of decisions and their context for the future.
This unlocks a new opportunity for supply-chain planners by giving them the ability to automate decisions based on business rules and strategy.
Historically, planning solutions have been focused on identifying and providing a suggested response to an event, and they are very good at that. But the problems we should focus on fixing are the inefficiencies of performance across supply chains that prevent companies from making better decisions at the moment of maximum impact.
With technology that automates decision making, companies can avoid risk and capitalize on opportunity, making it possible to keep pace with the volume and velocity of decisions that must be made each day.
As BCG states in its report,“Planners need to understand the insights they receive, but typically they do not have enough time to digest all the inputs and make good decisions.
