Gartner Research: Predicts 2016: Reimagine SCP Capabilities to Survive

Gartner is predicting big near-term changes in supply chain planning. In Predicts 2016: Reimagine SCP Capabilities to Survive, “As many companies will attest, today's supply chains have to operate in environments that are anything but a steady state,” Gartner says. “As globalization, unpredictability, volatility, complexity and speed continue to increase, leading companies have to find ways to improve their planning. In addition, we now have to factor in digitalization and the Internet of Things.”

Gartner focuses on demand sensing to meeting these challenges. “They will do this to provide a more accurate, daily-level forecast to help drive more accurate replenishment and inventory placing or to provide a fast, often scenario-based, event-level planning capability that supports an assessment of execution deviations from the agreed plan,” they say. “Companies that don't have demand-sensing and/or short-term supply response planning capabilities will likely be at a competitive disadvantage."

Gartner says that in the next two years an overwhelming majority of organizations “will conclude that their current descriptive analytics solutions will not support their supply chain realities.” They will need advanced analytics—prescriptive and proactive, not simply explanatory—to be effective.

Gartner explains that many descriptive analytics solutions rely on fixed and cumulative information, and can’t process fast-flowing data in diverse structures and formats. “Additionally, current descriptive analytics solutions are typically inward-facing, only capable of presenting insights of the organization's internal performance, with little visibility across the extended supply chain,” they state. “Most of the current descriptive analytics solutions barely go beyond reporting on past performance, with no support for proactive analysis and execution.”

That’s crucial, the report says, because a large majority of firms expect half their revenue to be tied to digital business in five years or less—meaning they will be fulfilling demand in an exceptionally dynamic environment. “Companies must be able to accurately and quickly answer the ‘So what?’ and ‘What to do?’ questions,” Gartner says.

“For a few years, Gartner has been predicting an inflection point in the SCP market will occur around 2016 and 2017,” they say. “What was suitable SCP technology five years ago is not suitable today, and traditional planning systems will no longer be fit for purpose.”