Complex Supply Chain Planning solutions may not always be the best or the most efficient. When designing a supply chain planning solution or a process it is very important to follow K.I.S.S principle (Keep It Simple, Stupid), a design principle noted by the U.S. Navy in 1960 stating that most systems work best if they are kept simple rather than made complicated; therefore, simplicity should be a key goal in design, and unnecessary complexity should be avoided.
Simple supply chain solutions are always difficult to design as it requires looking deeper into the problem/process. One of the reasons why we tend to configure complex solutions is because we think that a simple solution is too easy and because it is too easy it may not work or may not address the business problem/process. To illustrate the importance of a simple solution I will share my experience of working with one of our current clients.
The client has been using our Demand Planning solution since 2016. The initially implemented solution had a 7-level hierarchy with a statistical forecast engine running at each level and forecasting data getting aggregated and disaggregated at each level as well. This type of complex configuration resulted in a solution running extremely slow, the output and process not in-line with the business process, an unhappy customer with multiple service desk incidents and a difficult product to support.
Multiple conversations, change order requests, and help desk support incidents later the decision was made to re-implement the demand planning solution from ground-up. This means revisiting and understanding the client’s business process in-depth and designing a solution that is simple, easy to be trained on, faster, and easy to support.
Going into the re-implementation, the goal of the project was to address all business requirements while keeping the solution simple and easy to train, adapt, and navigate. Multiple design sessions and probing questions later the final architecture of the new solution was much simpler with 4 levels of hierarchy with topmost level for reporting purpose only, execute statistical engine at aggregated level 2 only for better forecasting results and use top-down and bottoms-up mechanism to push the data for consensus.
The new design was simpler and more effective. It enabled collaboration between departments, was easy for end-users to get trained and provided reporting flexibility and automation. In a passing note, the easier the supply chain solution is to understand and use, the likely hood of clients adopting and engaging is higher. The KISS principle is a great rule to apply while designing a supply chain process/solution, but at the same time, we need to ensure it does not compromise the functionality and business requirements.