The Power of Probabilities: How to Make Better Supply Chain Decisions
Large companies across the globe have spent years and millions deploying Advanced Planning Systems to manage their supply chain, yet significant waste and lost profits persist, and operational and financial improvement expectations were not met. How can this be?
Advanced Planning Systems today are deterministic and force you to use fixed inputs and simplified assumptions. You can make do with these limitations when generating long-term plans and supporting a Sales & Operations Planning (S&OP) process. But when you are forced in the “execution horizon” to convert plans into actions in your supply chain, these limitations
create dire consequences for your financial statements and quarterly earnings calls.
Yet these fatal flaws are the foundation on which virtually all supply chain planners and executives at every large company make decisions. The problem, of course, is that nothing in the real world or in your supply chain is fixed or simple. Instead, it’s variable, complex, and volatile. These disconnects between what “theoretically” should happen and what is “most likely” to happen force organizations into Excel spreadsheets. Where people are doing their best to apply knowledge of probabilities that current systems can’t comprehend as they cross the chasm from planning to execution.
At Noodle.ai, we believe that injecting the power of probabilities to supercharge your supply chain planning and execution systems is the breakthrough you’ve been waiting for. Empowered by artificial intelligence and machine learning advancements, we have released the first probabilistic planning platform. Already, it has delivered unprecedented levels of productivity, efficiency, and cost-savings to some of the world’s most complex supply chains.
As a “system of intelligence,” Noodle.ai complements ERP and planning systems by:
- Predicting the most likely supply and demand by understanding probabilistic distributions instead of fixed values.
- Identifying ‘Value-at-Risk,’ a customizable measure of financial impact to assess the health of your supply chain plans when factoring in probabilities.
- Prioritizing what needs attention to maximize decision-making confidence and impact.
- Recommending risk-mitigating actions through planner-orchestrated or automated
workflows. - Integrating decisions into planning and execution systems to accelerate resiliency and
ensure value capture.
Utilizing the power of probabilities to make risk-adjusted decisions is a natural part of how humans navigate everyday life. You can apply this power to your business and your supply chain decisions. For example, if you’re operating a make-to-stock supply chain, it must feel like the deck is always stacked against you. Demand variability, supply disruptions, global pandemics, and you’re using the same ‘old math’ to make bad bets that have proven to have bad outcomes in the form of wasted inventory, time, and money.
Our mission is to create a world without waste by helping you use ‘new math’ to make better bets that have proven to have better outcomes. As a result, revenue is captured, service levels improved, excess and obsolete inventory reduced, premium transportation costs avoided, a greater sense of control of your business, and ability to influence operational and financial outcomes.
To supercharge your planning stack by making better bets, click here to speak with an expert.
Author Bio:
Meet Tim Krug, the Chief Revenue Officer at Noodle.ai. He oversees Sales, Marketing operations, and go-to-market strategy. Tim has a wealth of experience, having spent a decade at Kinaxis where he helped organizations adopt response management techniques and implement concurrent planning. He spent four more years at Medallia before returning to Supply Chain with a mission to bring about the next breakthrough in performance through probabilistic planning.