6 Key supply chain challenges—solved with integrated AI planning
Integrated AI planning can help address key supply chain challenges by enhancing operational visibility, enabling collaboration with suppliers, and efficiently helping to mitigating the risks of disruptions.
Supply chains operate with a lack of visibility that has become problematic in a world that is complex, multi-tiered, and filled with the ever-changing risk of disruptions.
Incidents that disrupt operations are magnified when visibility is absent. There is a cause and effect as customer fulfillment dates are missed or the assembly line is slowed due to a shortage of a key part or raw material. Invisibility strains inventories, puts assembly lines at risk, and fails to meet customer expectations.
The cornerstone of operational success is visibility. It means your supply chain can support a trust but verify approach to suppliers. Knowing when issues occur opens doors to collaborating on solutions. Supply chain planning and technology can enable and enhance operational visibility and collaboration. With integrated AI planning that includes tools like scenario planning and digital twins, you can maximize the potential from having visibility and address the ever-changing risk of disruptions.
Integrated AI planning can help solve supply chain’s top challenges.
Here are six scenarios outlined in a format featuring a challenge with a before—the current process and an after—the updated process utilizing integrated AI planning.
Lack of visibility
Before
Lack of visibility into components and materials required to make goods that then flow from origin to destination. When an incident or disruption occurs, supply chains are in reactive mode with few options.
Solution
Integrated AI Planning
After
KPMG combines technology and data analytics with strategy that helps supply chains capture, analyze, and share information across the supply chain. Integrated AI planning is designed to provide supply chains with better decision-making, greater visibility, and optimal coordination with suppliers. Imagine if your supply chain could go from reactive mode to proactive with impactful steps taken.
Geopolitical uncertainty
Before
Geopolitical uncertainties disrupt supply chain routes like the case with the Red Sea. Rebel attacks on container ships force ships to alter course, which can add 10-12 days to the delivery date and throw schedules out the window.
Solution
Integrated Business Planning
After
A plan to manage disruptions outside your control exists. With integrated business planning (IBP) you can better anticipate adverse global events with a clearer focus on decision making, escalation paths, strategic horizons, as well as engage financial scenario analyses. With IBP, supply chains can navigate around disruptions and make better decisions when geopolitical uncertainty is present.
Overfocused on short-term processes
Before
Many companies over index the short term. It’s understandable. Addressing customer needs, inventory costs, and production schedules are more present concerns and help drive efficiency. However, integrated AI capabilities enable long-term strategic planning that helps ensure sustainability and competitive advantage in the long run.
Solution
Cognitive demand planning
After
Cognitive demand planning, a critical part of integrated AI planning, engages various advanced predictive techniques, including leveraging internal and external data sets, as well as utilizing advanced statistical techniques and machine learning tasks, to improve forecast accuracy.
Scenarios produced manually
Before
Some companies still produce scenarios manually. As supply chains have grown into multiple interconnected processes involving procurement, production, inventory management, transportation, and distribution, it’s become too complex and time-consuming to compute manually or worse, leads to inaccurate projections.
Solution
Network model analysis/digital twin scenarios
After
Generating accurate scenarios requires well-implemented technology solutions utilizing good-quality data. For example, a network model analysis can determine the optimal configuration of facilities, distribution centers, and transportation route to minimize costs and maximize efficiency. An AI tool like digital twins can facilitate simulating different scenarios and show how they react before implementation.
Regulations worldwide
Before
Regulations like Germany’s Supply Chain Due Diligence Act and US SEC climate disclosure rules add a compliance task to supply chains.
Solution
Data for disclosures and reporting compliance
After
Supply chain transparency and traceability help supply chains meet sustainability objectives and comply with supply chain regulations. Both depend on accessing data and having a single source of truth, which are essential for integrated AI planning and can be sourced for compliance and disclosure requirements.
Shortage of trust
Before
In a situation where a supply chain turns to Tier 2 and Tier 3 suppliers, there can be an acute lack of trust. When issues occur, your supply chain can be left in the dark guessing whether the supplier will deliver on time or be late.
Solution
Supply Chain Plan Collaboration
After
A greater collaboration between company and trading partners builds trust and helps ensure accurate forecasts and shipments arrive on time even when issues arise. By leaning into integrated AI planning, your supply chain is in a better position to transition from reactive and siloed to process managed and highly collaborative.
KPMG ranks #1 for quality AI advice and implementation in the US
According to senior buyers of consulting services who participated in the Source study, Perceptions of Consulting in the US in 2024, KPMG ranked No. 1 for quality in AI advice and implementation services.
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How KPMG Supply Chain Services can help
Unchain your supply chain with KPMG integrated AI planning. With our tested six-layer target operating model, we can help provide accurate analysis and segmentation, along with demand planning and a data assessment. We also engage algorithms that can enhance areas of operations. Our solutions are tailored to your needs, from improving inventory management and ensuring regulatory compliance to reducing costs across the board. Together, we can make the difference in modernizing your supply chain operations.
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