Cosmo Tech

How Digital Twins Overcome the Challenges Faced by S&OP in 2021

How Digital Twins Overcome the Challenges Faced by S&OP in 2021

In this new three-part series, we explore the challenges faced by S&OP leaders and how Simulation Digital Twins provide them the insights and tools needed in today’s world of volatility, uncertainty, complexity, and ambiguity.

As we witnessed during the past year and now at the start of 2021, the pandemic continues to disrupt business processes. Even the most agile and robust planning processes often cannot provide the insights and decision-making capabilities needed to survive in today’s world of volatility, uncertainty, complexity, and ambiguity (VUCA).

During the early days of the pandemic, we watched as companies ripped up their once perfect and intricate plans as they struggled to align supply and demand, often putting aside their multimillion-dollar planning systems and resorting to Excel spreadsheets. And thus, unable to run proper sales and operations planning (S&OP) cycles, exposing their organizations to increased financial risk and market vulnerability.

“Supply chain simulation digital twins are necessary to get a real confidence index. And to make sure that you have evaluated the most probable combinations of risks, all quickly and efficiently enough not to get lost in analyzes nor postpone decision making,” said Romain Ropitault, Senior Product Manager at Cosmo Tech.

In this new era of increased risk and uncertainty, companies need to be agile to survive. The transformation of S&OP is vital in a VUCA world. C-suites and leadership teams need an S&OP process capable of identifying and taking into account resources critical to the business and that provide the insight needed to adapt quickly.

“One of the benefits of Cosmo Tech is that you can design and set up your model with different levels of detail to support the decision you want to take,” said Philippe Bornert, CEO of Agilea, consulting firm, expert in supply chain management.

Visibility of key business indicators and cascading effects to the entire organization

In our first article, we look at how in a traditional S&OP process, the aim is to bring together the various business plans present in an organization into one integrated set of tactical plans. The challenge is to ensure that the best decision is taken from the point of view of key global business objectives.

This global visibility is essential today as companies must find the right balance between multiple objectives and uncertainties. By implementing the modeling and simulation tools of digital twins, S&OP leaders can better understand and adapt their business plans to align with the overall business strategy.

End-to-end process management and controlled complexity

A challenge in traditional S&OP planning is controlling all supply chain steps while at the same time focusing on what’s critical for the business in a continually volatile environment. Often S&OP planning tools cannot identify and model critical resources at a granular level to guarantee the (S&OP) process viability. And thus, they do not provide the insight and foresight needed to ensure the S&OP plan can be executed when faced with changes to critical resources.

In our second article, we’ll look at how a simulation digital twin’s ability to identify and model key resources, at the right level of granularity, guarantees the reliability of the S&OP process. In addition, flexibility in modeling enhances the agility of the S&OP.

Fast risk assessment and decision making

Our final article looks at the challenge faced by S&OP teams in making the right decision when faced with today’s uncertain market environment. Changes in demand need to be assessed quickly as well as factors impacting the supply chain. The ability to assess in real-time changes and make on-the-spot decisions is vital.

Faced with these circumstances, today’s S&OP requires a way to simulate and test many scenarios to analyze the various options available and quickly find the best decision.

Leveraging advanced simulation techniques and AI-based decision making, Simulation Digital Twins provide the level of visibility and predictive insights not possible in conventional planning software.

Digital twin technology combines simulation and optimization capabilities enabling to run an unlimited number of what-if scenarios to highlight risks and opportunities. Thus, it provides stakeholders with the optimal decisions to minimize losses when plans and capacity misalign. And, help organizations mitigate risks instead of manage crises.

To learn more about how your S&OP organization can leverage Simulation Digital Twins, watch a replay of our webinar with Agilea Overcoming uncertainties with prescriptive S&OP. Philippe Bornert, CEO at Agilea, and Romain Ropitault, Senior Product Manager at Cosmo Tech, discuss how organizations can deploy a mature S&OP process to improve responsiveness and mitigate risks.