As part of ARC Advisory Group’s Supply Chain Forum last month, I had the opportunity to speak with Kathleen Geraghty, Vice President of North American Sales at ToolsGroup. During our conversation, we touched on a number of topics around the supply chain planning market. You can watch also the full interview below.
Specifically, I asked Kathleen to give me her insights on why the supply chain planning market has continued to grow during the ongoing pandemic while many other software markets have shrunk. I asked what other major market trends she is seeing right now. And finally, I asked her about the role artificial intelligence and machine learning play, and what should customers understand before selecting a supplier. Below are some key points from our discussion.
Supply Chain Planning Market
The Covid pandemic hit supply chain markets quickly and shined a very bright light where there were vulnerabilities. Those companies that couldn’t react to disruptions were hit the hardest. In North America, that initial impact started with the offshore suppliers closing and they were unable to fulfill orders. Then there was a global logistics bottlenecks. At the same time companies were dealing with supply volatility that was impacting demand uncertainty. Covid has underlined the need to be resilient. There is now a keen awareness that disruptions can happen suddenly, and software can bring agility and resilience while providing visibility.
Major Market Trends
There are a number of other trends in the supply chain planning space. ToolsGroup recently released its annual predictions for the year ahead. The first one is around the trend of digital transformation to accelerate agility. Business models that eventually would have changed have accelerated, such as direct to consumer. This convergence is fueling multiple initiatives.
Planning capabilities continue to grow in adoption to build more resilience by expanding multi-echelon distribution networks. This is also centralizing planning and increasing simulation capabilities. This all introduces more complexity but can bring great value.
There is a focus on alternate sourcing and substitution options. Companies are looking to shorten and localize supply chains, which creates a tradeoff in higher manufacturing costs balanced against reducing inventory and lowering logistics cost.
Finally, there is a movement toward best of breed solutions at the forefront. Namely, companies are abandoning the fact that everything has to come from one solution or supplier. It is now about building more integrated sets of solutions.
Machine learning and artificial intelligence continue to be a hot topic. Companies need to understand what machine learning and artificial intelligence are. In the end, companies cannot let a supplier shape their view of what it is and how they can use it.
ToolsGroup is a global supply chain planning software company. ToolsGroup helps companies maintain or improve target service levels while minimizing inventory. It calculates the probability of demand to optimize inventory and delivers service levels companies can commit to customers. It comes down to having the right product at right time and right place while consuming least amount of working capital.