The Supply Chain goes digital - and becomes agile

The company's ERP system covers the operational planning needs, but the system cannot ensure coordination between all levels of planning: the strategic, tactical, and operational planning. This means that manual processes using PowerPoint and Excel create bottlenecks everywhere: the internal coordination suffers, there is great uncertainty about the data validity and the efficiency of the task solution is low - with both errors and low productivity as a result.

At the same time, the company wants to optimize the operation to a degree that the manual and semi-automated solutions cannot accommodate. The optimization requires a much higher degree of transparency and oversight, combined with better IT support of the many processes. The end goal is to be able to plan and save costs through a new advanced integrated system that covers all planning levels, provides high transparency, and allows for better predictability through modelling of multiple scenarios in operation.

Therefore, the company has chosen to implement an advanced planning system. The system is based on a so-called 'digital twin' of the physical supply chain. Briefly explained, a digital twin is a digital copy of a physical object, system, or organism; and the twin offers the opportunity to try out different scenarios, processes, and solutions, prior to implementation in the real world. The digital twin is based on a mapping of the most important parameters in the company's value chain and ensures that all elements are considered when the company changes processes, systems, or dependencies.

Of course, the development of the digital twin requires a complete overview of the current supply chain. It is also crucial that the company has made it clear what decisions the system needs to support, and thus which data is needed, and not least which processes are be supported and adjusted if need be.

After the mapping of system requirements and analysis and identification of the value chain, kaastrup|andersen delivered a business case, which among other things describes the expected savings of 5-7% of the variable costs, enabling agile decision making and increased transparency in the plans. The business case thus created the decision basis for the further investment. It became clear that the investment will pay itself back by a factor of 7 within two years. In addition to a sound decision basis, the business case also sharpened the company’s focus on ensuring data quality and provided the opportunity for a thorough review of the current processes, paving the way for the new future planning processes.

The company now has the foundation to implement the digital twin and start realizing the many benefits that the overview and transparency will bring.

kaastrup|andersen was responsible for the program management of the project.