The Hidden Threats of Spreadsheet-Based Supply Chain Planning

October 12, 2023

Over the last few decades, the global supply chains have evolved in extraordinary ways, forcing rapid change in just about every sector. And yet, many companies today are still applying outdated methods to their supply chain planning. According to a 2020 survey conducted by Modern Materials Handling, a staggering 45% of supply chain professionals reported are using mostly or entirely manual processes. At a time when supply chains all over the world were being rocked by the pandemic, it’s hard not to dwell on how digital and automated processes would have helped companies to sense and respond better to swings in market demands, or issues of raw material and product scarcity, shipping delays, and labor shortages.

Having come out on the other side — with lessons freshly learned — 64% of companies say they plan to accelerate their digital transformation as a result. For those still dependent on manual processes, we want to stress the sense of urgency to evolve with the needs of today’s volatile marketplace and the threats hidden within traditional supply chain management systems.

5 Risks Introduced by Manual Supply Chain Planning

Discover some of the biggest threats to supply chain management, posed by manual methods like spreadsheet-based planning.

You’re opening yourself up to errors

Spreadsheets are managed by humans and humans make errors — a lot of them. In fact, according to the Corporate Finance Institute, errors in spreadsheets happen at an estimated rate of 88%. The errors resulting from manual management can create gaps, leave you vulnerable to risks, and limit your scalability.

You spend more time on the tactical aspects of planning than the strategic

When spreadsheets are used as the primary tools for planning, most of a planner’s time is spent on “keeping the numbers right” – i.e., making sure that the numbers add up and they are current leaving very little time for the planner to evaluate scenarios and alternatives. This results in only attending to fewer product categories than you would otherwise like to.

You are not able to collaborate cross-functionally to generate consensus plans

Circulating spreadsheets around to get inputs from functions like sales, marketing or a channel partner is both time consuming and error prone. Being able to design collaborative workflows and allow multiple parties to provide inputs easily is a “must have” in today’s dynamic supply chain environments.

You are not leveraging valuable data that is available to you

Spreadsheet based planning does not allow you to integrate data that is available from external; sources (channels and third-party data providers) as well as internal sources (ERP, CRM etc.) in a timely manner to support better demand and supply planning. For example, today highly valuable channel level sales and inventory data can be acquired from channels like Amazon, Walmart, and Kroger — use of this data in demand, inventory and supply planning can help enterprises of all sizes to offer higher service levels even while carrying lower inventory.

Your (slow) reaction time might be damaging customer experience

In today’s competitive environment, where any product category can have more than a handful of brands, being out of stock even for a few days could result in loss of market share. Ability to react quickly to demand and supply changes will require more frequent planning runs with the most current data.

The better option? Make the smart shift to AI-powered solutions

Despite their superpowers to predict the ebb and flow of a supply chain, professionals will always be dealing in a world where predictions can be upended at any moment. The best way to contend with the uncertainty is to fortify your supply chain with solutions that can protect you from vulnerability, help you achieve greater precision, and accelerate your growth.

According to a report from Ernst & Young, “the pandemic forced supply chains to develop new agility to carry forward — for example, many organizations are building advanced analytics to do dynamic SKU rationalization rather than doing one-off spreadsheet exercises.”

Setting the stage for process changes like these are AI and automation solutions that deliver enhanced visibility and optimized efficiencies end-to-end. Firstshift.ai is leading the way with an AI-powered, cloud-based demand planning software and supply chain planning platform. Firstshift.ai offers companies the power to more accurately forecast customer needs, sense and respond to market signals faster, and achieve a consensus demand plan with simplified cross-organization collaboration.

Ditch the spreadsheets and make the smart shift — schedule a demo to learn more.

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News

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December 2, 2024

Firstshift Achieves SOC 2 Type I Compliance, Reinforcing Commitment to Data Security and Customer Trust

Los Altos, California – December 2, 2024 – Firstshift, a leading provider of AI-powered supply chain planning software, today announced that it has achieved SOC 2 Type I compliance. This certification, conducted in accordance with the American Institute of Certified Public Accountants (AICPA) standards for SOC for Service Organizations (SSAE 18), affirms Firstshift’s dedication to maintaining the highest level of security, confidentiality, and privacy for its customers' data.

"Maintaining the trust of our customers is a top priority," said Hari Menon, Co-founder and CEO of Firstshift. "This milestone underscores our unwavering commitment to data security and reflects our dedication to delivering enterprise-level compliance and peace of mind to our customers."

Firstshift’s cloud-native software platform is leading supply chain innovation, leveraging AI technologies, including machine learning and generative AI, to transform supply chain planning and operations. The company, founded by seasoned supply chain entrepreneurs, is driven by the vision of using AI to create smarter, more efficient supply chains for enterprises globally.

The SOC 2 Type I audit was conducted by Prescient Assurance, a recognized leader in security and compliance attestation for B2B SaaS companies. Prescient Assurance specializes in risk management and assurance services, offering expertise across frameworks such as SOC 2, PCI, ISO, NIST, GDPR, CCPA, HIPAA, and CSA STAR.

Firstshift’s compliance efforts were supported by Akitra’s Andromeda Compliance automation platform, which streamlines compliance processes with AI-powered, cloud-based automation and robust cybersecurity capabilities. This integrated approach ensures a secure and reliable framework for safeguarding customer data and applications.

Achieving SOC 2 Type I compliance with an unqualified opinion demonstrates Firstshift’s robust internal controls and its commitment to meeting the highest industry standards. Current and prospective customers can trust that their data is managed with unparalleled security and care.

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Firstshift provides innovative AI-powered supply chain planning solutions, trusted by top brands in CPG, Food & Beverage, Industrial Products, and Apparel & Fashion. Our platform automates planning, delivers actionable insights, and empowers medium and large enterprises to grow without compromising quality and reducing unnecessary risks. Experience faster decision-making, optimized operations, and the freedom to focus on growth. From today’s first shift to tomorrow’s endless possibilities, make the smart shift with Firstshift supply chain planning solutions.

Insights

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November 19, 2024

AI's Role in Enhancing Supply Chain Performance

In today’s highly digital, data-rich world, supply chain professionals are turning to AI-powered solutions to enhance supply chain performance at every level. The evolution of AI in supply chain management extends far beyond basic automation; it’s about unlocking the potential of predictive analytics, real-time data processing, machine learning, and automated decision-making. These technologies enable companies to optimize operations, enhance resilience, and better meet customer demands — all while reducing costs and managing risks.

Explore how advanced AI solutions redefine supply chain management, focusing on demand forecasting, inventory and order optimization, automation, and risk mitigation. By leveraging these capabilities, businesses can strengthen operational efficiency and responsiveness, key differentiators in industries with tight margins and high variability, such as the food and beverage industry.

AI’s Impact on Forecasting Accuracy

AI-powered demand forecasting tools have transformed demand planning by moving from static, historical models to dynamic, real-time insights. Through the application of machine learning algorithms and neural networks, AI can process massive datasets, including historical sales, economic trends, and real-time inputs like weather data and consumer sentiment.

These AI-powered tools produce highly accurate, actionable forecasts, which are essential for industries like F&B where fluctuating consumer preferences, seasonal demands, and limited product shelf life play a critical role in operations. For example, demand for certain products might surge or dip based on seasonal trends, local events, or emerging consumer preferences. AI/ML algorithms that leverage the latest demand picture enable companies to adjust forecasts quickly, align production schedules, and reduce overstock or stockout risks, resulting in a more efficient, responsive supply chain.

Optimization of Inventory and Order Management

In supply chain management, AI extends far beyond forecasting by optimizing inventory and order management with machine learning models. AI-powered systems use sophisticated algorithms to evaluate a combination of factors and dynamically adjust reorder points and safety stock levels. This leads to reduced inventory as well as reduced transportation and warehousing costs.

Inventory optimization also benefits from AI’s capability to handle multi-echelon networks, where inventory is managed across multiple facilities or locations. For F&B companies with dispersed distribution centers or retail locations, AI can automate reallocation, ensuring that high-demand locations remain stocked while avoiding overstock in low-demand regions. This optimization translates into reduced holding costs and more efficient use of inventory across the entire network, ultimately meeting customer demands more effectively.

On the order management side, AI’s automated prioritization and allocation capabilities allow for rapid fulfillment, reducing lag times and improving customer satisfaction. By anticipating shifts in demand and automating responses, companies can enhance supply chain agility, positioning them to outperform competitors in service levels.

Enhancing Operational Efficiency Through Automation

AI can significantly elevate operational efficiency by automating repetitive tasks like order processing, demand planning, inventory auditing, and scheduling. By integrating AI with ERP systems and MRP systems, companies achieve a seamless flow of information and process automation, from procurement to production to fulfillment.

Automated order processing with robotic process automation, for example, speeds up time-to-fulfillment, reduces errors, and frees up staff for higher-level tasks. For F&B companies, where timely delivery is crucial due to perishability, this streamlined process can mean fresher products on shelves and happier customers.

AI-powered automation further enhances supply chain performance by enabling prescriptive insights. For instance, an AI system might identify low-demand periods and recommend reduced production or reallocation of resources, helping companies avoid excess inventory and reduce costs. Advanced scheduling algorithms can also dynamically adjust manufacturing and logistics schedules based on real-time inputs, ensuring that operations run smoothly and efficiently, even during peak seasons or times of high volatility.

Managing Risks with Predictive and Prescriptive Insights

Supply chain professionals have long struggled with managing risks posed by uncertainties in demand, supply delays, and unexpected events. AI enables more proactive risk management by leveraging predictive and prescriptive analytics. Predictive analytics uses historical and real-time data to anticipate potential disruptions, while prescriptive analytics provides actionable recommendations to mitigate risks.

For example, an AI system might detect early indicators of supplier delays through pattern recognition and anomaly detection, allowing a company to take corrective actions before the disruption affects production. This is particularly beneficial in the F&B industry, where delays can lead to spoilage and waste. Prescriptive analytics further empowers companies by offering specific recommendations, such as alternate suppliers, optimized routing, or adjusted production levels to maintain consistent supply.

In addition to traditional risk factors, AI helps companies prepare for unexpected, systemic challenges such as natural disasters, market shifts, or regulatory changes. Powered by AI, scenario planning allows companies to simulate various scenarios and model responses, building a more resilient supply chain. By using AI to preemptively mitigate risks, companies can maintain service levels and minimize losses even under challenging conditions.

Building a Resilient, Adaptive Supply Chain with Advanced AI

AI has become an indispensable tool for modern supply chain professionals, enhancing performance through predictive and prescriptive analytics, intelligent automation, and real-time insights. The implementation of AI in demand forecasting, inventory and order management, process automation, and risk management not only delivers operational efficiency but also builds resilience and adaptability.

For F&B companies and other high-stakes industries, adopting AI-driven supply chain solutions is no longer optional — it’s a strategic imperative for meeting customer expectations, controlling costs, and maintaining competitive advantage. As AI technology advances, the supply chain’s role in driving profitability and growth will only increase.

Contact us to schedule a demo and see how our AI-powered solutions can elevate your supply chain’s performance and adaptability.

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Insights

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October 22, 2024

Driving Efficient Supply Planning with AI-Powered Demand Planning and Forecasting

Anticipating demand and ensuring optimal supply presents a complex and evolving challenge for companies. The key to maintaining competitiveness in today’s fast-paced market is achieving high levels of responsiveness and agility in supply chain operations. Enter AI-powered demand planning and forecasting solutions—tools that are redefining how organizations approach not just planning but the entire supply chain landscape.

Demand Planning and Forecasting Beyond Historical Data

Traditional demand planning and forecasting rely heavily on historical sales data, trends, and human judgment. While effective to an extent, these methods struggle with sudden shifts in market dynamics, such as unexpected demand surges, supply disruptions, or changes in consumer behavior. The limitations become even more apparent when companies try to scale their operations or enter new markets.

AI-powered demand planning and forecasting transcend these limitations by incorporating machine learning (ML) algorithms and advanced analytics that process diverse datasets in real time. This includes everything from point-of-sale data, weather patterns, and economic indicators to social media sentiment and even competitor activity. By integrating these variables, AI enables companies to generate more nuanced and accurate demand forecasts, allowing for agile responses to changes in the market.

Consider, for example, how AI can automatically adjust forecasts when a new competitor enters the market or a viral social media trend suddenly boosts demand for a particular product. Traditional models may take weeks to adjust, whereas AI can do so almost instantaneously, thereby reducing the lag between perception and action in demand forecasting and planning.

Enhancing Supply Planning with Advanced Demand Forecasting

Accurate demand forecasts are a critical input for effective supply planning, but they are just the starting point. The true value of AI emerges when demand forecasts are integrated into broader supply chain planning and execution processes. By using predictive analytics, AI can provide real-time recommendations for inventory management, procurement, and production planning.

AI systems can simulate various supply scenarios—such as disruptions in raw material supply or spikes in transportation costs—and suggest the best course of action. For instance, if a machine learning model detects an impending shortage of a key raw material based on supplier risk data, it can proactively recommend adjusting the production schedule or seeking alternative suppliers. This level of insight and adaptability is crucial for maintaining a resilient supply chain, particularly in the CPG industry, where volatility can significantly impact profitability and brand reputation.

Leveraging AI for Advanced Demand Planning and Scenario Planning

One of the more advanced applications of AI in supply chain management is its integration into Sales and Operations Planning (S&OP) processes. AI-driven S&OP aligns demand planning, supply planning, and financial planning on a single, coherent platform. This allows cross-functional teams to collaborate more effectively, breaking down silos that traditionally hinder optimal decision-making.

For example, AI can facilitate scenario planning by simulating the financial impact of different demand and supply scenarios. It can assess how a 10% increase in demand would affect cash flow, resource allocation, and workforce requirements, enabling companies to make informed, strategic decisions that align with broader business goals.

Moreover, AI can continuously learn from each iteration of the S&OP process, refining its models and improving forecast accuracy over time. This iterative learning capability is what sets AI apart from traditional demand planning tools, making it a key enabler of digital transformation in supply chain management.

The Impact of AI on Demand Planning and Forecasting

The integration of AI into demand planning and supply planning is not a one-time implementation but a journey towards continuous improvement. As AI systems gather more data, they become increasingly accurate and capable of delivering actionable insights that were previously unattainable.

Machine learning algorithms, for instance, can identify and correct biases in historical data that might skew demand forecasts. They can also detect patterns in consumer behavior that human analysts might overlook, such as the impact of specific promotions or seasonal trends on long-term demand. This level of granularity allows for highly personalized and efficient supply chain strategies that are aligned with business objectives.

AI-Powered Demand Planning and Forecasting

The future of demand planning and supply chain management is decidedly AI-driven. Companies that invest in AI capabilities today will be better positioned to adapt to the complexities of tomorrow's marketplace. AI’s ability to process and analyze vast amounts of data in real-time provides a level of agility and precision that manual methods simply cannot match.

Moreover, as AI technologies like deep learning and reinforcement learning continue to evolve, their applications in demand planning and forecasting will only expand. Combining advanced AI algorithms with “human in the middle” workflows, early early adopters of these technologies will have a significant head start.

Transforming Supply Planning through Advanced Demand Planning and Forecasting

In a world where agility and accuracy are paramount, AI-powered demand planning and supply chain optimization are no longer optional—they are essential. Companies that harness the full potential of these technologies will transform their supply chains from cost centers into strategic assets that drive growth and profitability.

By deepening your understanding and integration of AI in demand planning and forecasting, you position your company not just to keep up with the competition but to lead the industry into a more connected, efficient, and responsive future.

Ready to transform your supply planning through advanced demand planning and forecasting with AI? Schedule a demonstration today to see how our solution can drive efficiency and growth for your business.

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