{"id":10637,"date":"2021-06-02T17:18:29","date_gmt":"2021-06-03T00:18:29","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=10637"},"modified":"2023-01-27T11:48:30","modified_gmt":"2023-01-27T19:48:30","slug":"add-dynamic-scenario-planning-to-your-supply-chain-part-1","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2021\/06\/add-dynamic-scenario-planning-to-your-supply-chain-part-1","title":{"rendered":"Add Dynamic Scenario Planning to your supply chain – Part 1"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10638″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\r\n\r\n

This article is the first part of a two-parts article series dedicated to Scenario Planning.<\/p>\r\n\r\n\r\n\r\n

There are events we take for granted when we go about our personal life.\u00a0 We expect that the car will start each morning.\u00a0 We expect that our credit card will work at the store.\u00a0 We expect that we will not become ill.<\/p>\r\n\r\n\r\n\r\n

Experience shows us, however, that some everyday situations may bring about unforeseen outcomes.\u00a0 We acknowledge this by employing mitigation strategies like insurance, spare keys, and calling on friends.\u00a0 But what happens when the magnitude, frequency, and volume of unforeseen outcomes overwhelms even the most well-calculated mitigation efforts?\u00a0 We are forced to think quickly on our feet; in other words, we are forced to be agile.<\/p>\r\n\r\n\r\n\r\n

Likewise, a manufacturing supply chain design is based on a series of assumptions that underpin an underlying model to synchronize supply and demand within the confines of a myriad of constraints and costs.\u00a0 The majority of these assumptions, in normal times, are, like expecting the car to start, beyond reproach.\u00a0 These include material available and capacity.<\/p>\r\n\r\n\r\n\r\n

What happens when even the most confident assumptions become a potential area of risk?\u00a0 Is a new supply chain model required?\u00a0 Is a more flexible model required?\u00a0 How do planners navigate unprecedented disruption?\u00a0 This is where dynamic scenario planning comes to play.<\/p>\r\n\r\n\r\n\r\n

Dynamic Scenario Planning<\/h2>\r\n\r\n\r\n\r\n

Scenario management has been evolving for some years.\u00a0 Historically it was relegated to long term strategic planning to model alternate business landscapes.\u00a0 It is equally applied in best practice Sales & Operations Planning (S&OP) <\/a>to present alternative tactical plans for an executive signoff.<\/p>\r\n\r\n\r\n\r\n

In 2021, scenario planning has become more dynamic and earned a place in day-to-day supply chain decision making.\u00a0 It\u2019s inclusion has been driven by disruption and digitization.\u00a0 Unprecedented and continuous disruption has forced typical tactical decisions like sourcing and capacity into the operational planning horizon.\u00a0 At the same time, the digitization of everything means planners can access copious volumes of often real-time demand and supply signals. Only some of these signals have the potential to influence current plans.<\/p>\r\n\r\n\r\n\r\n

Dynamic scenario planning is a form of scenario planning which is pervasive in everyday planning both operational and tactical.\u00a0 Dynamic scenario planning is used to chart a business response to a potential disruption or unexpected outcome that triggers an investigation.\u00a0 A dynamic scenario may last one hour, one day or an entire planning cycle.<\/p>\r\n\r\n\r\n\r\n

Where do supply chain scenarios come from?<\/h2>\r\n\r\n\r\n\r\n

Supply Chain scenarios originate from several sources, which can be categorized into three types; pre-defined, speculative, or unforeseen.<\/p>\r\n\r\n\r\n\r\n

Predefined scenarios<\/strong><\/h3>\r\n\r\n\r\n\r\n

Predefined scenarios<\/strong> are usually recurring scenarios that exist in each planning cycle and have labels such as \u201cUpside,\u201d or \u201cConservative\u201d. These scenarios may be as simple as a consumer product manufacturer who simultaneously plans with and without promotional activity.\u00a0 The types of scenarios used within S&OP scenarios are usually predefined to offer executives a choice of tactics to deploy.<\/p>\r\n\r\n\r\n\r\n

Speculative scenarios<\/strong><\/h3>\r\n\r\n\r\n\r\n

Speculative scenarios <\/strong>are events that have not yet occurred or that may never occur. An example would be the possible bankruptcy of a key supplier that is known to be in financial trouble.\u00a0 Scenario planning for speculative events generally focuses on contingency rather than mitigation.\u00a0 In the case of a possible bankrupt supplier, this would focus on increasing raw material inventories and fast-tracking alternative sourcing.\u00a0 An advantage to speculative scenarios is that often there is time available to collect the data, simulate the impact, and properly prepare.\u00a0 The disadvantage is that the likelihood of the occurrence is unknown.<\/p>\r\n\r\n\r\n\r\n

Unforeseen scenarios<\/strong><\/h3>\r\n\r\n\r\n\r\n

Unforeseen scenarios <\/strong>are events that, as the name suggests, are not planned, but have recently occurred or have a known and imminent date.\u00a0 Examples include natural disasters or unexpected changes to tax or trade legislation.\u00a0 In early 2020, the COVID19 pandemic would have been classified as an unforeseen scenario.\u00a0 Such scenarios are the most difficult to manage due to the lack of lead time, poor access to reliable data, and the changing nature of the event.<\/p>\r\n\r\n\r\n\r\n

Unforeseen scenarios are not the same as operational exceptions like a late supplier shipment.\u00a0 A late supplier shipment has a known and precise impact on the plan.\u00a0 There is no value to reproduce the \u201cwhat if it was on-time?\u201d scenario.\u00a0 Unforeseen scenarios, on the other hand, have an unspecified impact on the plan and require intelligence gathering and modeling to simulate the appropriate response or responses.<\/p>\r\n\r\n\r\n\r\n

An important component of planning for unforeseen scenarios is early identification, which allows planners to maximize the available bandwidth needed to formulate an accurate and timely response.<\/p>\r\n\r\n\r\n\r\n

Our next blog will focus on the lifecycle of a scenario, stay tuned![\/vc_column_text][\/vc_column][\/vc_row]<\/p>","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10638″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text] This article is the first part of a two-parts article series dedicated to Scenario Planning. There are events we take for granted when we go about our personal life.\u00a0 We expect that the car will start each morning.\u00a0 We expect that our credit card will work at the store.\u00a0 We expect that […]<\/p>\n","protected":false},"author":143,"featured_media":10638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2045],"tags":[2475,176,2476,2477,544,788,2478,488,129,2479,175,696],"class_list":["post-10637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-supply-chain-trends","tag-business-process","tag-demand-planning","tag-digital-supply-chain-planning","tag-forecast","tag-forecasting","tag-ibp","tag-inventory-buffers","tag-material-requirements-planning","tag-mrp","tag-replenishment","tag-sop","tag-scenario-planning"],"yoast_head":"\nAdd Dynamic Scenario Planning to your supply chain - Part 1 - QAD Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qad.com\/blog\/2021\/06\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Add Dynamic Scenario Planning to your supply chain - Part 1 - QAD Blog\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_single_image image=”10638″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text] This article is the first part of a two-parts article series dedicated to Scenario Planning. There are events we take for granted when we go about our personal life.\u00a0 We expect that the car will start each morning.\u00a0 We expect that our credit card will work at the store.\u00a0 We expect that […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.qad.com\/blog\/2021\/06\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\" \/>\n<meta property=\"og:site_name\" content=\"QAD Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/QADerp\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-03T00:18:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-27T19:48:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.qad.com\/blog\/wp-content\/uploads\/2023\/01\/Add-Dynamic-Scenario-Planning-to-your-supply-chain-696x3921-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"696\" \/>\n\t<meta property=\"og:image:height\" content=\"392\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Arnaud Hedoux\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@QAD_Community\" \/>\n<meta name=\"twitter:site\" content=\"@QAD_Community\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Arnaud Hedoux\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\"},\"author\":{\"name\":\"Arnaud Hedoux\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/#\\\/schema\\\/person\\\/ccdf171c1d4bf7ceefb179129d901156\"},\"headline\":\"Add Dynamic Scenario Planning to your supply chain – Part 1\",\"datePublished\":\"2021-06-03T00:18:29+00:00\",\"dateModified\":\"2023-01-27T19:48:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\"},\"wordCount\":810,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/wp-content\\\/uploads\\\/2023\\\/01\\\/Add-Dynamic-Scenario-Planning-to-your-supply-chain-696x3921-1.png\",\"keywords\":[\"Business Process\",\"demand planning\",\"Digital Supply Chain Planning\",\"Forecast\",\"forecasting\",\"IBP\",\"Inventory Buffers\",\"material requirements planning\",\"mrp\",\"Replenishment\",\"s&op\",\"scenario planning\"],\"articleSection\":[\"Supply Chain\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\",\"url\":\"https:\\\/\\\/www.qad.com\\\/blog\\\/2021\\\/06\\\/add-dynamic-scenario-planning-to-your-supply-chain-part-1\",\"name\":\"Add Dynamic Scenario Planning to your supply chain - 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