It’s been two centuries since the Industrial Revolution transformed manufacturing, introducing machines that automated production and unlocked unprecedented efficiencies. But in the last decade, the industrial manufacturing sector has encountered a new wave of challenges and disruptions.

From fluctuating demand and rising costs to material and labor shortages, geopolitical conflicts, and complex multi-tier supplier networks, manufacturers are navigating an increasingly volatile landscape. The shift toward nearshoring adds another layer of complexity. Tackling any one of these issues is challenging enough but managing them all at the same time feels almost insurmountable.

That’s because most manufacturers are relying on the static demand planning cycles, outdated forecasting methods and tools, and manual analysis that served them well in a less disrupted environment. These traditional methods and solutions simply weren’t built for today’s extreme volatility on both the demand and supply side. The long lead times and high capital investments that are often associated with industrial manufacturing are not a good match for a fast-changing business environment.

Lacking real-time visibility into supply conditions, planning teams do not see a disruption until it is already too late. And, without a real-time view of market dynamics, it is difficult for planners to profitably meet shifting customer needs.

As a result of their long planning cycles and delayed reaction time, manufacturers often invest in excess inventory as a buffer against demand changes. Often, they overproduce the wrong products, leading to static inventory, capital losses and waste. Industrial manufacturers may also underproduce the right sellable products, leading to lost sales and dissatisfied customers. And, because they cannot prioritize demand, manufacturers may not be able to fulfill profitable and strategically important customer orders.

Gearing up forecast accuracy and supply chain responsiveness

To revolutionize their demand planning results, industrial manufacturers need to embrace a more innovative approach — driven by real-time data, collaboration and advanced technologies including artificial intelligence (AI) and machine learning (ML).

Accurate, profitable demand planning for today’s industrial manufacturing depends on gathering real-time data from both upstream and downstream sources in the supply chain — as well as considering news, weather, economic indicators, inflation, geo-political developments, and other external forces that impact the supply chain.

Because of the sheer volume of data that’s involved, as well as the need to plan dynamically, manufacturers must replace manual analysis and forecasting methods with the speed, cognition and accuracy of AI and ML. Enabled by these advanced capabilities, along with leading-edge forecasting algorithms, modern decision engines can consider hundreds of variables and influences in mere minutes, then make recommendations for adjusting the forecast.

By sharing the forecast across functions, trading partners and suppliers, the entire industrial manufacturing supply chain can respond to changing conditions in a synchronized, orchestrated manner. Production needs can be streamlined so that the right products can be delivered at the right time, where demand is strategically prioritized based on its value to the company. In other words, demand planning execution can be linked directly to a fact-based forecast for significantly improved accuracy, driving stability and predictability for the business.

To ensure accurate results, planners need the ability to digitally simulate market conditions, then test the outcomes of their decisions. Again, modern technology can help, by proposing a set of optimal execution items, verified by market trends and enterprise data. Planners can leverage advanced technology to evaluate assumptions, clearly understand the impact of influencing factors, make accurate decisions and even shape demand.

Blue Yonder Cognitive Demand Planning nails today’s challenges

Blue Yonder has been diligently working with hundreds of industrial manufacturers, spanning decades, and has developed a deep understanding of their unique requirements, challenges, opportunities and risks. To support industrial manufacturers, we have developed the ideal solution to solve today’s need for dynamic, AI-enabled forecasting: Blue Yonder Cognitive Demand Planning.

This innovative solution provides capabilities that enable industrial manufacturers to maximize their financial and service results, even in an increasingly uncertain, disrupted environment. These critical capabilities include:

  • Real-time cause-and-effect analysis. What factors are shaping demand? And to what extent? Cognitive Demand Planning ingests hundreds of causal factors and demand influencing variables — including industrial market data, but also news, weather and economic indicators — to produce accurate forecasts. These forecasts are generated at a granular level, including different time horizons, regions, channels, and products. For the first time, planners can take a factual, objective look at the factors that are driving customer demand. As these factors shift, planners can accurately and confidently adjust the forecast, for an improved response to even subtle demand changes.
  • Intelligent scenario planning. Blue Yonder Cognitive Demand Planning not only makes decisions more accurate, but it also accelerates the entire decision-making process. Instead of manual planning, industrial manufacturers can rely on the speed and power of AI-fueled decision engines. By ingesting volumes of real-time cross-functional, cross-enterprise and external data, these engines can compress planning time from months, weeks or days to just minutes. By creating intelligent scenarios based on real-time visibility, planners can stabilize any variability between supply and demand.
  • Connected data. Most industrial manufacturers rely on disparate data sources and, as a result, they can’t make collaborative decisions — or simulate the end-to-end supply chain in a synchronized manner. Cognitive Demand Planning provides all stakeholders with the same data, visibility and awareness. Across the supply network, decisions are made based on a shared, single version of the truth that reflects the current reality.

Produce accurate and predictable demand plans — then, more accurate inventory

Industrial manufacturers have been facing tough challenges in recent years, from material and labor shortages to growing operations costs and complexity. Unfortunately, those challenges are not going away. But manufacturers can offset those obstacles by choosing a powerful, intelligent and dynamic demand planning solution purpose-built for today’s volatile supply chain landscape.

The first step in producing the right inventory is producing the right demand plan — one that’s driven by real-time data and AI. Find out why leading industrial manufacturers are already leveraging the speed and power of Blue Yonder Cognitive Demand Planning to forge better financial and service results.