Manhattan introduces Manhattan Active® Supply Chain Planning, a unified business planning platform that enables bi-directional collaboration between supply chain planning and execution systems. The solution allows planners to evaluate all operational factors in real-time and align all systems, inventory, and resources to a common business objective, such as reducing total landed cost or increasing speed to market.

Most planners in the supply chain focus on strategic issues. They spend a lot of time creating accurate forecasts. Based on these forecasts, they calculate stock levels, how much manufacturing needs to produce, and when suppliers should deliver. People within this domain are highly capable of aligning supply and demand in the log-term, but often less effective at responding to unexpected real-time events.

“On the other end of the spectrum is supply chain execution. In this domain, we are very good at processing all incoming orders, but we often forget to forecast and plan to quite the same level. In short, both domains are disconnected,” explains Bart de Muynck, an independent strategic advisor and former VP of Research at Gartner.

Bi-directional collaboration

Manhattan Active Supply Chain Planning was designed to put an end to this disconnect, facilitating bi-directional collaboration between supply chain planning and supply chain execution. This is now possible thanks to the underlying technology, explains Manhattan’s Brian Kinsella, Senior Vice President, Product Management.

“We began redeveloping our applications in 2014, based on a microservices architecture, or, if you prefer, a component-based architecture. The big advantage of this is that each component always has access to all the other components. If planning wants to know what is happening in operations, the API connecting the two components is called. This allows all these components to collaborate as if they were one large application. Previously, planning and execution applications were only integrated at a few points, with data being exchanged once or twice a day at most.”

The unification of Manhattan Active Supply Chain Planning with supply chain execution makes it possible to eliminate systematic and operational silos, unlocking enterprise-wide optimisation for the entire inventory assortment and all the resources required to move it through the supply chain. From inventory and labour to distribution and transportation, all elements are synchronised n realtime, seamlessly united under a single plan.

“Until now, unified business planning was unattainable, leaving vast potential untapped. The opportunity a platform approach presents is immense.”
Bart De Muynck, Supply Chain Consultant

Fewer kilometres

The unification of supply chain planning and execution is best illustrated through examples. The first example involves a manufacturer of consumer goods which organises the transport from suppliers to the factory. To achieve this, supply chain planning sends purchase orders to the transport department, which then combines orders to create full truckloads. This results in high truckload utilisation but not necessarily the fewest kilometres travelled. “While everyone knows that transport costs depend on the number of kilometres driven, the question is how we can reduce transport costs without affecting stock availability,” adds Kinsella.

Manhattan Active Supply Chain Planning makes a different approach possible. Instead of viewing purchase orders as fixed and absolute, the solution splits the order into goods the manufacturer needs immediately and those that can wait a few days.

“By initially focusing only on the goods needed right away, the transport department can create routes that cover suppliers located near each other. This reduces kilometres travelled but also lowers truckload utilisation. We can then ask the supply chain planning engine the best way to fill the remaining space with the other goods. In this way, we reduce kilometres while still meeting demand,” Kinsella continues.

Rising labour costs

The second example concerns workforce planning in warehousing and transport. As mentioned earlier, supply chain planning typically focuses on forecasting, but the results are not necessarily shared with the departments responsible for warehousing and transport. Often, these departments do not know exactly how much work is coming their way, which can result in too few operators and drivers being scheduled at one time and too many at another. Given the availability and high cost of labour are increasingly pressing issues in business, this is a topic of great concern.

Manhattan Active Supply Chain Planning not only provides the visibility needed in warehousing and transport, it also goes a step further too. Normally, supply chain planning arranges for new stock to arrive as late as possible to minimise inventory costs. However, this often leads to inefficiencies in transport and warehousing.

Kinsella continues, “for example, if you do not have enough people to unload a truck, it is parked in a yard, making that stock unavailable. You may incur detention or demurrage charges, and perhaps you’ll end up needing to pay extra for overtime or temporary workers. By allowing some stock to arrive earlier, the solution smooths out peaks in the workload. And while inventory costs may increase, the total costs will go down.”

“By allowing some stock to arrive earlier, the solution smooths out peaks in the workload.” 
Brian Kinsella, Senior Vice President, Product Management.

Biggest challenge

De Muynck stresses that technology alone is not enough to unite planning and execution. It requires people, processes, and technology working in harmony. “In the past, you could tell people to collaborate and align processes, but the systems were unable to work together. A unified platform for planning and execution changes that. The biggest challenge today, therefore, is the need to reorganise our businesses to introduce these new ways of thinking and working.”

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