For instance, right after Japan's Fukushima nuclear power plant has experienced explosions due to the earthquake and the tsunami that followed, several enterprises within and outside Japan have publicly announced their course of actions to address the emergency.
Gartner plots prescriptive analysis as the final and most difficult stage of data analytics. This article will draw an analogy with the mapping and car industry to suggest that prescriptive analysis as an opportunity to support Integrated Business Planning IBP and business optimization, is not a final stage, but just at the beginning of a new planning era.
Integrated Business Planning as GPS Companies like River Logicmodel financial and operational business constraints and use prescriptive analysis to optimize a business objective. The business objective can be to maximize an asset, maximize throughput or minimize capital use and cost. Or all of the above at once.
In combination with Integrated Business Planning to provide visibility and manage change in model assumptions and constraints, this creates a powerful and holistic scenario and decision making capability for executives. It will tell you the best way to get where you want to be.
IBP done well will provide a company with a valid and reliable periodic rolling forecast and strategy status. The evolution of map technology If we take this analogy a little bit further, Integrated Business Planning and prescriptive analysis can learn from GPS and the evolution of the underlying map technology.
Only 15 years ago we still used paper maps in our car. Dynamic data input Map making and maintaining used to be an expensive exercise, where you needed to drive lots of cars around every street over and over again. TomTom made deals with tech giants like Apple and Uber to provide automated data input to their maps.
Millions of iPhone users and Uber drivers continuously send information to the TomTom database, which is used for mapping, traffic and route analysis to update a standard maps almost real time.
We can easily imagine a prescriptive analytics phase where the optimization model is automatically updated with macro assumptions and constraints like GDP, consumer spend, oil prices and total market capacity. Dynamic micro assumptions like capacity, downtime, material availability can come directly from intelligent machines.
This creates dynamic constraints in the optimization model. Alerts and interventions assistance Advanced Driver Assistant Systems ADAS are already capable to warn drivers for upcoming traffic jams and many middle class cars already operate with automatic break control in city traffic.
Some cars like the Mercedes E-class, can take this further and automatically take over the steering wheel when a driver loses control of the car.
With dynamic data input in the optimization model, prescriptive analysis can create alerts and intervene before a certain threshold of a critical resource or constraint is reached.
An asset can be almost at capacity or underused, cash can dry up, or throughput can reach unsustainable limits. It has 3D maps in Silicon Valley in support of US tech companies and is partnering with Bosch - a world leading German electronics provider to the car industry - to make rapid progress to 3D map other parts of the world.
Optimizing our own business with prescriptive analysis is like a 2D map. Now add to that the impact competitors, suppliers and customers have on your business within your industry. Now imagine the impact of other industries, countries, the weather and geopolitics.
In our connected, interdependent global world, similar to a 3D map, we will require multidimensional network prescription and optimizing. Prescriptive execution Cars like the Mercedes e-class and Tesla S model already can change lanes autonomous and park the car without the driver being in the car.
Audi will launch a HAD version of its flagship A8 in Elon Musk recently told analyst that Tesla is two years away from self-driving cars. Google has accumulated a millions kilometres of autonomous driving. McKinsey recently predicted that 15 percent of new cars sold incould be fully autonomous.
We already know based on research that humans better not touch a short term forecast as we are riddled with bias and emotions. We already let demand sensing take over short term forecasting and replenishment decisions. It is not hard to imagine prescriptive algorithms take over tactical and strategic decisions in a distant future.
This will create prescriptive execution.The future of IBP will be to plan across the whole value chain. A final step in IBP scope will be to understand and incorporate constraints to create a global view. Online shopping for Systems & Planning from a great selection at Kindle Store Store.
An enterprise planning system covers the methods of planning for the internal and external factors that affect an enterprise. These factors generally fall under PESTLE.
PESTLE refers to political, economic, social, technological, legal and environmental factors. Business Planning and Control System (BPCS) is a popular system of application programs for manufacturing and other industries that is developed and sold by Systems Software Associates (SSA).
SSA reports that BPCS is installed at over 8, business sites worldwide. Integrated Business Planning Solutions / Use Cases The top IBP processes clients are transforming with o9’s augmented intelligence platform The Future of Demand Planning Systems Move From Forecast Entry to AI-Powered Integrated Demand Management — Key for S&OP Success.
3 Business System Planning Business System Planning is a method for analyzing, defining and designing an information architecture of an organization.