SCM Trend Radar 2024/2025

Supply chains are always on the move. Accordingly, the challenges and solutions along the supply chain are constantly evolving. In this blog post, we will therefore review the year and take a look at the trends and developments for supply chain planning in 2025. From AI-based forecasts to lean end-to-end processes - we discuss the game changers, potentials and stumbling blocks.

Looking back, the year 2024 began with a significant change in the inventory situation for many companies: whereas previously the focus was mainly on solving resource and material bottlenecks, market changes gradually shifted the focus to excess stock and the elimination of overcapacity.

From a process perspective, however, this did not actually change the fundamental question: How can I connect my sales with production or material control? And how can I plan my supply chain end-to-end?

Efficient sales & operations planning (S&OP) therefore continued to be the defining topic in our projects. The many new ideas for the use of artificial intelligence (AI) or concepts such as xP&A made it exciting.  

The top 3 topics for 2024

1. AI-based forecast: Forecast accuracy has proven to be a key factor in supply chain planning. AI has the potential to revolutionize these forecasts by not only evaluating historical data more efficiently, but also incorporating external influencing factors such as market analysis and price data.
2. Sales planning: The orchestration of sub-plans has become a key element in optimizing sales performance. The focus here was particularly on the optimum input variable for the supply plan - i.e. the requirements plan. This includes the statistical forecast, orders, new and discontinued models and marketing planning.
3. xP&A: Advanced planning and analysis (xP&A) makes it possible to link finance and the supply chain. This not only creates more efficient processes, but also makes it possible to better assess the financial impact of supply chain decisions - and vice versa.

With the general hype surrounding"ChatGPT", there was also a great deal of interest on the customer side in using these new possibilities to optimize planning. However, it quickly became clear that basic issues such as merging various existing sources of information had to be addressed before steps could be taken in this direction.

Another stumbling block for many projects was the increasingly tight budgets. This is a difficult situation, especially for larger projects such as the introduction of a tool-supported S&OP process. Leaner solutions, such as a K4 add-in for planning entries directly in Power BI, became an interesting alternative in order to be able to push ahead with the topic.

Trends will continue in 2025

The coming year promises to continue the trends of the previous year. This applies to the economic and (geo)political turbulence as well as the developments and effects on the supply chain that have already been outlined.

The consequences of inadequate and inflexible planning will continue to manifest themselves for many companies next year in the form of excess stock. This exacerbates the real problem: Companies have a lot in stock, but are still unable to deliver efficiently. One of the reasons for this is that the process is not set up consistently and sales and the supply chain, for example, access different data sources.

We therefore believe that integrated processes, AI solutions and specialized tools will continue to be the focus of those responsible for increasing the efficiency and accuracy of supply chain planning.

The top 3 topics for the coming year:

1. AI-based forecasts with external demand drivers: The integration of AI into sales forecasting will continue to gain in importance. Python-based solutions will reduce the cost of such forecasts, making them accessible to smaller companies too.
2. Establishing a lean end-to-end process: Companies strive to streamline their processes and establish seamless end-to-end planning in order to be able to react quickly to changes.
3. Automation of planning steps: Automation, in particular "alarm-based" planning, is increasingly being used to increase efficiency and reduce human error.

Conclusion

Supply chain planning is at a turning point. Advancing digitalization and the use of AI offer great opportunities for companies to adapt to the challenges of the market and increase their competitiveness. At the same time, a smart strategy and the willingness to adapt new technologies and methods are required to be successful in a constantly changing world.

Companies should therefore think about specific initial change measures. First of all, close and well-structured coordination between the sales and supply chain departments is essential. Regular, monthly coordination processes can minimize coordination problems and optimize collaboration. This ensures a consistent alignment of corporate goals and a rapid response to market changes.

In addition, we recommend the use of AI-based forecasts. This technology enables companies to use historical data more effectively and create forecasts with greater accuracy. This allows employees to focus on more strategic and value-adding tasks, while routine analyses are taken over by intelligent systems.

Finally, special attention should be paid to optimizing sales forecasts. Even minor improvements in forecasting accuracy can lead to significant savings. Reduced finished goods inventories and a reduction in shortages contribute directly to cost efficiency and customer satisfaction.

By taking these measures, companies position themselves for a successful year with optimized processes and increased competitiveness. Please contact us for an analysis of your specific company situation!