Effective Supply Chain Planning Will Forever Be About Building Efficiencies

Five Questions With Unioncrate Founder & CEO, Shastri Mahadeo

Today, Unioncrate releases Augmented Forecast—a first-of-its-kind collaborative capability that unites artificial intelligence with human intelligence for real-time adjustments, greater forecast accuracy, and more efficient supply chain planning. We sat down with our Founder & CEO, Shastri Mahadeo, to discuss his takeaways from 2020 and the keys to realizing supply chain efficiencies through agile demand planning.‍

Jonathan Zalman: How do brands move forward after such a bumpy year?

Shastri Mahadeo: I think it begins by gaining some perspective, and here’s mine. The problems that existed in 2020—informational and operational silos, inaccurate forecasts, slow manual processes—existed in 2019 just as they did in 2018 and so on.

These issues just became more prevalent last year in part because remote work became the norm for a lot of people. Demand planners couldn’t (literally) knock on the doors of their sales teams and ask about distribution losses or ask supply teams why they might not be able to fully fulfill an order because of supply constraints.

Another reason is the incredible growth in ecommerce and DTC. Many brands didn’t have the warehousing or logistical coverage, so they ended up paying out the nose to shuttle products across the U.S. to fulfill 1- or 2-day shipping requirements. This significantly increased working capital costs. It was a huge hit for them.

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Jonathan: Silos, poor accuracy, and a lack of automation—these all breed inefficiencies and hinder a brand’s ability to stay competitive. What’s the solution?

Shastri: Modern CPG brands need to think about supply chain management and supply chain planning as a holistic and active approach, not a siloed or static one. There’s no “going back to normal”—there’s only change. Sometimes it’s rapid, sometimes it’s not. But it’s always present. This means that confident decision-making can only come from a brand’s ability to be agile in the face of change. This comes from having the right technology in place. It’s never too early to start implementing a tool that gives you that kind of flexibility.

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[Related reading: My Unconventional Path to Building the Future of Supply Chain]

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Jonathan: Tell me more about “the right technology.” What should brands realistically be prioritizing?

Shastri: It goes back to approaching planning holistically. You’ve got to be able to put it all together. So many of the brands I speak with, some of them huge conglomerates, are operating with big communication gaps and these silos are costing them. Sales teams are working on their own plans in their own system. Supply teams, too. Same with finance. And it’s not that communication isn’t happening at all, it’s that it often happens at the wrong time—after plans are already into motion. And then everyone looks at actuals and tries to figure out what went wrong.

Brands need technology that enables them to bring the business together. Software that unites all areas of the business—plus the people who operate them—into one place. When it comes to daily operations, this could be a flexible ERP that incorporates finance, inventory, orders, etc. In terms of supply chain planning, they need a platform that can bring all the ERP data together, and combine it with demand data and human intelligence. That's a true IBP platform.
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Jonathan: Lift the hood on AI for us—describe in your own words what it means, and how it brings about unity and efficiencies.

Shastri: Simply put, AI is a large set of complex algorithms—formulas—that compute data much, much faster than a human could. Depending on the models (basically the algorithms) you use, it can learn and adjust on its own. When brands automate their demand planning with us, it means that we do the heavy lifting for them. We give them back countless hours that would have otherwise been spent planning—time spent aligning in meetings, doing manual calculations, emailing and calling and knocking on doors to find difficult-to-find data. It shouldn’t be that difficult.

Again, it’s about breaking down silos and using one platform that provides complete visibility across departments, which will create unity within organizations. We bring together supply chain, financial, and operational data into one place and eliminate blind spots from our clients’ forecasts.

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[Related reading: Why the Most Effective AI-Generated Forecasts Should Be Augmented by Human Insight]

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Automation and AI are what builds efficiencies. Many organizations are still in “Excel hell.” But in order to be efficient and save on time and money, you need to put AI to use. The AI does things humans can't possibly do in the time it does it. The key to keeping up with the consumer means—and getting ahead of demand—is automation.

I’m talking not just automating sales and inventory forecasts but also the process of onboarding a system that enables automation. We onboard new clients in as little as 2-3 months without any disruptions to the business. You won’t find that anywhere else.

We also automate much of the analytics they need looking back and looking forward. We automate key learnings, including a forecast performance page that shows why forecasting errors occurred and what likely caused it, such as a supply constraint or an overachieving promotion. We also provide our clients an understanding of what we predict will drive future sales. All of this information is automated and a few clicks away. That’s efficiency.
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Jonathan: So is the future all about the machines, so to speak? What do you say to people who would prefer to rely solely on human intelligence for their forecasting needs?

Shastri: I think it’s shortsighted to think that AI can do it all because no matter how good your AI forecasts are, in many instances, human intelligence is complementary to the effectiveness of it. AI can’t know everything—it can only compute what it’s fed. It can’t listen into your calls with the Walmart buyer or your manufacturer (not yet at least...). That’s where human insight comes into play.

Sales teams, for example, will always possess data that only they know, like new distribution gains or a last-minute approval on shipper displays. Brands that use our AI also have access to a functionality that allows these inputs to be entered and automatically be factored into forecasts or treated as a one-time occurrence. So when new information is entered into our system, it’s available to all allowed parties and promotes alignment. As a result, teams can plan accordingly. And after a year like the one we’ve had, that sort of technological flexibility is a powerful thing to have. The future of supply chain planning should include the unity of AI with HI as part of a larger integrated system that drives efficiencies across the business, keeping brands competitive. We're a solution that allows companies to be more efficient around supply chain planning and, dollar for dollar, be more efficient than building a demand planning department.

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About Unioncrate

Unioncrate is an AI-powered Integrated Business Planning (IBP) platform that delivers demand forecasts with unmatched accuracy, collaborative visibility, and actionable intelligence—enabling CPG brands to plan and execute agile supply chain strategies at the click of a button.