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Celonis Product Documentation

Reference Guide

This section describes the execution application module, the problem, the solution, and the value proposition and briefly explains how the product works.

What is the problem this application solves?

Material Planners ensure the SKUs they oversee are ordered at the right time to meet cost, service, and working capital objectives. Doing this requires that they understand how long it takes to supply the good (from suppliers or production) and the consumption of these goods.

Demand and supply plans are rarely 100% accurate. Several internal and external factors affect demand and supply during the execution phase. Disruptive events such as factory shutdowns, material shortages, changing consumption patterns, and port delays can cause volatility in consumption and replenishment and lead to foundational changes and gradual trends.

These macroeconomic factors in the execution phase are not incorporated into supply chain plans as planning parameters are typically updated infrequently. Furthermore, planners are often responsible for hundreds of SKUs. Determining the latest planning parameters and updating the master data for these parameters can be manual, tedious, and prone to errors.

There is a pressing need to incorporate today’s demand and supply volatility into supply chain planning by using accurate and up-to-date planning parameters at scale. Doing so will ensure that demand and supply plans are accurate and in sync with the latest demand and supply patterns.

What is the solution this application offers?

The Master Data Improvement (MDI) app enables material planners to identify materials with outdated safety stock, reorder points, and lead times based on their consumption and replenishment patterns. The app prioritizes material based on the deviation between planned and actual values for these parameters. 

The MDI app leverages ML driven model to eliminate biases and outliers and determine accurate lead times based on historical transactions. The model looks for materials with insufficient historical data to compute parameters for similar materials. 

The Master Data Improvement app also enables planners to validate recommendations by analyzing consumption, lead time data, and trends at a granular transactional level. The app’s simulation feature lets planners simulate recommended safety stock and reorder points by modifying input parameters. 

Action Flows can easily and quickly update planning parameters in the source system. Planners also have the option to bulk update parameters for multiple materials at a time.

What is the value proposition?

Accurate and up-to-date planning parameters are essential for efficient supply chain planning. The planning process is inefficient if the planning parameters are inaccurate and outdated. The Master Data Improvement app helps ensure accurate planning parameters based on the latest consumption and replenishment trends to improve planning accuracy. This, in turn, prevents stockouts and excess inventory. 

By identifying cases where lead times and/or safety stock and reorder points are overstated, the MDI app prevents excess inventory, helps reduce holding costs, and frees up working capital. On the other hand, materials with understated parameters are also flagged for correction with recommendations to increase lead times and/or safety stock and reorder points. This, in turn, prevents stockouts, improves material availability, and prevents lost sales. The solution enables increased customer satisfaction by improving on-time delivery and service levels.  

The Master Data Improvement app also enables Improved labor effectiveness through supply chain transparency and better collaboration across stakeholders.