Planning automation: how to organize and implement modern systems

With how fast things go on in the market today, at times, companies do not take any time to think through all the options available before making decisions. The old-fashioned way of planning — when everything was done in good old spreadsheets — just does not work anymore due to massive data volumes with speed of change. With automated (versus manual) planning, you have a totally different scenario. Automated systems can process thousands of pieces of information in minutes and will create a plan based upon real-time data. There are no delays, no human error. For eight years now, I have watched how these types of systems have dramatically changed the way companies operate. I find that focusing on areas where time is critical is the best entry point for these types of systems. Budgeting, production scheduling, and resource management are all areas where you can benefit greatly from using automated systems.

“In the last 8 years, I've done a lot of experimenting in the automation sector and in different planning models, and I have come to one main conclusion: if you are smart about where you put your resources to implement a system, it will pay for itself within 3–6 months, on average, as long as you put it in an area where time is a critical factor.”

Planning automation is a major opportunity for companies that work with large data volumes and complex supply chains. There are numerous examples of how companies that have automated planning have reduced their overall costs by 25% to 40% and have made decisions 3 to 5 times faster than they previously were able to without using automation.

A Brief Overview of Planning Automation

At a high level, a planning automation system consists of programs and algorithms that can generate, maintain, and modify plans independently. To achieve this goal, systems designed for planning automation will automatically collect, process, analyze and predict data to provide users with recommended actions. These systems are essential because they operate continuously without becoming fatigued, leading to fewer errors when compared to the repetitive nature of bulky spreadsheets and manual entry. These tools are being applied to a variety of areas, from everyday accounting and resource management to long-range strategic financial planning.

For example, in manufacturing the systems can be used to optimize the loading of equipment as well as to assist with the management of inventory, while in marketing they are used to synchronize marketing campaigns and budgets as well as to track return on investment (ROI). Moreover, the remarkable speed and volume of information processing is astonishing. A person can process only a maximum of 50 variables in "real time," whereas with computers it is a non-issue. Organizations that use planning automation systems will typically conduct ten-fold more "what if" scenarios than traditional budgeting methods.

Real World Example: In 2023, a large e-commerce business spent 40 hours per month on procurement and faced a constant barrage of issues with shortages and surplus inventory. They were able to reduce their procurement time from 40 hours to 8 through the use of an automated planning system integrated with a CRM system, warehouse management, and business intelligence technologies. This allowed them to reduce shortages by 70% and surplus inventory by 45%. They also saw a corresponding 18% increase in profitability.

Profitability, Benefits, and the Importance of Automation

Operationally, planning automation has been most beneficial in industries where mistakes are costly, such as manufacturing, finance, and logistics. Making a decision late can have a significant financial impact on your company as it could lead to the purchase of goods that are no longer needed, missing deadlines and/or spending too much money. Below you will find some of the primary benefits of timely decision-making:

• Faster decision-making. Not only can you make decisions in hours or minutes (depending on how quickly you get current and accurate data), but you will also be able to make a decision in days instead of weeks or even months.
• Improved accuracy of forecasting. AI's ability to analyze historical data in conjunction with the use of predictive modeling techniques result in companies being able to forecast operational requirements and actual demand at least 30-50% more accurately than if they were to try to develop forecasts without AI's assistance. This translates into fewer errors in both budgeting and in planning for actual consumer demand.
• Elimination of repetitive tasks. The automated system will do the tedious work of collecting reports, reconciling data, and transferring data for employees to focus their time and energy on analysis and developing strategy.
• Risk management. Automated systems will track deviations from normal operations, alarm you when a problem arises, and provide you with immediate corrective recommendations.
• Scalability — easy and painless. Launching an automated planning system will not require an increase in labour proportionate to the number of projects added.

Companies utilising automated planning systems have been able to report operating margins at least 22% higher than their competitors who continue to rely on traditional processes.

Planning Automation: Recommendations and Action Algorithm

Planning automation is not something that can be completed in one day; it will require an incremental, systematic approach taken by the entire team; however, there is assurance of ongoing momentum once you get started. Here is the action algorithm:

Step 1: Process Audit

The first step should include conducting a thorough review of the planning process as it operates today including: what is being planned (finance / production metrics / operational metrics), what are the tools being used, how much time is being spent on how many different tasks, where do the bottlenecks / errors occur, etc. If you automate a chaotic process, you will only amplify its inefficiencies.

Step 2: Identify Priorities

Establish 1–2 areas of where repetitive tasks and/or errors have occurred with the goal of obtaining measurable results (return on investment) and to demonstrate success as soon as possible (e.g., budget vs. actuals / production planning).

Step 3: System Selection

There are many different products on the market to choose from — universal ERPs, MRP, BPM or BI products, even no-code products. Decisions should be based on size of business, industry, budget available and the company's current IT infrastructure.

Step 4: Preparing Your Data

Your data should be clean and current when it is put into a planning system. If not, the organization will produce incorrect forecasting because of inaccurate data. For example, remove duplicates, standardize data directories and make sure the directories are synchronized with their original sources.

Step 5: Pilot and Debugging

At first, the planning system will only be implemented at one location and debugged and the system introduced to users and feedback on how to improve the planning system before expanding into other locations.

Step 6: Scale Your Planning System

The planning system will be expanded to other departments, have additional modules installed, and users will continue to receive training for adaption as their role changes due to the new tasks being assigned.

Step 7: Monitoring and Optimizing

Constantly monitor key metrics such as: cycle time for producing a plan, forecast accuracy and user satisfaction. Identify and analyze the "bottleneck" where the planning system improvement process is failing.

Arguments in Favor of Planning Automation: Specific Figures and Facts

• Reduce planning time by 50–80%. Companies that spent 200–300 man-hours during the month prior to automation reduced this time to 40–100 after automation.
• Improved forecast accuracy. Accuracy improved by 30–50% due to a decrease in human errors associated with large volume manual processing of data.
• Reduce operating cost by 15% to 25%. Automation reduces excess inventory, downtimes, and eliminates the duplication of functions.
• Speed up decision making. A real-world example of automation: budgeting cycle reduced from six weeks to two weeks, number of approval cycles down from 5 or 7 to 2 or 3, accuracy of revenue forecasting improved from 65% to 87%; budget savings of 12%.

Common Automation Mistakes and How to Avoid Them

• Automating fragmented processes. If a process isn't optimised, speeding it up will make the problem worse and create further bureaucracy.
• Not considering the quality of the data. Using dirty or incomplete data is an obvious route to inaccurate forecasts. Audit and clean your data.
• Making the system too complicated and difficult to use. Using redundant functionality causes a huge drain on employee engagement and results in low usage of the tool.
• Not involving the end users in the process. If employees are not trained or acclimated to the new tool, they won't use it at all.
• No clear guidelines and procedures. Efficiency and data accuracy only improve when there are clearly defined roles and responsibilities.

Various Types of Planning and Their Automation

Production Planning

Automated scheduling of equipment and loading, inventory management, material requirements planning, and deadline management. Tools include SAP Production Planning, Oracle Supply Chain Management, 1C:Production, Odoo and Katana. Average reduction in lead time is 20% to 30%, in inventory is 15% to 25%, increase in equipment utilisation of 10% to 15%, and improvement in quality levels 15% to 20%.

Financial Planning

Automated budget development and approval, cash flow forecasting and execution — applications such as SAP BPC, Oracle Hyperion, Anaplan, and Adaptive Insights. These provide budget cycle reduction by 40-60%, decrease in overhead costs, improved forecast accuracy by 25-35%, and reduction in finance department costs by 20-30%.

Operational & Information Planning (Accounting)

Schedule planning, project management and logistics management. The use of modern computerized systems like MS Project, Asana, Jira and Monday.com can create an increase in resource utilization of 15%-20%, and improvements in response time to changes of 30%-40%.

Automated Planning Systems: Overview and Capabilities

Supply Chain Automation Benefits

Allocates resources, schedules activities and reduces the amount of time that a business is not able to deliver a product to a customer. Organizations can take full advantage of the opportunities provided by automation. With their emphasis on automating work processes, many companies are now able to achieve savings through better use of technology. The major benefits include:

• Improved Customer Service. By automating certain tasks (such as order processing), the overall response time will be reduced and customers will receive their orders more quickly.
• Elimination of Waste. Automated processes help eliminate manual labor (such as manual order entry) and provide information faster. This helps to drive down costs and improve profitability.
• Streamlined Communication. Companies working within the same supply chain can create automated systems to communicate, eliminating delays caused by human error.
• Increased Availability of Products. Automated systems allow warehouses to accurately track inventory levels in real time.

Conclusion and Development Prospects

Costly procrastination results in diminished competitiveness. Companies that habitually postpone tasks are negatively impacting their competitiveness, wasting time, and in turn, causing significant revenue loss. We can expect to see increased AI and machine learning implementation in the near future, where AI agents are able to analyze data on their own to identify patterns and make recommendations without constant human intervention.

The ASCN.AI No-Code platform offers businesses the ability to create these types of AI assistants. No-Code AI assistants can integrate with many different business systems and dynamically adjust to meet the unique individual needs of businesses – this represents a new level of automation that is superior to traditional methods.

Frequently Asked Questions

Can I automate planning processes without spending a lot of money on IT?

You can definitely automate your processes without spending a lot of money on IT! No-Code modern platforms like ASCN.AI allow companies to automate their processes very quickly and with a minimal amount of coding for a fraction of what traditional ERP or automation systems would cost.

What process should I start my automation process with?

Start with the most critical business areas that contain a high-level of routine tasks that are subject to human error, such as: financial planning; production processes; and project management.

How long does it usually take to implement an automation system?

The typical implementation time for a large automation system designed to automate enterprise management processes is six months. Automation projects for Cloud Service Provider (CSP) solutions generally take 2 to 6 months to implement, while No-Code solutions can contain the entire automation process from beginning to end in just a few days or weeks.

Will I need programmers to implement an automation system?

If you are using a No-Code platform, you will not need any technical expertise. However, if you are using traditional ERP or automation systems, you will need quite a bit of technical experience, and most likely, you will need to engage an outside vendor.

How do I measure the difference that my automation efforts are making?

To measure the effect of the automation on a business, you can compare key performance metrics before and after: planning time, forecast accuracy, number of errors, operational cost, and user satisfaction.

Disclaimer

This document provides general information only and does not represent an endorsement of any type of investment, or any form of legal or security advice. If you decide to use an AI Assistant to automate your business processes, you should be sure to adequately research the functions of any specific platform you are considering using.