How can digital technologies enable aggregate planning?

This paper explores what aggregate planning is, what digital technology is, and how digital technologies can influence the operation and efficiency of aggregate planning. Both of these will then be synthesized together in order to answer the question: “How can digital technologies improve aggregate planning?” Aggregate Planning is defined as a scheduling method used to identify what materials would be needed for the production of certain products at the precise time, to ensure continuous production of goods/services to meet demand over a 3-18 month period (Heizer, Render, & Munson, 2020). Within the context of Operations Management, Aggregate Planning is strongly dependant on adequate inventory management as there needs to be inventory available in order to adequately plan when and how it will be used (Hashemi-Pour, Amsler, & Donnell, 2024). The output of this is stage is a high level plan which in turn is used for developing a more detailed plan and consolidated in Material Requirement Planning (MRP), a production planning that is used in the manufacturing process of goods defined in Aggregate Planning (CFI Team, 2024). Some common challenges with Aggregate Planning include, inaccurate demand forecasting, over/under utilisation of capacity and inadequate inventory management (Lark Editorial Team, 2024). Digital technologies refer to a set of resources (tools, systems, and devices) that produce, process and store data that can be used to improve processes and operations (Digital Adoption Tool, 2024). They come in various forms including, Information Technology, Operations Technology and Artificial Intelligence just to name a few (Digital Adoption Tool, 2024) . Some of the advantages that are known to be solved through the use of Digital Technologies are Optimised efficiency, stronger communication and continuous innovation, all of which can give a business that use these technologies a competitive advantage to their competitors (Digital Adoption Tool, 2024). In synthesizing the concepts above, we can review the potential use case scenarios of digital technology in aggregate planning to highlight the benefits that can be derived. Aggregate planning requires an extensive amount of data around forecasting demand and current inventory levels that will be needed for production (Udoagwu, 2021). Internet of Things (IoT) devices can be used to gather data about current stock levels which can inform business on what is available and what needs to be ordered. When all this data has been acquired, AI can be used in conjunction with other data points available to draw patterns of demand to draw inferences on the potential future demands that must be met. Digital Twins can also be used to simulate a real world production environment which can draw insights about the system and lead to more data points and insights about the company. This in turn can give the company the ability to respond to market changes quickly and adapt with changing demand in a cost effective manner.