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How to Give a Twist to your Supply Chain Planning

HOW TO TURN THE PLANNING OF THE SUPPLY CHAIN

In an era of BI and indicator analysis where metrics are attractive but can also be misleading, companies must try to identify priorities within a supply chain by examining unmet business needs. Here are some scenarios about where to stop to review first and how to act in each situation:

Scenario 1
Companies believe they have a solid forecast, but suffer from low service levels. This affects costs, performance and may even incur the loss of sales.

Solution

To support an increasingly complex operation, planning models must be categorized by key characteristics. In this way, the potential ROI that a demand planning solution provides is more accurate.

Scenario 2
Companies have a good demand management; With the right inventory and proper visibility of orders, they know exactly what the operation needs; however, they struggle to boost demand and take better advantage of assets that directly affect costs such as utilization, performance, downtime and labor, among others.

Solution

A significant benefit can be obtained by designing restrictive scenarios with finite capacities (e.g. equipment, materials or work) without neglecting the business objectives and the logical sequence of production. Given the number of possible exchanges, it is recommended to consider an advanced solution for production scheduling.

Scenario 3
Probably all the fundamental processes of planning are present, but the operation works out of alignment with the business unit. Accumulated metrics, conflicting information sources and biases can create a misalignment that is often summarized in longer sales cycles and poor service levels. The new product launches are an example of this scenario as they show their failures or disconnections.

Solution

Sales and operations planning tools (S&OP) synchronize functions to balance supply and demand, integrating not only the logistics area but the financial team.

How and where to promote value is not a unique decision because it encapsulates all those fundamental and eternal questions in the supply chain. Therefore to manage operations well, it is important to review the changes that occur in all parts of the supply chain, the market, customer expectations, distribution channels, and competition. With greater visibility, companies can be more agile before unexpected scenarios and little by little, eliminate these frequent problems.

Author: Cerca Technology