In a supply chain, there are extremely manifold areas for planning•One of the key areas for planning - or better “preparation of the supply chain for future state” is demand planning. Knowing how much of which product will be needed is a key prerequisite for pre-production, sourcing, and capacity management. But it is extremely difficult to precisely know what the future will look like… therefore all of these demand plans are estimates, and a deviation is normal. Yet, in order to understand the predictability of the market, measurement of this forecast error is a very important part of demand planning. And to break this measurement down on a product group level, to identify areas of better, and separate them from areas with lower predictability. But there are many other ways to improve demand planning quality…•A second key are for planning is production planning. This is, of course, driven by the demand plan, but also to a large extend by actual orders. Therefore “demand netting” is a key alignment of demand and production planning (which portion of the volume is actual orders, which is forecast). Production planning also allows to use different planning strategies; especially when enabled by an Advanced Planning System. To find the right balance of settings between delivery reliability, WIP and finished goods inventory levels, throughput times, and other criteria is a procedure which is not a one-time-event, but needs to be adjusted on a regular basis. Another key element is the design of the procuction system, and its appropriate modeling in the APS system. And there are many other ways to improve production planning quality…•Third key area for planning is the supply of goods, to create delivery plans, and purchase orders, for suppliers regarding materials, components, and specific services. The most simple method is MRP, Material requirements planning. But with a high number of customer order changes, or production order changes, or variations in yield, this leads to high fluctuations in requested volumes and timings. Therefore targeted supply strategies per component, and per supplier, need to be defined, and related planning strategies applied. A key consideration in this area is the risk associated with the supply reliability, and how to mitigate it. And there are many other considerations how to improve supply planning quality …•Besides many other areas of operational planning exercises, increasingly the overall demand and supply balance is a vital area of planning, covered by the procedures of Sales and Operations Planning (S&OP), or more often now Sales, Inventory and Operations Planning (S&IOP). More information on this you find in the section on Integrated Business Management.
In our service offerings, we identify how to shape your current planning practices, as well as your operations, towards a better impact of planning efforts•Here we highlight some of the most common solutions we have helped to implement for our clients. But this is only a selection of the manyfold possibilities to improve planning, and related operational process performance•Use of more sophisticated demand planning methods, for example:oAdjustment in current demand gathering processes and procedures - who should be involved for which type of information; what is the required granularity and forecast precision at what point of time; which type of information is required to trigger what kind of preparation / ordering process; …oSpecific segmentation approaches (products, processes, customers, sales channels etc)oDemand sensing methods, integrating sales and product management based volume estimates with a variety of other sources to validate and optimize the demand estimatesoBig data analytics to gain better insights into customer and consumer behaviours, and how to link demand estimates to actual order intake•Use of more sophisticated production planning methods, for example:oRedesign of the production system to have a better fit between order demand, and estimated demand driven parts of the production chain, and overall supply chainoCombination of Kanban controlled production areas, and directive planning based production areas - and how to link them in the overall planning architectureoUse of postponement-techniques to create different zones of the supply chain, and decoupling of final customer variant creation from potentially high volume production areas (relocation of the customer order decoupling point)•Use of more sophisticated supply planning methods, for exampleoUse of targeted, high impact segmentation approaches for suppliers, materials, goods, and components, to have a better, more focused management of these supplies (this covers the physical supply as well as the related planning strategies)oRedesign of supply methods and procedures, to match production and finished products supply processes with targeted, demand- and supply-type driven replenishment processes (integrated supply concepts)oUse of supplier collaboration tools and platforms to increase the speed and quality of information exchange, and to establish joint planning and execution processes and platforms