PLANNING EXCELLENCE
In a supply chain, there are extremely manifold
areas for planning
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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:
o
Adjustment 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; …
o
Specific segmentation approaches (products,
processes, customers, sales channels etc)
o
Demand sensing methods, integrating sales and
product management based volume estimates with a
variety of other sources to validate and optimize the
demand estimates
o
Big 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:
o
Redesign of the production system to have a better fit
between order demand, and estimated demand
driven parts of the production chain, and overall
supply chain
o
Combination of Kanban controlled production areas,
and directive planning based production areas - and
how to link them in the overall planning architecture
o
Use 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
example
o
Use 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)
o
Redesign 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)
o
Use 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