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This article details how to link supply chain planning to business and organizational strategies. Using the examples of Walmart, Target, Apple, and Tesla, I reveal how different companies compete in their respective markets, and the corresponding supply chain approaches that support such strategies. I also discuss the role of gap analysis and a subsequent capability plan in connecting planning to strategy, the importance of developing the right supply chain KPIs to track adherence to strategy, and how demand management and S&OP play a key role in supporting business objectives.
Sales & Marketing want inventory on hand and ready to sell, while Production is focused on low cost through long production runs and few changeovers. Typically, neither is held accountable for inventory performance resulting in negative impacts on inventory costs and/or customer service. In this article I provide practical methodologies to optimize inventory management using Coefficient of Variation for Volume Variance Analysis. This allows Demand Planners to identify the optimal inventory and manufacturing strategy for each product category, thereby keeping sufficient inventory to maximize sales while controlling production and carrying costs. Alan is an IBF Certified Professional Forecaster (CPF).
This article discusses the importance of establishing strong links between demand planning and inventory management processes. Several steps in the Sales & Operations Planning (S&OP) process can be more effective if this relationship is managed well. For example, linking expected demand patterns with a review of stocking risks and an evaluation of the best stocking strategy. It shows “how-to” examples for integrating demand planning with inventory control to gain a better overall balance across objectives leading to improved financial performance.
The emphasis of this article is how Predictive Analytics/Big Data can be used most productively in managing supply chain. They can be used to determine what happened, why it happened, and to develop a plan for change. Based on pre-defined business rules, they can identify where action is needed, they can help to prepare more accurate forecasts, and, above all, they can help to determine the best course of action with what-if analysis. The article also describes the process to transform successfully the mass of information into analytics to make better decisions in a timely manner.
Because of rapidly changing market dynamics, exceptions are now part of doing business. To survive and grow in this market, it is important to leverage exceptions; this article outlines a strategy to leverage them. To do that, the author suggests first preparing exception reports by ABC classification, at an account level, by items and category, based on statistical forecasts as well as ones that include overrides by Marketing and Sales, and then taking corrective actions. He discusses in detail which action will be appropriate under what circumstances.
With the changing market dynamics, the change management process in supply chain is a must to reduce costs and increase revenue and profit. The author explains in detail steps to be taken and cautions needed for a sustained and successful change process.
During the past two decades, many firms have implemented regional or country-level S&OP. With that, firms have expanded to become true global players. The next step in the evolution to supply chain excellence is the design and implementation of Global Sales and Operations Planning, which the author outlines in this article. He describes the Global S&OP under two scenarios: (1) Where all products can be produced at all plants globally, and (2) Most products are sold and produced at a regional level.
Given the mass of data and information generated by today’s planning and execution systems as well as the complexity and volatility in demand, an eff ective and effi cient exception management process is the key omponent to good demand planning. This article outlines steps to be followed to manage exceptions and challenges ahead.
Shows how to combine volume analysis with variance analysis to determine the contribution of a product to the company’s profit … product with a high variance because of seasonality and data trend is statistically predictable … collaboration with a customer helps to improve forecasts and reduce inventory.
To run the S&OP process efficiently and effectively, you need the support of the top management, without which nothing will work … schedule S&OP meetings at least 12 months into the future so that team members can plan ahead … the best way to start an S&OP process is to start with a pilot program with one or two product groups.
Often Forecasters Use The “best Model” Approach In Forecasting, But For Some Products “best Model” May Not Be Truly The Best ... Coefficient Of Variation (cov) Can Be Used To Determine Whether Or Not A Product Is Forecastable, The Higher It Is, The More Difficult To Forecast ... One Way To Manage An Unforecastable Product Is To Sell It On A Make-to-order Basis.
Describes what we should be looking at whether or not a company has an effective supply chain process.