Vendor-managed inventory and distribution planning in the food and beverage industry – here’s something to chew on

JeswinPhilip

vendor-managed inventoryThe Food Packaging Trends and Advances report from PMMI forecasts that the US Food and Beverage industry will experience a 2.9 % CAGR through 2022. The report also mentions that the global growth rate is almost double that of the US food industry. It’s a prediction that shouldn’t be ignored.

Food for thought: Time for a different kind of supply chain

Continued economic growth, customer preferences (especially those of the millennial generation), the rise of ecommerce and the Amazon channel, increased product choices and newer product categories in the marketplace are all driving the need for efficient and effective supply chain networks to support customer demand.

Among the many supply chain initiatives taking place today, vendor-managed inventory (VMI) has become an increasingly effective process and business model to help organizations share risk and information between vendors and customers — while benefitting from lower stockouts, reduced uncertainty and lower costs.

As with any industry, food and beverage faces its own unique set of supply chain challenges, including:

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The ultimate Kinaxis credential

JoeCannata

Kinaxis CertificationIt all started a little more than two years ago with two supply chain management certification exams — Kinaxis® Certified RapidResponse® Author Level 1 and Kinaxis Certified RapidResponse Administrator Level 1.

Since then, we’ve grown our supply chain management exam portfolio to provide exams for contributors, authors and administrators, while also adding integration- and application-focused exams.

We’ve also added three new credential levels to help partners and employees qualify for integration and solution consultant roles, which go beyond formal written exams to include training in soft skills and practical field experience.

Combined, these exams and achievements create a firm foundation upon which to build toward our ultimate, top-level credential, the Kinaxis Certified RapidResponse Master.

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The future of integrated business planning

AlexaCheater

Prescriptive analytics and artificial intelligence are coming

In my previous blogsIntegrated business planning I talked about integrating finance into supply chain operations, including outlining how integrated business planning (IBP) can help. Now it’s time to look at how IBP can take your supply chain to the next level of performance, and bring finance right alongside with you.

Just as with other areas of supply chain management, machine learning and artificial intelligence (AI) are likely to find roots in IBP, primarily through the introduction of prescriptive analytics. Unlike descriptive analytics, which looks at what happened and why, and predictive analytics, which explores what will happen, prescriptive analytics suggest actions and shows the implication of each potential option. It tells you the best way to get to where you want to be.

Modelling financial and operational business constraints and using prescriptive analytics alongside IBP provides enhanced visibility and the ability to better manage change. The result is a more holistic picture of the organization and faster decision-making by executives. IBP done well provides a periodic rolling forecast, highlights gaps between the budget and operations and helps direct the company to where it wants to be.

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Supply chain planning – it’s time to get personal

BillDuBois

When sacrificing family time becomes the norm

Supply Planning Without the Personal Sacrifice Supply planning – to profitably align supply with demand. It sounds like something you could get done during an honest day’s work. As it turns out, it’s not that easy.

When I was planning supply, it wasn’t unusual to have a dinner interrupted, a weekend cut short or a vacation disturbed. That happened to be the norm. It wasn’t a surprise when a supplier shipped late, a machine was suddenly overloaded or a demand planner informed you that you were working off the wrong demand plan. We spent hours, even days sifting through countless spreadsheets and trying to navigate manual processes.

During that time, we also invested in some “just-in-time” techniques we borrowed from the Toyota Production System (TPS). Unfortunately, our planning survival instincts kicked in and our just-in-time processes were supplemented with just-in-case fallbacks. All of a sudden, we had just-in-case inventories,  and an exceptionally high number of expedites which really did nothing more than mask our supply planning deficiencies.

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Benefits of integrating finance and supply chain operations

AlexaCheater

Bridging finance and supply chain operations improves efficiency

In my earlier blogFinance & Supply Chain Operations Integration , I examined common obstacles organizations face when bringing together finance and supply chain operations. Now let’s look at the rewards you can reap by actually doing so.

Bringing together finance and supply chain operations can make your company more operationally savvy and improve financial efficiency through:

  • Exposing potential risks and enabling executable and optimized plans
  • Driving sustainable cost reduction and profitable growth through more mature planning models
  • Combining rolling forecasts and S&OP to streamline business processes

Tighter integration can also lessen the pain of the budgeting process since a forward rolling plan means managers will already have consensus approval for some of the next year’s requirements through confirmation of the S&OP process. Without finance’s involvement in S&OP, the budget will start from a common plan based on what has happened in past years, and not one actually associated with what your operations team is forecasting will happen next year.

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Overcoming obstacles to integrating finance with supply chain operations

AlexaCheater

Using integrated business planning can help

In my earlier blogFinancial planning - Integrated business planning, I explored how integrated business planning (IBP) can help bring together finance and supply chain operations.

IBP helps achieve key performance indicators (KPIs) like sales, customer satisfaction, inventory level and other metrics outlined in the strategic plan. Oliver Wight research shows “companies that do integrated business planning well achieve greater benefits than companies that do not.”

Those benefits, as outlined by the Aberdeen Group, include:

  • 55 day or less cash conversion cycle
  • 74% supply performance
  • 70% SKU-level forecast accuracy
  • 91% customer satisfaction

But it’s not quite as simple as saying, “let’s start doing IBP.”

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Finance and supply chain operations: Can IBP bridge the gap?

AlexaCheater

It’s no secret these two groups don’t always see eye-to-eye

Integrated business planningFinance and supply chain operations—both have a huge impact on your company’s bottom line, but oftentimes there’s conflict between these two organizations, especially when it comes to the numbers. Disparate data, siloed processes and discrepancies between the operational forecast and the corporate budget are all contributing factors.

But is there a way to bridge the gap? Integrated business planning (IBP) may be a possible solution.

What is IBP?

IBP is a next-gen planning process often referred to as advanced S&OP. Consulting firm Oliver Wight describes it as, “… the business planning process that extends the principles of S&OP throughout the supply chain, product and customer portfolios, customer demand and strategic planning, to deliver one seamless management process.”

Contrasting the early stages of S&OP that focused on internal processes, attention has shifted to a more collaborative planning practice aimed at better influencing and managing demand. As a result, a more strategic business planning model has emerged.

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2018: The Winter Olympics, a royal wedding, space exploration and, of course, big supply chain planning events

TeresaChiykowski

2018 eventsAs we bid farewell to 2017 and usher in a new year, what can we expect to see in 2018?

As per usual, folks will flock to the gym in record numbers to burn off those extra holiday pounds and then, all too soon, workouts will become a distant memory (These are “January people” according to an article in the Huffington Post).  I know this to be fact because I am a January people.

This year will also see athletes from around the globe gather in Pyeongchang, South Korea to go for gold at the 2018 Winter Olympics. “Royals” fans will be glued to their TVs and personal devices to watch Prince Harry wed actress Meghan Markle at St. George’s Chapel in England. In November, space travel enthusiasts will follow the launch of NASA’s InSight as it embarks on a journey to the “Red Planet” – Mars.

But wait, there’s more.

When it comes to big events in 2018, let’s not forget about the world of supply chain planning. There are some cool events in 2018 you might want to check out. Here are just a few at a glance.

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