Posts categorized as 'Supply chain management'

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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[On-Demand Webinar] Getting started with artificial intelligence in supply chain planning

AlexaCheater

Focus on a practical approach to implementing artificial intelligence (AI) and machine learning (ML) in your supply chain planning.

A pragmatic approach to getting started with artificial intelligence in supply chain planningThat’s the advice from industry-leading experts, as heard in our recent webinar, A pragmatic approach to getting started with artificial intelligence in supply chain planning, now available on-demand. Hosted by Robert Bowman from SupplyChainBrain, guest speakers Brian Tessier from Schneider Electric, Paul Cocuzzo from Merck and Trevor Miles from Kinaxis, discussed what you could do right now to take advantage of this trend.

From finding a practical application that provides tangible value for your business, to ensuring you have the right organizational structure in place, Tessier and Cocuzzo provided real-world advice driven by their organization’s own quests to implement AI in supply chain planning.

“Having AI take a world view based on best practices, and then applying it to your legacy data structures and business rules can give you insights into things you don’t even know are problems for you,” notes Tessier. “We found very quickly we had some very poor assumptions about lead times, both from suppliers and interplant shipments from within our supply chain. Given the number of transaction we do, the complexity of our product portfolio and the number of entities involved, there’s no way we would have found this any other way.”

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Get your demand planning and forecasting game on

AlexaCheater

Outplay your competition with a smarter, stronger demand planning strategy

Demand Planning GameCustomer demands are changing. So why isn’t your demand planning strategy? It’s time to level up your demand planning and experience revolutionary breakthroughs in supply chain performance, planning and profitability.

Demand complexity is increasing thanks to consumers who now want more customization, omni-channel purchasing options, rush delivery, easy returns, and environmentally and ethically crafted merchandise, just to name a few present-day requirements. So how can your supply chain handle it all?

The key is to recognize solving today’s demand planning challenges just isn’t possible with yesterday’s dated processes and technology. It’s like trying to play Call of Duty: WWII on a system designed only to handle the technical requirements of Duck Hunt. The inevitable lag time, glitches and poor visibility destroys the experience. Yes, once upon a time you may have considered those old systems cutting edge. Now they just don’t have the capabilities you need.

Successful demand planning is quick, collaborative and up-to-date – not slow, siloed and full of stale data. It can’t take weeks to make critical decisions that don’t even align with reality. When changes to your demand plan happen, communication between business functions has to be immediate. Everyone needs to understand the ramifications of the change and come to a compromise-based corrective path.

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The supply chain planning system crystal ball

JohnWesterveld

supply chain planning crystal ballTwenty-five years ago, I bought my first personal computer. One of the first applications I installed was a cookbook — the killer home PC application of the time. The second application was Quicken to manage my finances. Funds were tight then and I really needed to keep tabs on my spending.

Every transaction was meticulously entered, every statement validated against my records. Then I discovered the calendar function. With the calendar, I was able to schedule my known income (paycheck) and my known expenses (car loan, mortgage, utilities, taxes, groceries, etc.) and Quicken would project my bank balance into the future.

For me, this was game changing!

When making discretionary purchases, I could look at my projection to make sure that if I made that purchase, I would have enough money in the bank, not only now, but at the end of the month when my mortgage and car loan came out. It was my crystal ball, and I regularly asked it questions like:

What if I buy that awesome new 27″ Sony Trinitron television this week, could I still make my mortgage payment? What if I save my money this month? Or don’t go out for supper on the weekend? Then could I buy it?

Today’s supply chain professionals need a crystal ball, too. The only difference is that the decisions are much more complex and far reaching than balancing my finances.

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