Look at the process enabling tools.
Specifically, what does your supply chain team use to manage supply chain planning? Survey after survey points to spreadsheets as one of the primary tools used along with ERP systems and homegrown solutions. In many cases you will discover that processes like demand, inventory, replenishment, and manufacturing planning are limited by a lack of software capability. Poor planning solutions lead to work-arounds, fat fingering, inefficient management and ineffective collaboration with partners.
A common thread of forward-looking companies: they implement integrated supply chain planning solutions, embodied in a Supply Chain Planning System of Record (SCP SOR). Like all SOR’s (ERP — Financial SOR, CRM — Customer SOR, PLM — Product Lifecycle SOR, PIM — Product Information SOR) a SCP SOR facilitates supply chain planning processes, and is the one location for all of the company’s supply chain planning information. It facilitates end-to-end coordination and provides the foundation for supply chain risk management, “what-if” scenario analysis, management-by-exception through rules and process automation, collaboration through workflow and active alerts, KPI visualization, supply chain optimization, and a mature Sales & Operations Planning (S&OP) process.
A key capability of a SCP SOR is enabling multiple “what-if” scenario analyses to assess alternatives and trade-offs. These can be used to develop risk mitigation plans for potential supply chain disruptions. When a disruption takes place (e.g. the earthquake and tsunami of 2011), risk mitigation scenarios can be modified and run to assess the impact and decide what actions to take. Imagine being able to determine the best course of action right after the disruption or while it is still happening while factor the potential cost and revenue impacts of multiple scenarios. Such scenario capability provides significant value across the entire supply chain, from demand and inventory planning to supply management, capacity planning, and order fulfillment.
Case in point: Continental Mills, a leading producer of dry bakery mix products, found themselves dealing with the unexpected in May 2015 as the avian flu threatened their supply of dry eggs, a key raw material. Continental Mills’ response was born out of its S&OP process with clear communication across the company to leverage a variety of creative thinking, process innovation and formulation expertise. Continental Mills’ quick actions kept the company ahead of the crisis at all times. They were able to effectively cover the supply gap through March 2016, reduce the costs of formulations without any impact on the quality of the final product and improve collaborative relationships with its key customers. Read the complete Continental Mills story in Food Logistics Magazine at http://bit.ly/1HPnGAd.
Implementing an SCP SOR drives big improvements in the planning teams efficiency and effectiveness. It refocuses efforts from manual busy work to value-adding activities. A SCP SOR can automate much of the planning process based on pre-established rules and workflows and can prioritize team activities based on criticality and value. The team does more with less, resulting in higher job satisfaction and better employee retention. A SCP SOR improves processes and leads to better planning, which in turn reduces inventories, drives down costs, improves customer service, and increases revenues. Expedited shipping is slashed, manufacturing efficiencies soar and purchasing costs fall. An aligned and synchronized S&OP process gets everyone marching to the same beat, and also delights the C-Level Management team, which is able to report higher profit margins to shareholders.
As we dive into the challenges and opportunities 2017 will bring, why not wish for something extra in our Easter baskets? Better yet, develop and socialize a business case to implement a SCP SOR at your company.