Tag Archive: demand

Lean or No Lean, a Demand Plan is a MUST

June 16th, 2016
demand plan

Demand planning delivers such useful information on client demand that even Lean devotees will find data on longer-term forecasts, seasonal products and trending patterns useful.

Whether you are on the Lean journey or not, you need a demand plan! Prior to forming LMA Consulting Group, I was a VP of Operations and Supply Chain for a mid-market manufacturer. Our Board hired a lean consultant who insisted we had to be purists – there is no in-between. If we were to embrace lean (and, who wouldn’t want to be lean, after all?), there are some lean purists who say “no need for a demand plan”. Somehow, this is what was adopted as gospel at my company; however, it was NOT accurate — assuming you wanted to service customers. From this frustrating experience along with several others in working with clients, it is apparent that the demand plan is not dead!

If we take it back to the basics, I have to wonder why anyone would ever think they didn’t need a demand plan. In essence, it is like saying you don’t need to know what you’re likely to sell, use, and transfer to other facilities.  Why wouldn’t we want to understand this information? Well, the lean purists would say kanbans are connected directly to customer demand and pulls it through. Certainly that is a successful way of planning in many organizations and for “A” products especially those with those with relatively even demand.  However, it doesn’t mean you wouldn’t want a good feel for your demand. It is always helpful to provide longer-term forecasts to suppliers and to use internally for staffing, skills building, etc.

And, when it comes to B and C items, seasonal items and other trending patterns, understanding the demand plan isn’t a “nice-to-have”; it is critical to success. We estimate that at least 80% of our clients can gain significant bottom line results from focusing a bit more attention on the demand plan.  If you are interested in discussing further, contact us.

 

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SIOP as a Win-Win-Win-Win

June 14th, 2016
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LMA Consulting Group offers clients an opportunity to align demand with supply to drive exponential results through our 4Excel proprietary process.

Our favorite end-to-end supply chain project supported a SIOP (sales, inventory and operations planning) project for growth. Although we enjoy SIOP projects as they are one of the best ways to achieve a win-win-win-win of growth, service, margins and cash, this particular client had some complex data and dramatic growth to consider.

SIOP is all about aligning demand with supply — AND the different functional areas of the organization on one page. Accomplish the second, and all else will fall into place. This particular SIOP project was no different.

First, we had to get everyone on the same page with why we were embarking on this project — how would it help the company? And each individual?

Next, we had to get a handle on demand. What were the growth projections? Were we able to “add up” from the details to the same numbers the executives knew to be accurate at the high level? If not, how would we reconcile these matters? There is no need to get lost in details yet we had to be in the same ballpark. Unfortunately it is quite hard to execute a plan if we don’t understand the plan in the first place!

Then, we had to crunch the numbers at a high enough level to not get stuck in the weeds yet at a low-enough level that it would still be meaningful to the people who knew what it took to succeed. We had to get past imperfect data and make sure we were concerned with being directionally-correct. How could we estimate the number of machines, types of machines, number of people, skills of the people — and even buildings required? Should we be off-loading, moving volume within the facility or outsourcing to other facilities within the system? What could we do rapidly while focusing on customer service and customer expectations including margins and cost?

In essence, we brought the best ideas together with SIOP. When it came together into one process and one document, the answers became clear. We had a plan and clarity on how to triple and quadruple the business — and, now we could execute the plan!

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SIOP beyond Borders

May 6th, 2016
SIOP beyond borders

In today’s interconnected business environment amplify SIOP’s reach and potential to include all supply chain partners, even globally.

SIOP (Sales, Inventory & Operations Planning) is one method to align demand with supply while also aligning the various functions within an organization to deliver strategic objectives and maximize business value. As popular as it is becoming, I think we must challenge ourselves further with SIOP beyond borders.

Although it certainly can mean the interconnectivity in today’s end-to-end supply chain, it also can simply mean the connectivity and alignment among supply chain partners. For example, as we connect our customers with our suppliers, our IT partners with our customers’ requirements and the like, we gain a distinctive advantage in the supply chain. It is simply amazing that we can gain exponential results by connecting functions within a company and organizations in the supply chain.

Why stop there? Many of our supply chain partners could be international partners and cross borders. How can we develop an integrated planning process that not only incorporates what is rarely done in any organization but also consider global impacts? Start by expanding your mind and thinking.  Global impacts affect us every day, ranging from natural disasters to port strikes to political unrest to rules and regulations. One of the best ways to bring out the strengths of a global supply chain and leverage the collective strengths for the common good is to think about SIOP beyond borders. If you are interested in learning more about this topic and implementing it at your company, contact us to learn more about our proprietary SIOP process, 4 EXCEL, proven to gain exponential results.

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