Volatility started with the pandemic and has been exacerbated by weather disruptions such as the Texas storms, labor shortages throughout the world, accidents such as the ship that got stuck in the Suez canal, and wars such as the Russia-Ukraine war. The bottom line is that demand volatility is soaring and supply chain disruptions abound. There is no end in sight! How can businesses thrive during this volatile business environment?
One strategy to get on top of changing customer demand while proactively determining the best way to supply that demand where you’ll achieve superior customer service levels, profitability, and working capital is to pursue a S&OP process (sales and operations planning also known as SIOP, sales, inventory and operations planning, or IBP, integrated business planning).
Listen to my interview with Industrial Insights to learn more.
One Tip to Implement This Week:
We need to get used to volatility as we have entered a new era of VUCA (volatility, uncertainty, complexity, ambiguity). We discussed the state of current supply chain volatility with Industrial Insights and focused attention on how to improve your situation through a SIOP (Sales, Inventory and Operations Planning) process.
It doesn’t take a lengthy period of time to get ready to implement SIOP. Start small with a limited pilot and ramp up so that you can get ahead of your customers’ needs so that you can be proactive in how you best supply that demand. In inflationary times of rising prices, the key is how to manage prices, costs, and inventory levels. If you leave money on the table, you won’t get it back and so don’t worry about perfection; instead, start with a directionally correct pilot and let us know how it goes. We talk about SIOP in my interview with Industrial Insights. Interested in a “how to” article on SIOP? Check out our new blog article to get started.
Please keep us in the loop of your situation and how we can help your organization thrive during these times of volatility and disruption. There will be more winners created than at any other time than since emerging from the Great Depression. To gain additional ideas and insights on how to best navigate these volatile times and thrive, read our new eBook Thriving in 2022. Learning from Supply Chain Chaos. Download your complimentary copy.