Planning is becoming more complex, but smarter planning makes the difference. In this Supply Chain Byte, Lisa Anderson outlines three key planning challenges manufacturers are facing today – and three ways to address them.
There are stark trends emerging in clients across the manufacturing sector. From food and beverage to machinery and equipment manufacturing, we are seeing challenges arising with planning processes and systems. Key highlights include:
- Internal delays: There has been significant internal delays across the board. For example, engineering teams are struggling to keep up with demand, creating down-the-line impacts with Purchasing, Planning, Operations, and other functions. Thus, orders are delayed and Operations cannot plan as effectively.
- Supplier constraints: Clients are experiencing numerous supplier constraints, resulting in late deliveries, negative impacts to production, and late deliveries to customers. Worse yet, without product available, lost sales occur and customers gain a negative perspective of the brand.
- Silos: Silos have emerged with the lack of collaborative thinking and data that doesn’t add up. Unfortunately, this can lead to inaccurate reporting, poor decisions, and lack of coordinated execution.
Thus, companies must consider rolling out supply chain upgrades with SIOP (Sales Inventory Operations Planning) and integrated planning system improvements.
- SIOP: This forward-looking process provides a coordinated approach to proactively managing demand and supply while aligning Sales, Operations, and Finance on a single page. Gaining alignment with Finance has proven particularly challenging for clients recently with the volatility of interest rates, tariffs, and capital expenditure plans. To learn more about how to roll out and optimize SIOP, download our eBook, “SIOP: Creating Predictable Revenue and Profitable Growth“.
- Planning processes: There is a widespread need to upgrade demand planning/ sales forecasting, master scheduling/ planning, MRP (material requirements planning) and supporting boms, routings, and system setups, and associated planning processes such as replenishment planning, DRP (distribution requirements planning), and vendor managed inventory (VMI) programs. Our best clients utilize ERP systems and embrace the use of technology.
- Advanced planning (APS): Clients must take their planning processes to the next level to keep up with changing customer conditions, geopolitical events such as the challenges in the Strait of Hormuz, the lack of resources, and the need for speed. Crowd sourcing potential disruptions, enhancing end-to-end supply chain visibility, and utilizing artificial intelligence in advanced planning systems to simulate options and optimize plans.
From improving visibility to strengthening processes and leveraging the right tools, smart planning is essential to staying ahead and making better decisions.
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Planning & MRP Upgrades to Support Revenue Plans & Proactively Plan Capacity