Customers are requiring manufacturers to supply goods at ever cheaper rates, while also insisting they accurately fulfil shorter delivery times.
If this isnt pressure enough, many customers demand that manufacturers are able to manage spikes in demand as a result of product promotions or peak seasonal periods, etc. From time to time producer brands will also require manufacturers to quickly and effectively realign their business and operational processes in order to prepare for the launch of a new product to market. This is why maximising demand forecast accuracy is so important in order to better anticipate required parts and materials from suppliers, ensure there are sufficient inventory levels without overstocking and to more efficiently schedule machinery and labour capacity on the shop floor.
Demand forecasting and planning naturally becomes even more complex if operations involve the global supply chain. A manufacturer may be based in, say, the UK, but could have a number of other plants situated around the world. To better balance production with available machinery and labour capacity, it could centrally outsource production of certain goods to these plants, or even to independent facilities in, for example, the Far East. It might have a global network of parts and materials suppliers also stretching as far as Asia Pacific, and it could be required to supply goods not only into the UK market but worldwide, either direct from the source of manufacture or via self-owned or independent warehouse facilities. Needless to say, such potentially longer supply channels need particularly careful management.
Globalisation can have its financial and operational advantages, but without having the most reliable, collaborative supply chain management infrastructure in place that ensures global visibility of key business and operational data throughout the supply chain the manufacturer can suffer a series of costly, even crippling constraints: parts or materials can arrive in the wrong quantities or specifications, arrive late or not at all; inventory levels may not make up the shortfall; the shop floor may suffer costly dead time as a result and the due date is likely to be missed.
One of the most important tools to better manage and plan activity throughout the global supply chain is Demand Forecasting & Planning software functionality, including Sales & Operations Planning (S&OP).
On the Demand Forecasting & Planning side, the software should have the capacity to be fully integrated, web-enabled and visible to all parties concerned the manufacturer, its suppliers, distributor, and producer/customer across the entire supply chain, whether UK-based or more geographically far-reaching. It should be able to ensure everyone involved has knowledge of future anticipated demand patterns, so they can prepare the means and capacity to respond accordingly when the time comes. Seamless sharing of forecast demand information can not only aid each company in the supply chain network in terms of planning time and resources in advance, it can also provide them with related project information in order for them to appropriate the right level of finance in preparation for when things start moving.
On the S&OP side, the software can assess all known business and operational data held within the manufacturers ERP, CRM, WMS systems, etc., regarding existing orders, anticipated orders based on historical patterns, inventory levels etc., and formulate the most cost- and time-efficient demand plan for the entire extended supply chain. This automated plan can be easily accessed by each global partner within the supply chain via a dedicated web portal, EDI or by receiving regular updates by email. Each location and department can then use this data to plan their own individual business and operational activities in line with the central plan.
By ensuring all supply chain partners enter into an agreement to align all their activities to this centrally determined plan, every department and location from marketing and sales to production and warehousing knows the part it is expected to play in order for all supply operations to be perfectly synchronised.
Through having in place such a seamless, collaborative supply chain management infrastructure, coupled with the means to automate optimum demand forecasting and planning activity based on all available business and operational data, the manufacturer is in the very best position to be more cost effective and speedier in execution. It will be better geared to keeping costs to a minimum, ensuring maximum agility on the shop floor and in the warehouse, and delivering to the customer on time. There is no better way forward in order to improve efficiencies and secure a competitive edge in an increasingly complex and demanding business sector.
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