Cash, capacity and supply chain volatility: Production planning to the rescue

Replan has partnered with renowned supply chain expert
Bob Ferrari, on a multi-part thought leadership series to help executives and planners alike navigate through supply chain volatility. Bob is the Founder and Executive Editor of Supply Chain Matters, building from his previous roles as analyst director at AMR Research and Gartner

In the first blog titled “The Increased Importance Of Production Planning And Scheduling In The New Normal”, Bob focuses on the increasing importance of cash preservation, production planning and scheduling in today’s volatile times.

Our top takeaways from Bob’s blog

1. Adaptation, Realignment and Response will need to become a well exercised muscle within a company and its supply chain.
2. Continued economic uncertainty means greater focus on cash preservation, supply chain productivity and efficiency.
3. Executives need to instill greater supply chain agility and efficiency using Industry or Manufacturing 4.0 automation capabilities.
4. Production planning, with special emphasis on capacity planning, plays a key role in delivering on the Manufacturing 4.0 promise.
5. Cloud-based intelligent planning solutions that automate and reduce manual planning are essential, not just a nice-to-have.

The view from the frontlines

Being a part of the supply chain planning ecosystem, our solutions consultants are in daily conversations with frontline supply chain warriors: executives and planners in various industries including CPG, F&B, Life Sciences and Chemicals, battling against today’s realities, squeezing more out of existing assets while dealing with increasing supply chain complexity. These are their reports:

Cash is king. Capital investments and working capital are being closely scrutinized.

A Controller at a leading cola manufacturer described how old-fashioned sweating the assets is back in vogue. A European F&B manufacturer is reallocating their inventory working capital away from finished stocks, which are too expensive, and towards semi finished and raw materials. Their aim is to release 30% working capital but accept longer lead times.

Planning-as-usual is dead. A new, dynamic planning paradigm is needed.

A senior F&B executive called for production planning processes and systems that empower the frontline planner with granular information and insights they can use to accelerate decision making. A UK-based co-manufacturer (coman) struggles to understand the impact of late customer changes on their operational effectiveness. Where a customer shouted loudly, they could force significant plan changes. With Replan, the coman will be able to immediately understand the impact of these changes on product availability and operational efficiency, empowering the supply chain team to know how to charge for late changes.

Responding to change quickly is critical. Starting from a good baseline plan is foundational.

To paraphrase an S&OP leader, despite the constantly changing business climate around us, if we don’t have a good plan to begin with, we don’t know if we will hit our goals. Across industries and regions, raw material availability continues to plague most manufacturers we work with. It heavily impacts their ability to make firm commitments to their customers on lead times. Better planning is enabling them to identify issues in the tactical horizon, and communicate changes quickly when they do occur.

Agility and intelligence need solutions.

A frazzled planner’s eyes lit up when we showed her how Replan’s solutions can reduce from days to minutes the amount of time taken to create a reliable baseline plan and run numerous what-if scenarios, by eliminating most of her spreadsheets and supercharging the rest with detailed capacity models and intelligent algorithms. One recent customer said that Replan takes 5 minutes to create a plan that used to take 2 days of manual planning.

Innovative planning systems are nice but fast and affordable are still important.

No one has the time, budget or people for long, expensive deployments. The people who would be responsible for getting new solutions implemented are the same ones who’re already challenged to keep the supply chain moving. Affordable, low-risk solutions that can be deployed in short bursts is part of the new normal!

View the original blog here.