Overwhelmed by the dark forces of supply chain planning?
The best supply chain planners share a common trait with Jedi knights: No matter how tough things get, they never give up.
So how do they overcome a supply chain’s darkest force: complexity?
Here’s what they don’t do: Assign different parts of their planning challenge to different departments. Why? This rarely works. It’s difficult to make decisions in real time when one planner doesn’t know what the planner in another department is doing. It’s a trap. Fall into it, you mustn’t.
To join the ranks of fearless supply chain planners, you need more than a lightsaber and capable sidekick. Start with these 7 actionable tips:
Make sure you can see what’s happening – all the time
You may not be up against an army of Stormtroopers but the slightest crack along your supply chain is an opportunity for your competitors to swoop in and steal market share. Spreadsheet-based planning – and even certain sophisticated planning tools – can fail to give you the visibility you need to check the accuracy of your plans. Stick to tools that provide end-to-end visibility into your production processes and immediate insight into the causes of delayed orders. When you know what’s coming, you’re uniquely positioned to profit from it.
Get the most out of your resources
Optimization is about making sure that you’re utilizing your resources in the most effective manner, without compromising rules and KPIs. For example, is your safety stock at the right level or is it leading to unnecessary costs? Can you reduce the idle time of your workforce to improve productivity without violating labor rules? Note: Astromech droids are not a shortcut. Only use them when absolutely necessary like when you’re stuck in a garbage compactor with the walls closing in.
Plan for all possible outcomes
What if your ship requires an urgent part replacement to reactivate the hyperdrive – do you have backup suppliers? What if a manufacturer has to stop operations for a day because their machinery broke down – do you have enough safety stock to last until operations resume? Your supply chain needs several contingency plans that can be put into place when something unexpectedly goes wrong. Rescuing a princess is not one of them but it’s always good to be prepared.
Master the art of scenario planning
A common mistake is to merge an organization’s long-term strategic plan with its monthly S&OP plan. This may sound appealing, but in reality, all-encompassing scenarios complicate scenario planning while adding no value. The bottom line? Don’t squeeze all your data into one big scenario. Use different scopes, with different levels of detail, for different planning horizons.
Upgrade your demand forecasting skills
Even Master Yoda could not see the exact future. So what’s the best way to improve demand planning and forecasting? Improve collaboration internally. This means that creating forecasts and promotional and pricing plans must be integrated with functions including distribution, operations planning, and manufacturing. Take a 5-minute crash course in becoming a demand forecasting expert.
What do you do when your ship gets pulled into the enemy base? Sit and wait to be captured or disguise yourself as a Stormtrooper transporting a sidekick-turned-prisoner? While contingency plans can save you from total disaster, agility is the flexibility and speed at which your supply chain can adapt to changes. The way your decisions flow through the supply chain needs to be fast and accurate, so that you can immediately respond to market changes and customer demands. Your supply chain needs to be flexible enough to be able to implement the changes. Good decisions are crucial, but agility is key to staying ahead of the game.
Break common planning rules
If the Rebellion had followed common planning rules, they may never have won the war against the Republic. When it comes to supply chain and logistics planning, there are many rules-of-thumb that you may follow. But do you know when your practices are actually driving up – rather than cutting – costs? What sounds good in theory may in fact be costing you time and money. Explore and embrace new ways of planning to achieve your business goals.
Sometimes you just know – in the blink of an eye – what action to take. That’s thanks to your years of experience in planning and operations. And sometimes, you need help to make the right decision. Be armed with the best insights to defeat supply chain complexity. May the Force be with you.