Formal planning can help supply chain management


supply chain planningVisibility and collaboration are valuable commodities to modern supply chain managers. With the rise of agile and powerful B2B integration, manufacturers, suppliers and retailers can be closer than ever before, sharing real-time data with extreme clarity.

There are many ways to promote further visibility and success in supply chain management. According to APQC analyst Becky Partida, writing for Industry Week, one especially important type of strategy for manufacturers is the sales and operations planning. Firms have a long way to go, according to Partida, to maximize the potential of planning to change their business outlook.

New planning procedures

Partida stated that her company's recent industry benchmarking report found all of the key processes in sales and operations planning are being underused. While 82 percent of companies have some organizational structure supporting their planning operations, Partida stated that each individual process within the general area showed weak adoption.

According to Partida, companies were asked to rate their use of the sub areas within sales and operations planning. The most popular, on a scale of 1 to 5, was formal meetings between departments, which scored 3.9. This number was worrying to Partida, as she said meetings are the key component for planning purposes. Numbers were far lower for manufacturer collaboration with their customers. Partida stated that the value in adopting this strategy comes from strong anticipation of shifts in market forces, enabled by a broadening in perspective.

Inventory, according to Partida, is one area that could be improved through more external collaboration. Supply chains at organizations in contact with their buyers save significant amounts of money on their storage costs for excess inventory, according to the APQC benchmarking data.

Extra challenges

Manufacturers of certain products may be especially eager to save money through improved collaboration, as external forces have weakened their core processes and market position. A recent Smith Institute study found such a situation in the U.K., where a lack of support from the financial sector could be having severe consequences on supply chain processes.

The poll, taken among automakers, found companies eager for more support from banks but encountering general confusion about their needs. The current evaluation process for assets, according to the source, has led to manufacturers failing to receive funding. While relationships between automakers and the finance sector remain weak, there will be extra challenges. Companies with efficient and visible processes could be the best-equipped to resist them.