Archive for Supply Chain Planning – Page 2

How Diageo’s Supply Chain Delivers Growth-Driving Innovation

Last month I wrote a Logistics Viewpoints article titled “A Maturity Model for Supply Chain Progression?” In this article, I contended that the World Economic Forum’s Global Competitiveness Index (CGI), which measures national economic competitiveness, can also serve as a maturity model for supply chain progression. The CGI framework outlines 12 pillars of competitiveness and categorizes economies into three progressive stages of economic development. The three stages are 1. Basic, Factor Driven; 2. Efficiency Enhancers; […]

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Visibility Drives Iterative Planning and Execution

Those who ignore history are doomed to repeat it. That applies to supply chain operations as well. If we don’t learn from what is happening day-by-day in our supply chains, we are doomed to repeat disconnected planning processes that lead to mismatches between supply and demand. These mismatches are costly and can lead to service problems such as out-of-stocks and over-stocks. But with fires to fight every day it’s hard for supply chain managers to […]

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Matching Demand Forecast Periods to Production Lead Times

It is common to speak of a “one number” demand forecast. And a “one number” forecast works fine if your demand forecast and your manufacturing planning are based on the same time period. For example, if you do a monthly forecast and the plant uses it to plan production for the entire month, then there is no inconsistency. But a lot can happen in a month. I was briefed a while back by Nitin Goyal, […]

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S&OP is Not About Technology. Wrong!

At the IE Group’s Sales & Operations Planning (S&OP) Innovation Summit last month, several of the speakers, including some representing software vendors, said that people and process were far more important than technology in achieving S&OP excellence. But interestingly, the companies profiled in the case studies as having the most robust and mature S&OP processes all used advanced Supply Chain Planning tools.  I don’t disagree that managing culture change is the biggest challenge associated with […]

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The Unbiased Forecast

I’ve been interviewing supply chain executives at consumer goods manufacturers to learn how they are using downstream data. A key focus area for these executives is using this data to improve the accuracy of their demand forecasts. A couple of the executives I interviewed raised an interesting point about forecasting that I don’t remember coming across before: the importance of having an unbiased forecast. Forecasts, by their very nature, are rarely completely accurate. Historically, most […]

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The Semiconductor Industry Struggles with Forecasting

Achieving robust forecasts is very difficult, if not impossible, in some industries. This is particularly true for companies in the semiconductor industry, which is very volatile because of its speed of innovation. Moore’s Law describes a long-term trend in the history of computing hardware, in which the number of transistors that can be placed inexpensively on an integrated circuit has doubled approximately every two years (equivalent to about 30 percent cost reductions per year). This […]

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Integrating Strategic and Supply Chain Planning at Emerson

I am doing some research on “Supply Chain Management in Times of Turbulence” and one of my premises is that firms with a robust strategic planning process are better equipped to deal with large, unexpected events, like the current global recession.  What does a robust strategic planning process look like?  How does strategic planning integrate with supply chain planning processes?   In an attempt to answer these questions, I called my contacts at Emerson Process Management, […]

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A Supply Chain Problem I’d Like to Have

I recently wrote a piece called “The Reset Economy” where I argued that for various macroeconomic reasons demand may not bounce all the way back after the recession ends.  Consequently, there will be too much capacity in many industries.  I believe this is the biggest supply chain problem many companies will confront over the next few years.  However, in certain industries, demand will always be hard to meet for certain “hot” products, a problem many […]

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Advanced IBP Leads to Better Service and Profitability

The desire to improve service is the main reason many companies are investing in information technology (IT).  Achieving this goal is very difficult without a robust Integrated Business Planning (IBP) process, formerly known as Sales & Operations Planning.  The goal of sales and operations planning is to achieve high service levels by effectively balancing demand with supply.  This requires both internal and external collaboration.  Internally, at a minimum, the manufacturing, demand planning, and sales and […]

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New Distribution Optimization Software Solutions

I recently completed a study of the Supply Chain Planning (SCP)software market.  In doing this study, I came across solutions that could not be cleanly classified as either Supply Chain Planning or Supply Chain Execution.  First, a quick background on supply chain planning and execution solutions.  SCP solutions are typically based on optimization algorithms.  I will spare you a detailed definition of optimization (it might make your eyes glaze over), but in the simplest terms, […]

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