Supply Chain Consultancy

Supply Chain Planning

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Supply Chain Planning
 
Well managed functions can operate in silos, but effective supply chains - the ones that begin to drive competitive advantage - think beyond these silos and plan across the business. This end-to-end planning is the 'glue' that holds an effective supply chain together.

Governed by a Sales & Operations Planning process, the supporting planning processes configure and manage the supply chain to meet cost, service and working capital objectives. Commercial sales and brand strategies are supported by customer and market insights to define a realistic demand plan. The demand plan is then translated into production and material requirements by managing risk through capacity and inventory to achieve the best cost-to-serve.

ASCC ensures that the supply chain planning processes are designed, integrated and managed to meet the supply chain strategy, supported by appropriate system functionality.
Supply Chain Planning
 
 

Sales and Operations Planning (S&OP)

S&OP is a collaborative business planning process that manages all tactical decision making across a business. It governs the supply and demand balancing process whilst highlighting gaps vs. company plans and developing actions to address them.

ASCC approach is to understand current performance, process maturity, business plans and key challenges to determine the key area of focus for S&OP. This may be aligned to a key deliverable such as working capital control or a value proposition e.g. customer responsiveness.

A 5-step monthly process is then implemented to develop, review and approve the business plan using product families to ensure attention at the right level:

New Activities Review, Demand Review, Supply Review, Pre-S&OP and S&OP approval. The S&OP cycle acts as a filter to understand key issues and develop recommendations allowing the board to focus on major decisions

 
 

Demand Management Forecasting and Promotions

ASCC's approach is to first understand the dynamics of the business' channels to market and the customer propositions in each. This is done from both the commercial and supply chain perspective. We would then aim to define and agree a single set of numbers and assumptions to base all business planning on, usually based on a INR value, as well as a translation to convert this into an output measure. This allows commercial and supply chain to speak in agreed terms.

ASCC would also drive the establishment of a demand planning team to understand the balance of promotions in terms of value to the business and capability to supply; this process then links into business wide S&OP. Building on the demand management process, we aim to understand the most appropriate technique for forecasting; this may be bottom up, SKU by SKU, or top down using product families. Key to both of these approaches is understanding and documenting the assumptions and measuring the forecast accuracy and ensuring that the single number generated as part of demand management flows through to operations in a transparent way.

 
 

NPD & NPI

The New Product Introduction (NPI) process ensures full product availability at the time of product launch and minimises inventory and waste. The successful introduction of new products is a critical process for many companies, particularly if they operate in dynamic marketplaces. Depending on the business strategy, leading, matching or closely following trends by the successful launch of new products is often a key part of business operations. Equally, failing to meet the timescales, costs or quality of new products can impact on the companies business profile with customers, it can damage profitability and lead to a loss in market share or penetration.

ASCC work with our clients to ensure that new product introduction procedures are aligned to the business and continuously reviewed and improved. We ensure NPI launches involve tight collaborative processes with supply chain partners and the process is managed as a cross-functional activity.

 
 

Production planning & scheduling

Production planning and scheduling balances supply against demand to optimise service and cost levels. Based upon the run strategy, the MPS is created to meet stock targets whilst optimising manufacturing cost wherever possible using a long-term view.

ASCC adopt a parameter-based planning approach to production planning allowing planners to focus on managing exceptions only. Planning horizons (frozen, firm, slushy) are developed to align with key control points such as material ordering, labour planning and material call-off. Balanced production plans are introduced which smooth demand spikes helping manage capacity, crewing and changeovers to achieve lower production costs. The production scheduling process takes then the weekly requirements and applies an optimal sequencing to minimise changeover losses. Any supporting schedules are developed through MRP subject to sequencing guidelines or Kanban control.

 
 

FG inventory management

Specifies the amount and location of finished goods inventory across the supply chain network. It controls the size of the buffer between demand and supply (either manufacturer or supplier). In addition to this it balances the main drivers for supply; service levels, physical and process lead times, demand & supply variability, economies of scale e.g. shipment frequency, minimum order size and working capital employed.

ASCC work with our clients to gain an understanding of the whole supply chain network, key drivers and constraints. We configure the planning systems focusing on: service & working capital employed - deliver the customer proposition with the minimum amount of inventory, cost of supply & Agility - minimise product cost without loading the supply chain with potentially redundant product, or generating extended lead times, speed to market & risk - enable rapid deployment of product innovation without compromising the ability to supply and challenge out of alignment elements and offer solutions to unlock supply chain constraints.

 
 

Materials inventory management

Inventory levels must be defined and controlled to ensure required material availability and appropriate inventory coverage whilst minimising obsolescence.

To avoid unnecessary inventory capital, ASCC adopt a scientific approach to determining item level inventory levels based upon replenishment frequency, demand variability, service level requirements and supplier reliability. Cycle counting processes are used to ensure material stock levels are accurate at an item location level and FIFO functionality maintains lot control. Stock available in the supply chain is viewed and measured regardless of whether it is at an internal location or with the supplier and is reviewed regularly to identify and manage slow moving and obsolete stock.

 
 

Run strategy & capacity

This process sets the overall strategy within which the Master Production Scheduling can take place. It is closely associated with inventory planning processes, since batch sizes and re-visit frequencies are directly related to cycle stock levels.

Using finished goods volume variability analysis, ASCC define appropriate replenishment models (e.g. rate-based, Kanban, make-to-stock or make-to-order) supported with pull or push based control mechanisms. Production run frequencies are optimised taking into account the trade-off between supply and inventory costs with fixed cycle planning for predictable products (regular slots) to enable a more exception based approach to supply planning. Rough Cut Capacity Planning in used for key resources over a 18-24 month timeline matching forecasted demand against planned capacity. Ongoing reviews ensure supply capacity and inventory are planned as cost effectively as possible as part of an overall risk management approach.

 
 

Materials planning & scheduling

The use of differentiated replenishment techniques and supporting parameters in planning material requirements drives reliable supply and appropriate material inventory levels.

ASCC analyse the true material demand (from finished goods) to understand the most appropriate replenishment model by item such as Kanban, capacity reservation or MRP. The focus is then to enhance supplier collaboration including increased visibility of forecast with delivery frequencies and quantities based upon the total cost of ownership. Where MRP is used, accurate parameter setting and review mechanisms are established to move material planning to a more exception based approach. Finally, call-off mechanisms are aligned to production requirements e.g. Kanban, VMI, schedules or discrete orders.

 
 

Distribution planning

Determines replenishment quantities to satisfy service level agreements whilst minimising total cost of supply. This is done through calculating appropriate replenishment quantities and timings which ensure customer service, and optimise production and logistics costs. On receipt of current stock level information and demand forecast data the DRP process uses the stock policy to calculate the required replenishment quantity to ensure the inventory policy parameters are satisfied. The replenishment quantity will be adjusted in light of the minimum and incremental replenishment quantities and offset by the lead-time to market to create a firm production requirement on the factories. The process will also generate supply chain exceptions where the min stock level is projected to be breached or where a projected out of stock could result due to manufacturing constraints. We work with our clients to determine optimal distribution planning processes for their businesses.

 
 

Planning system selection & implementation

This is the selection of an IT based system designed to automate planning processes followed by an implementation project. The implementation involves defining the business processes, configuring the systems, engaging and training staff and transitioning the business without adverse impact to customer service or the creation of obsolete inventory. ASCC ensures the business has a close definition of the current state planning processes to be supported, defines any changes or improvements to the planning processes required as a result of the implementation. In addition to this we support the systems selection based on three criteria; process (what processes are to be supported and what is the level of market sophistication), people (what is the level of planning sophistication and maturity to be supported), and technology (breadth and depth of functionality required and integration with existing systems). Implementations are managed using the ASCC project management based approach, breaking the change down into individual work streams managed through a central project office function.