Transforming Supply Chain Planning: How to create resilience, efficiency and agility
From February issue of NZ Manufacturer -Chris Foord, Partner, Argon, New Zealand Post Pandemic we are seeing an essential change in how businesses review their supply chain strategy with a focus on integration and forward-looking planning. Advanced Planning Systems (APS) are at the heart of digital transformation when looking to improve operations management. Companies in Australia and New Zealand have traditionally lagged in investment in this area. However, with the market maturing and good options available for small to large organisations, it is worth considering the opportunity. The benefits of implementation that we usually observe are: 20% reduction in working capital 3% reduction in COGS 6% reduction in Logistics costs 10-20% improvement in forecast accuracy Improved customer service What necessitated companies to modify their supply chain planning? The global pandemic has fundamentally altered the landscape of supply chain planning. Prior to the pandemic, supply chains were focused on creating efficiencies based on a just-in-time model, with inventories kept intentionally low. Businesses relied on backwards looking data to evaluate decisions, and adjusted plans on most recent events. However, the global pandemic caused businesses to reconsider this approach, with inventories now seen as a buffer to unexpected disruptions, leading companies to consider moving to a just-in-case model. The result has led to a recalibration of how businesses consider suppliers, capacity, and inventory, with the focus now centred on resilience, efficiency and agility through the supply chain. How are companies refining their strategies and approaches? The key change has been businesses embracing sales and operations planning (S&OP). S&OP is an integrated planning process that aligns demand, supply, and financial planning, and is managed as part of a company’s master planning. Rather than just a supply chain process, embracing S&OP results in planning coming to the forefront of the business as the business planning […]