Top Tips For Supply Chain Demand Planning & Ops
by: Jeff Rosen, JSRosen Consulting
Supply chain demand planning (S&OPs) consists of integrated business management processes that companies use to control supply chain and operations to enable rapid, sustainable growth. Today’ s supply chain planning targets supply chain design and development, lowest landed cost modeling and execution, offshore implementation, contract manufacturing partner selection and negotiation, and the manufacturing ramp to volume. Business processes that support supply chain operations include but are not limited to Information technology strategy and implementation, supply demand planning, order-to-cash optimization and procure-to-pay simplification.
Jeff Rosen of JSRosen Consulting offers the following top tips for companies implementing supply chain demand planning and operations:
TIP 1: It’s never too early for S&OPs
Many companies wait until they are well into volume sales to implement a supply chain demand planning process. Their rationale: “S&OPs is easy to manage in early stages”.
In fact, there are many benefits of S&OPs. Initially S&OPs establishes collaborative forecasts and build plans. Sales, Operations and Finance are often siloed departments in small companies. With early collaboration and interaction through S&OPs, it sets the stage for future best practices and further collaboration in solving more complex challenges to come.
TIP 2: S&OPs are needed even for an early stage company
How much process is too much process for a rapidly growing company? The two biggest assets for most early stage companies are cash and engineering. You optimize these assets by putting in place scalable but rationale processes. S&OPs are a good place to start. Filter other processes through your S&OPs processes to measure what is necessary, without binding a company’s ability to be nimble and agile.
TIP 3: Define roles and responsibilities, and communicate often
Leaders think that people know their roles and job scope. Usually that is usually far from true. Additionally, no one else knows what others do as well. This confusion leads to faulty hand-offs, dropped balls and lack of accountability. Roles and responsibilities don’t imply fixed or restrictive boundaries. Rather, they are guidelines to help organizations be more efficient and effective. This is especially important to organizations when new people come onboard or existing people depart.
TIP 4: “Sell” all your suppliers on your company’s opportunity
Take your company’s marketing and sales pitch and configure it to a vendor-facing presentation. Use this to show where the company is focused, the technologies in which it is playing, its target markets, and a demand ramp curve. Then define what the opportunity is for the vendor you are meeting with at that moment. Keep this pitch on you at all times. Selling occurs in both directions between the OEM and the supplier, especially for young, emerging companies who may not have a ton of press.
TIP 5: Stay connected to your key component vendors, not just your contract manufacturer
Companies tend to focus on building a supply chain partnership with their contract manufacturer. While doing that, you can become less present and connected to your key component vendors. When contract manufacturers place the purchase orders, you have less and less interaction with your component supply chain. This impedes direct efforts to reduce cost, time to market and lead time. Be regularly in front of your key component vendors. The payoff will be significant.