Planning & Control

Align schedules, material requirements and inventories with demand

We focus on Demand Driven planning techniques (summarised in the graphic below and in partnership with the Demand Driven Institute). However we can assist in any type of supply network planning and control hierarchy. We are careful not to represent any software companies.

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S&OP and Forecasting
We can influence your planning and forecasting tools for better supply chain performance.

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Buffer Positioning
Where will the different buffers (inventory, capacity & time) be positioned to deliver customer expectations?

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Inventory Buffer Sizing
How will the inventory buffers be sized?

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Capacity & Time Buffer Sizing
How will the time and capacity buffers be sized?

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Supply Chain Scheduling
How will the supply chain be executed for maximum performance?

S&OP and Forecasting

We leave the design of S&OP management processes and sophisticated forecasting systems to other best-of-breed consultants like The Oliver Wight Company. 

We focus on ensuring that operations can lead the development of demand driven pull systems via the S&OP process. We help our clients to identify SKU’s which should stay with demand forecasts and which items would be better served by a pull system driven by actual demand. This is done in parallel to developing a comprehensive buffer strategy (shown below).

Buffer Positioning

The creative design and positioning of buffers and control points is vital to an effective supply chain strategy. Statistical tricks such as variability pooling can be used to minimise the chances of problems caused by the well known bullwhip effect.

The following factors need to be taken into account when deciding where to position buffers;

Inventory Buffer Positioning Factors

Customer Tolerance TimeThe amount of time customers are willing to wait for the delivery of a product.
Market Potential Lead TimeThe lead time that will allow an increase of price or the capture of additional business.
Demand VariabilityThe swings and spikes in demand.
Supply VariabilityThe potential for the severity of disruptions in sources of supply and/or specific suppliers
Inventory Leverage & FlexibilityPlaces in a BOM or the distribution network that leave the company with the best lead time compression to meet the business needs.

Time and Capacity Buffer Positioning Factors

Customer Tolerance TimeThe amount of time potential customers are willing to wait for the delivery of a product. In the case of time and capacity buffers this is the backorder time.
Cycle FrequencyThe current performance characterics of the supplier for a product and therefore its minmum order size and remake time.
Latent CapacityMost cost effective combination of efficiency, labour, equipment utilisation and WIP that delivers the capacity required for supply chain responsivness
Critical Operation ProtectionBest way to protect the critical operation (the Drum) in the supply chain from stoppages.

Inventory Buffer Sizing

Inventory buffers are used to manage Make-To-Stock products and materials. Time buffers and capacity buffers are used to manage Make-To-Order products and materials.

Inventory buffers are used to absorb demand and supply variation for those finished goods, raw materials and parts that have a high average demand relative to the optimum replenishment quantity.

The intention of an inventory buffer is to decouple the downstream customer or process from upstream leadtimes and variability. We can size inventory buffers using;

  1. The Lean approach to inventory buffer sizing.
  2. The Demand Driven approach to inventory buffer sizing.

Capacity & Time Buffer Sizing

Make signals to the factory may arrive as a replenishment signal from a strategic inventory buffer (Make-To-Stock) or as a pure order from a customer (Make-To-Order) depending on the supply chain strategy.

Time and capacity buffers are used to manage Make To Order (or Deliver To Order) materials and absorb demand and supply variation for finished goods, raw materials and parts that have much slower average demand relative to the optimum replenishment quantity. They may also be used for high cost materials where the risk, and costs, of obsolescence are high.

Time and capacity buffers are also used in factories to control factory performance (see this article for more information).

Supply Chain Scheduling

We can help to develop supply chain scheduling strategies for your most complex supply chains;

Finished Goods - Strategic Inventory (Make-To-Stock) Management

We can deal with your existing ERP/MRP system to set up more traditional safety stock system.

We can also set up a more contemporary multi-echelon materials and inventory planning and execution solution using demand driven de-coupling points throughout your network.

Finished Goods - Lead Time (Make-To-Order) Synchronisation

We can design a leadtime synchronisation system that works in parallel with your strategic inventory scheduling system.

Inbound Materials - (Deliver-To-Stock & Deliver-To-Order) Scheduling

We can use Strategic Inventory and Lead Time synchronisation techniques (described above) to control your inbound materials. We do this by creating a Plan For Every Part (PFEP), taking into account the unique commercial needs of each material such as consignment stocks, supplier risk, suppler distance and supply seasonality.