Today’s supply chains are constantly changing, and leaders are being forced to reduce costs and increase efficiencies each step of the way. With the recent spike in demand volatility due to the pandemic, supply chain leaders see a clear need to accelerate their processes and increase their agility through improved demand planning and forecasting.

1. Streamline Your Supply Chain
Strategy Using These 3 Steps
ABERDEEN STRATEGY & RESEARCH

2. INTRODUCTION
Did you know that the supply chain of an organization impacts every single facet of
the business? However, today’s supply chains are constantly changing, and leaders
are being forced to reduce costs and increase efficiencies each step of the way.
With the recent spike in demand volatility due to the pandemic, supply chain
leaders see a clear need to accelerate their processes and increase their agility
through improved demand planning and forecasting.

3. INTRODUCTION… contd.
The organizations who are doing it right have robust planning, modeling, and
analytical processes in place, which gives them a significant performance
advantage over their competition. This article reviews the steps that those
successful organizations are taking to maximize their supply chain efficiency and
what you can do to start implementing these new strategies and technology within
your team today.

4. STEP 1: MAP OUT YOUR DEMAND PLAN & FORECAST
First, a supply chain strategy starts with a demand signal that’s based on some type
of forecast, projection, or actual order. To create a forecast, there are several
functions within an organization that are likely to be involved, such as sales account
managers, product managers, channel managers, demand planning function,
financial planners, and the forecasting process owner.

6. STEP 1: … contd.
The goal is to develop a consensus from multiple inputs and distill them into one
forecast for a given SKU. Making this happen repeatedly and on-time requires
strong internal collaboration, plus a tight analytical, disciplined process. Best-in-
Class companies — or the ones who have top systems and processes in place —
are 48% more likely to have a collaborative process in their forecasting process and
are 34% more likely to arrive at a single demand forecast based on multiple inputs
across the organization. Without mapping out a demand plan and forecast,
organizations simply won’ have a clear view into their supply chains.

7. STEP 2: CREATE A FEASIBLE OPERATIONS PLAN FOR
EXECUTION, BASED ON THE DEMAND PLAN
Next, the Sales and Operations Planning (S&OP) process, or Integrated Business
Planning (IBP) process, encompasses the demand planning function, and uses that
input for determining the execution plan. Best-in-Class companies are 74% more
likely to have an S&OP/IBP process in place according to the figure below.

9. STEP 2: … contd.
The fundamental baseline requirement of the process is to create a feasible
operations plan for execution based on the demand plan in a supply/demand
balancing process. Ideally, the demand exactly matches the available capacity, but
that is seldom the case. The supply/demand balancing process revolves around
determining “what it will take to meet the demand” — often referred to as an
unconstrained view of the plan — and “what can be supported with the existing
capacity and resources” — commonly referred to as the constrained view. The goal
is to achieve a feasible plan that can be executed. The outcome of the process will
often lead to adding capacity to meet the requirements, or conversely, looking for
some growth opportunities to better utilize the existing capacity, or it could be a
combination of both depending on the demand mix.

10. STEP 3: IMPLEMENT END-TO-END SUPPLY CHAIN
MODELING
Lastly, according to Aberdeen’s latest supply chain survey, approximately 18% of
companies have solutions that operate concurrently in their planning such that the
impact of any change can be seen immediately across the entire supply chain. For
that matter, Best-in-Class companies are 86% more likely to have an “end-to-end”
supply chain model for decision making. They are also 20% more likely to have the
planning system integrated into the financial planning and budgeting processes, so
that any out-of-tolerance conditions can be detected immediately in the form of an
exception alert.

11. KNOW MORE
https://www.aberdeen.com/featured/streamline-your-supply-chain-strategy-using-
these-3-steps/