Supply chain management without an operational forecast – is it possible?
Yes. Yes it is. At least if you’re one of the world’s largest providers of railcar services and products. TrinityRail, part of Trinity Industries, Inc., ditched operational forecasting in favor of a sense and respond supply chain, and the results speak for themselves. As outlined in a recent Kinaxis case study, TrinityRail was able to realize sizable improvements in its supply chain, including nearly removing its reliance on Excel for planning and dramatically reducing the need for manual data transfers. Using supply chain management software that connected its data, processes and people into a single, harmonized system, TrinityRail reduced the risk of error, since everyone was using the same, up-to-date data set. It was even able to reduce its days of inventory on-hand (DIOH) by an average of 12 days and reduce its buyer team by more than 25% while still improving the on-time delivery (OTD) of inbound materials.
Dealing with a complex, make-to-order environment
“Rather than trying to get better at forecasting, we decided just to figure out how to live without one [a forecast],” explained Mike Hegedus, Vice President Supply Chain Management, Trinity Industries, in the case study. That bold decision came on the heels of a supply chain transformation project that highlighted how simulation was the better goal than optimization for their unique supply chain. TrinityRail needed to have the available capacity to meet lead-time demands on products with a 30 to 50 year lifecycle and a two to three year backlog at any given time. It’s increasingly complex manufacturing environment—every freight railcar is configured to unique customer specifications—made accurately forecasting demand a near impossible feat. TrinityRail used rapid scenario simulations, robust exception management, enhanced visibility and collaborative planning to remove operational forecasting and change the very culture of how the company works. Now TrinityRail works by focusing on action, not anticipation, and has discovered how to operate “on the edge of control” without sacrificing results. Want to learn more on how TrinityRail ditched its operational forecast and developed a more robust sense and respond supply chain as a result? Check out the full case study, Where’s the easy button? Enabling a Sense and Respond Supply Chain.