What are your top three supply chain planning mantras?

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Mark Pearson of Logistics Management wrote an interesting article this month outlining “three of the most vital supply chain planning mantras”: 1. Supply chain planning works best as a high-level, enterprise-wide discipline. 2. Adaptability is key. 3. Speed matters. Would you add or change anything? One line from the article caught my eye –

“… by its very nature, forecasting is more or less imprecise—too many supply chain disruptions cannot be predicted. Instead, the business world’s increasing volatility means that companies should strive for highly flexible operating models, processes, and plans that help them respond rapidly to economic, political, and market-driven changes.”   

So is this a supply chain planning mantra, or a supply chain response mantra?  The lines are blurring aren’t they?

Discussions

Ron Freiberg
- January 22, 2010 at 12:39pm
It is interesting that this topic should come up for discussion at this time, I just developed our department's strategic plan that ties to the corporate objectives; I used my basic mantra as the back bone for our supply system going forward. I did use basic cornerstones if you will with a number of methodologies tied to them as follows, effectively in sequence of implementation.

1. Supply chain partnerships and collaboration:
-Use of supply agreements to state expectations and rules of the demand driven supply chain
-Use supplier/commodity group consolidation/optimization/rationalization methods
-Use partnership and team approach both internally and externally

2. Develop a demand driven system:
-Use the several forms of vendor managed inventory where possible
-Use Kan Ban type systems where possible
-Redefine forecast around the company's seasonality trends as opposed to being stated in
Financial time buckets, i.e. weekly/monthly/quarterly/fiscal year
-Update or reaffirm the demand forecast frequently with the partners

3. Develop flexible and agile supply systems:
-Use buffer inventories as a hedge against the unknown
-Develop long lead planning BOMs
-Use a shared responsibility concept for inventory with the business partners
-Update or reaffirm buffers and Long lead planning BOMs frequently consistent with
demand Forecast updates

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