Manufacturing companies often realize that the raw material or packing items stay unconsumed for several weeks. Such materials are ordered and inventoried after having borrowed money from banks and other sources, at rates of interest equivalent to 12-15 % per annum. Locked funds and the interest thus accrued due to unused inventories can have a...
Shop floor operations are complex. Planning with variables like demand, various capacities, run rate, product mix, lead times, material constraints, etc. is not a very easy job. Throw in the element of human behavior and the complexity hits the roof. It is therefore extremely tough to do any type of root cause analysis for poor...
One of the favorite questions of Supply Chain interviewers for the ‘often-nervous’ interviewees is “How do you choose a forecasting method for an FMCG company or a Cement company?” Most interviewees babble about errors (calculated statistically assuming a stable universe!) and dashboards. To be honest, this is a question that has befuddled most of...
Advanced Planning Systems (APS) score well above the ERP systems in the way those make the Supply Chain Planning processes automated, faster, responsive and cost-effective. Such APSs can be extremely costly and time-consuming. Some of the well-received APS are offered by SAP, Oracle, Manhattan, RedPrairie, Infor, and JDA Software. The CIOs are advised to muse...
Excel is the preferred tool for most of the supply chain planners. This is because of the flexibility and ease of use that excels offers and planning being a very dynamic area, most of the planners don’t want to get confined to the limitations of the tool. Moreover, simple activities like data manipulation and data...
A common problem for large process-based manufacturing organizations with geographically wide distribution is the need to rationalize the economy of scale in production with a large and complex supply chain network. There is a trade-off between the economy of scale achieved through increased production at a more distant site versus additional transportation costs involved. Most...
Most of the warehouses face issues in managing inbound and outbound logistics at their warehouses resulting in huge delays in operations. Problems like allocation of docks to inbound and outbound trucks, capacity constraints of docks, and material handling equipment, loading and unloading of trucks, scheduling trucks based on the demand and dock availability, material availability...
Demand planning across an organization requires marshalling a wide range of data like historical sales data, promotions data and data for cause and effect analysis. In order to make the forecast realistic and practical, planners tweak the forecast numbers with their judgemental forecast. Most of this data resides in spreadsheets and therefore building a consensus...
Honest Abe was the Supply Chain head of an F&B company. He was hard working, sincere and capable. However after putting his best efforts, there were regular complaints of stock-outs from his Distributors. Despite the fact that his warehousing bills from his 3PLs have ballooned in the past couple of years and his inventory write-offs...
Lean thinking etched the concept of ‘PULL’ in the mind of supply chain professionals which in-turn popularized the concept of sales based Replenishment Planning. Don’t try to forecast sales. Hold inventory for the replenishment lead time and just replenish what was sold. Sales are what actual customer pull is. Replenishment planning proposed to take out...