Hi
In today’s world economic Demand Management Solution should try to cover the following functionality, let me know if we need to add anything more:
- Synchronize global planning
- Forecast only the products and components that make sense from a profit and/or strategic perspective
- Utilize best-of-breed statistical forecasting techniques
- Employ a forecasting tool that balances performance and scalability
- Apply event-based planning
- Perform real time data synchronization
- Employ rules-based modeling
- Simplify multidimensional analysis with easy-to-use tools
- Afford a seamless workflow
- Benefit from an open, services-based, 64-bit architecture and a common Web interface
- Utilize industry-standard databases
- Employ automated, closed-loop, industry-specific workflows based on best practices
- Gather predictive intelligence with “proactive” demand indicators
- Enable more efficient collaboration with all internal stakeholders and external partners.
Tags: Demand, Forecasting, Pain point, Solution
Hi
Yesterday had a interesting discussion on the supply chain initiatives, have listed the few on what felt was important for the moment-
• Re-Design Your Warehouse Network, Add Regional Warehouses and
• Save Transportation Costs
• Compete on Service, Fend Off Price Concessions
• Re-Bid Your Freight Spend, Deepen Your Routing Guides
• Invest in Non-Transportation Resources–Inventory, Labor, Technology,
• Time-That Offset Transportation Cost
• Fill Orders Flexibly
• Change Inventory Management Logic-Set Safety Stocks and Order
• Quantities Differently
• Accelerate Your Forecasts to Catch-up with Decreased Demand
• Re-Engineer Packaging
• Shift to More Productive Transportation Modes–Expedited to Normal,
• Parcel to LTL, LTL To TL, TL To Rail, and Air to Ground
• Design Supply Chains and Position Products Around Green
• Sustainability
Tags: Drive, Initiatives, Supply Chain
People keep asking me which project to focus in the supply chain business function in the current economic tough times.
My belief is that this is the wrong attitude and no matter how backward and tightfisted senior management and finance group are, if you can identify for them in straight forward terms a specific and achievable logistics & supply chain project with real benefits there may be light at the end of the tunnel.
The question then becomes which project should I examine and propose? Here are few areas to look into:
1. Strategic Network Modeling
2. Operational Benchmarking
3. Inventory Optimization
4. Spend Analysis
5. Supply Chain Visibility
6. Score carding
7. Global Data Synchronization
8. Supply Chain Network Collaboration
9. RFID Technology Process Improvement
10. Carbon Footprint Modeling & Reduction
Tags: CSCM, ISCEA, Project, Students, Supply Chain
Hi
Today am writing about Sales And Operational Planning as requested by my friends.
Sales and operations planning (S&OP), sometimes known as aggregate planning, is a process where executive level management regularly meets and reviews projections for demand, supply and the resulting financial impact. S&OP is a decision making process that makes certain that tactical plans in every business area are in line with the overall view of the company’s business plan. The overall result of the S&OP process is that a single operating plan is created that identifies the allocation of company resources, including time, money and employees.
Tactical Planning
Whereas strategic planning looks at the company’s plan years into the future, tactical plans look at the company’s business plan over the coming year. Tactical plans take into account overall strategies of the company, which are found in the strategic plan. Sales and operations planning are aimed to helping to provide companies develop and align the tactical plans developed by the various business areas. There are two approaches that are used in sales and operations planning; top-down planning and bottom-up planning.
Top-Down Planning
Top-down planning is the simplest approach to sales and operations planning. In this approach, there is a single sales forecast that drives the planning process. The forecast is derived from a combination of products and services that require similar resources, for example, a number of manufactured finished products. Using top-down planning, the management can create tactical plans based on the overall forecast and divide the resources across the finished foods in the plan.
Bottom-Up Planning
This approach is used by companies that do not have a stable manufacturing schedule and the number and type of finished goods can change from month to month. In this scenario the sales forecast is not helpful for resource planning. The management need to calculate the resources for each of the products and then amalgamate the resources to get an overall picture of resource requirements.
Production Plans
After a company has worked through their sales forecasts and calculated the resource requirements, the various alternate production plans should be generated. There are three approaches that are used for the production plan; level, chased and mixed.
The level production plan is used where the cost of making a change in the production level is extremely expensive, while the cost of holding inventory is very low, for example in the oil industry. Using the level production plan, the production remains constant and inventory is used to absorb the differences between the sales forecast and the production.
The chase production plan is the opposite of the level production plan. In this production plan the production is changed for each time interval of the plan to match the sales forecast for that interval. With this approach the production is always chasing the demand, hence the name chase production plan. This approach is best used for companies who either cannot hold inventory or to do so is extremely expensive, while changes in production costs very little.
The mixed production plan takes elements from both the chase and level plans, where there will be variances in production and inventory levels which will produce the best production plan.
Tags: Operation Planning, Planning, S&OP, Sales Planning
In this Blog, I will be giving an introduction on what is Oracle Projects module in the Oracle Apps Ebiz Suite.
Oracle Projects is suite of modules which combines
Project Costing
Project Billing
Project Foundation
Project Management
Project Resource Management
and Project Portfolio Management
Oracle Projects is very useful for any Project Based Organizations. In today’s world I can say all the organizations are based on Projects for ease of maintenance and tracking.
What is Project Costing ?
To put it in a simpler manner, module to calculate the cost and account it. In any organization there should be an application which keeps track of the costs of the projects and categorize the costs. I can say Project Costing is similar to one of the applications, but not limited to calculating and accounting. I will explain in detail in the coming posts, how cost is calculated and accounted in Oracle Projects Costing.
What is Project Billing ?
Lets take an example of Services Company. Any Services company has customers whom they serve and inturn bill the clients for the service offered. In such scenarios Project Billing is handful in billing the customer. Not only that you can calculate revenue for the projects, which is very important. In detail explanation will be in my future posts.
What is Project Foundation ? Project Foundation provides the basic infrastructure and components for the Costing and Billing to work. So what it means ? For Costing and Billing to work we need basic infrastructure /components like Projects, Tasks, WBS(Work Break Down Structure) etc, Cost Rate Schedules, Bill Rate Schedules.These structures are created using Project Foundation APIs and hence the name ‘Foundation’.
What is Project Management ?
Offcourse the name itself explains that it is to manage the projects. The functions involve Project Tracking, Performance Tracking and other standard project management functions.
What is Project Resource Management ?
This is for manging the resources of the project. Functions involve assigning resources, moving resources /deallocating resources, competency management , creation of vacancies, advertising the vacancies, evaluating the skills of the resources etc.
For more info: see the Oracle Projects Fundamentals User guide.
Hi
Planner needs to chose the right type of forecasting technique based his company’s needs or have system which takes best of all.
• Judgment methods: A type of qualitative method that translates the opinions of managers, expert opinions, consumer surveys, and sales force estimates into quantitative estimates.
• Causal methods: A type of quantitative method that uses historical data on independent variables, such as promotional campaigns, economic conditions, and competitors’ actions, to predict demand.
• Time-series analysis: A statistical approach that relies heavily on historical demand data to project the future size of demand and recognizes trends and seasonal patterns.
• Collaborative planning, forecasting, and replenishment (CPFR): A nine-step process for value-chain management that allows a manufacturer and its customers to collaborate on making the forecast by using the Internet.
Tags: Forecasting Technique
Retailers face several challenges when it comes to forecasting:
• Scale of the problem (large number of stores and items to forecast).
• Intermittent demand (slow and erratic sales for many items at the store level).
• Assortment instability (frequent new-item introductions and seasonal assortment changes).
• Pricing and promotional activity.
Given these challenges, it is important to recognize where forecasting can enable better retail processes, and where forecasting alone will not solve the business problem.
Large-scale automated forecasting
The objective in any business is to have the right product in the right place at the right time – and in the appropriate quantity. Achieving this objective can be a significant challenge for retailers because of the sheer number of items they carry and the number of stores where the items are stocked. A large retailer may have tens of millions of store/item combinations.
Given this situation, it is clearly impractical to attempt to manually forecast demand for each item at each store. It would not be economically feasible to employ the hundreds (or thousands) of demand analysts necessary to manage each forecast individually. Fortunately, it is neither necessary nor advisable to manually create or intervene in each forecast at the store/item level. Large-scale automated forecasting software can address this problem. In most situations a quality forecast can be created with little or no human involvement. This automation minimizes staffing requirements, while permitting forecasters to focus on the “high value” forecasts that have the greatest impact on customer satisfaction and financial performance.
Forecasting and revenue optimization
Revenue optimization systems help the retail planner make better decisions on regular product pricing, promotional activity and markdown pricing. Such systems are designed to optimize an objective (e.g., maximize revenue, maximize margin or minimize inventory). They succeed to the extent that they drive actions that improve financial results.
Optimization decisions are based, to a large extent, on the forecasted impact of various possible scenarios. For example, to determine whether it is better to price an item at $1.99 or $1.79, these systems must estimate the sales of product at these price points. These “forecasts” might be based on prior sales history for this item at various price points, or based on the pooled history of other items that have incurred price changes.
Forecasting and replenishment
Retailers want to grow sales, realize profits and satisfy customers. This means having stores (and warehouses) sufficiently stocked to meet customer demand, but not so overstocked that excessive capital is tied up in inventory or that significant season-end markdowns may be necessary.
Store-level stockouts have many possible causes. A poor forecast of demand (resulting in the item selling out) is one possibility, but there are others:
• Poor replenishment policy (failure to account for demand variability, supply variability, forecast error, etc. in making inventory plans).
• Poor replenishment practice (failure to properly execute inventory plans).
• Shrinkage (loss of sellable inventory due to theft, damage or misplacement).
A good replenishment policy takes into account the uncertainties of supply and demand, and makes store-level inventory less dependent on a highly accurate forecast. Accurate forecasting at the store/item level is inherently difficult due to the amount of volatility and randomness in demand at this level of granularity. Sporadic or intermittent demand can also be a major problem, as illustrated by one “top 40″ retailer that reported sales of less than one unit per week for half of its 30 million store/item combinations. Pooling demand across stores and generating forecasts at a region or warehouse level can help solve this problem. Forecasts will be more accurate at the aggregated level, and attention can be focused on maintaining the appropriate level of inventory at the warehouse. Good replenishment policy and execution will allow stores to maintain appropriate stock levels, without overdependence on store- or item-specific forecasts.
Forecastability of retail demand
Forecasts will never be perfect, and sometimes they may not even be very good. The goal of forecasting in retail should not be a foolish pursuit of perfection, but to generate forecasts that are as accurate and unbiased as we can reasonably expect them to be, and to do this as efficiently as possible. Large-scale automation helps solve the problem of generating forecasts at granular levels of detail (such as store, item or week). However, there must still be a realistic assessment of the likely accuracy of forecasts at that level, and consideration of other strategies that can be used in conjunction with forecasting to best solve the business problem.
Tags: Demand Forecasting, retai
From CSR International: “A new report from BPM Forum and E2open covers the priorities, progress and pitfalls that supply chain and finance executives are facing in product development environments. The report also provides perspectives from more than 20 corporate and faculty leadership committee members, which includes best practices for implementing environmental sustainability into their supply chains.”
Key findings
• Nearly two-thirds of supply chain and operations professionals say they have marginal or no visibility across all tiers and levels of their value chain.
• However, 90% say their management subscribes to enhanced trading partner visibility, flexibility and sustainability across the entire supply and demand chain.
• 78% of companies rate the level of synergy and accountability in their global trading network as suboptimal.
• The top benefits achieved through better ECO-Operation, or optimal visibility, programs include more environmental responsibility, better sustainability compliance, more efficient product manufacturing and better customer responsiveness.
• Lack of leadership, visibility and standardized sustainability metrics are holding companies back from achieving bottom line benefits.
• 42% of companies do not include supply chain partners as part of the carbon and energy footprint.
• 76% said their customers have not yet asked them to reveal their carbon footprint, but two-thirds expect customers to demand this in the next year.
• More than half of respondents say that their competitors use green or ECO-Operation practices for competitive advantage.
• 85% of respondents say they are actively involved in new programs that drive operational efficiency, corporate social responsibility and cost-savings across supply and demand chains.
• Sustainability is becoming an increasingly important consideration to supply chain management executives, although most companies are still struggling with obtaining verifiable, consistent data to measure value chain effectiveness and environmental responsibility.
Author
BPM, E2open
http://www.csrinternational.org/?p=2841
Hi
As was discussing with my friends on the Warehouse challenges and to find the right product/solution to support the same:
Following were the challenges coming to our mind, apart from the regular ones which we have always:
1) Customer Services
a. Customer Services Challenges
b. Supply Chain Compliances needs
2) Operations
a. Poor Inventory Visibility
b. High Overall inventory levels, high carrying costs
c. High Obsolesce and write-offs
3) Rising Costs
a. Fuel and energy prices
b. Qualified Labor Cost and availability
4) Flexibility
a. High Integration expenses for existing WMS (legacy/3rd party)
b. Business process flexibility
Regards
Mihir Jhaveri, PMP, CSCM
Senior Manager
mihirjhaveri@hotmail.com
www.mihirjhaveri.com
Tags: Warehouse, Warehousing Challenges
CII Institute of Logistics - A Centre of Excellence established by Confederation of Indian Industry(CII) is organizing in association with IBM “The Smarter Supply Chain of the Future” - A Round Table Conference on Supply Chain Optimisation and Excellence on 30th of November 2009 at Hotel Intercontinental , Mumbai between 09:30 hrs and 13:30 hrs with a luncheon.
Conventional Supply Chain strategies are becoming immense constraints in today’s dynamic and volatile business environment. The complexities of compliance mandates, supplier and information flow is becoming more costly and making organizations more vulnerable.
It is not that companies are ignoring the issues. But in today’s circumstance, it is not enough to build supply chains that are only efficient, demand-driven or even transparent. They also need to be smarter to address requirement of current times and of the future.
Objectives:
• To make supply chain more resilient
• To build more visibility in the supply chain
• To manage risks more efficiently
• To control costs better
• To enhance customer intimacy
This Round Table conference will discuss these challenges in light to current and future times and try to find solutions. This conference will also provide opportunity to Supply Chain leaders from organizations to interact among each other.
Regards
Mihir Jhaveri, PMP, CSCM
mihirjhaveri@hotmail.com
