Effective supply chain management in the internet-driven 21st century requires a healthy balance of sophisticated analytical techniques as well as tried-and-true business process and governance approaches. Important decisions need to be made by people with a solid understanding of the business context, but they must be supported by unemotional, data-driven analysis.
The team at End-to-End Analytics understands this need for balance. We can apply the most sophisticated algorithms when needed. But we also know when enough is enough – when, for example, the situation calls for less rigorous techniques but more thorough examination of alternative scenarios.
On the process side, our team members have lived the problems faced by our clients. We know what works and what doesn’t, as well as the pitfalls to avoid. We understand how the right metrics are critical for success. But we also appreciate the perils of overkill.
Pulling these skills together, we work with our supply chain clients on a host of business challenges, including:
The theory behind inventory optimization has been stable for fifty years. Commercial applications have put that theory at our fingertips for almost as long. Nonetheless, the adoption rate of inventory optimization software remains remarkably low.
Trouble is, one size does not fit all. Yet that’s how the inventory optimization software often gets deployed. Many real-world situations sport important differences that violate key assumptions of the formula being applied, jeopardizing results. No single formulation will be right under all circumstances.
At End-to-End Analytics we address those key assumptions, ensuring that the math fits the problem. We also provide a robust exception management framework for those situations where sound human judgement will outperform any math. Our approach enables you to:
Create the rich demand and forecast accuracy profiles necessary to guide your inventory strategy.
Identify the business requirements and key assumptions needed to tailor your inventory strategies by market, segment, product, and/or channel.
Optimize your inventory levels subject to budget or space constraints, tiered customer classes, or multiple stocking locations.
Establish hot-lists of products that could be produced to level-load production and navigate inventory shortages.
Isolate and overwrite out-of-date inventory targets with values that square with history and future plans.
Deploy business processes, along with the necessary training and governance structure required to ensure long-term success.
The best demand planning practices blend insight from up-to-date sales intelligence, historical patterns, and management judgement.
Your business process must enable planners to consider all of these inputs, focusing on the areas where they have the best information. They need to create a clear and compelling story for management. Finally, the planners must operate a closed loop process that drives continuous improvement.
Our approach to demand planning helps you to:
Deploy a set of analytical tools to capture the insight from historical shipments and point-of-sale data.
Combine that data with valuable forward-looking information like sales and/or distributor forecasts, open orders, promotions, etc.
Execute an exception-based planning process that focuses the planning efforts on areas of high impact like new product introductions, product end of life, or large customers with special programs.
Create a library of performance metrics tying to specific business and operational needs so that improvement efforts can focus on fueling real improvement.
Drive organizational scale by reducing the number of touches, redundant quests for data, and arguments over anecdote and interpretation.
Establish appropriate roles and responsibilities for analysis and decision-making, along with a suitable governance structure.
Supply planners face the challenge of ensuring adequate flow through the system while operating within an acceptable cost envelope. This means reconciling what we want to have with what we can have, and finding clever solutions to bring the two together.
The tactical tools at their disposal include setting short-term inventory policy and replenishment policies. Taking a more strategic view, the planners have to work within the constraints of available supply and capacity.
Supply planning also requires a thorough understanding of the entire fulfillment chain. They need to coordinate the buffer strategy across all of the nodes in the supply chain network.
We work with clients to:
Identify the business requirements and key assumptions necessary to tailor inventory strategies by market, segment, product, and/or channel.
Develop business processes to coordinate inventory allocation across the entire supply chain.
Optimize inventory levels subject to budget or space constraints, tiered customer classes, and multiple stocking locations.
Deploy metrics tied to specific business and operational needs so that improvement opportunities are clear and well understood.
Leverage analytics to characterize the upside and downside risks so appropriate compensating actions can be taken.
Sales, Inventory and Operations Planning
Done right, the SIOP process aligns the organization around its big bets. These may be product transitions, capacity investments, entry strategies to new markets, and exceptional marketing or sales campaigns.
A solid SIOP process brings the right data to bear to quantify the risk and rewards. It facilitates creation of the new plan of record. And it includes approval by the senior cross-functional team.
Our goal is to help your organization:
Design and execute demand and supply planning processes that provide specific recommendations and scenario analyses that crisply characterize the key risks.
Focus the process on the big asks where management can address obstacles to achieving those plans.
Execute a decision-making process where quantitative and qualitative trade-offs are clear.
Establish planning-specific metrics that align with overall business objectives and highlight necessary improvement activity.
Research shows that 70-80% of the cost of a new product gets locked in during conceptual design. And the same holds true for a supply chain network. Just setting the design to paper determines the bulk of the required capital investments, as well as the likely distribution costs.
Many off-the-shelf solutions can help you design your supply chain. But rarely can one model or one approach address all of your needs. And modeling alone tells only half the story. The “why” of the selected network design is often far more important than the concrete “what” of precisely locating facilities and picking transportation modes.
A good understanding of the “why” ensures that your supply chain design will stand up to the many surprises that will unfold over the next several years.
The right network design approach allows your supply chain strategist to:
Identify the business requirements, trade-offs, and metrics necessary to drive the right supply chain capabilities.
Translate the business requirements into a model and a solution methodology that drive insight as well as answers.
Identify optimal solutions for specific scenarios, but also compare solutions across a range of scenarios to identify the most robust solutions.
Production planning is all about managing constraints: supply to meet demand, hew to inventory targets, all subject to available capacity of equipment and personnel. The task of generating a plan may seem like just a turn-the-crank exercise of running MRP.
But many of the input parameters are in fact estimates, guidelines, or soft business rules. Consequently, some art goes along with the science.
An effective production planning process enables the organization to systematically and efficiently foresee constraints. Then, where possible, it should resolve those constraints well before they cause real problems. And it should facilitate scenario analysis so that uncertainty in the input parameters can be assessed.
In such a process, every production planner should be able to:
Understand the gross requirements that reflect customers’ true needs.
Run what-if analyses to measure the impact of resolving constraints.
Rely on system-enabled workflow to work with manufacturing on capacity constraints, procurement on material constraints, and order management with timeline or priority constraints.
Generate an optimized production plan that honors the final constraints with as few manual overrides as possible.
Supply Chain Risk Management
Comprehensive supply chain risk management programs are characterized by two key features. First, their elements are designed carefully beforehand to minimize anticipated risk exposures. And second, they include robust detect-and-respond capabilities that are activated when a disruption does occur.
The up-front design work requires a fact-based assessment of risks to support the cost effectiveness of different risk mitigation strategies. The results may be different network designs, different product designs, different contracts, or different processes. The detect-and-respond capabilities are all about information, coordination, and organizational alignment.
At the core of these capabilities are processes and tools that:
Curate the information about key business risks and provide visibility to key stakeholders.
Leverage well-defined decision criteria and metrics to enable the organization to balance near-term performance with longer-term health.
Support decision-makers with scenario modeling and quantitative trade-offs to complement their qualitative judgment.
Align the organization around system-enabled responses and playbooks to ensure that the organization has first-mover advantage when events do occur.