-
Subscribe to Blog:
SEARCH THE BLOG
CATEGORIES
- Aerospace
- Asset Maintenance
- Automotive
- Blog
- Building Products
- Case Studies
- Chemical Processing
- Consulting
- Food & Beverage
- Forestry Products
- Hospitals & Healthcare
- Knowledge Transfer
- Lean Manufacturing
- Life Sciences
- Logistics
- Manufacturing
- Material Utilization
- Metals
- Mining
- News
- Office Politics
- Oil & Gas
- Plastics
- Private Equity
- Process Improvement
- Project Management
- Spend Management
- Supply Chain
- Uncategorized
- Utilities
- Whitepapers
BLOG ARCHIVES
- September 2024 (1)
- August 2024 (5)
- July 2024 (6)
- June 2024 (3)
- May 2024 (3)
- April 2024 (4)
- March 2024 (3)
- February 2024 (4)
- January 2024 (5)
- December 2023 (2)
- November 2023 (1)
- October 2023 (6)
- September 2023 (3)
- August 2023 (4)
- July 2023 (2)
- June 2023 (3)
- May 2023 (7)
- April 2023 (3)
- March 2023 (3)
- February 2023 (5)
- January 2023 (6)
- December 2022 (2)
- November 2022 (5)
- October 2022 (5)
- September 2022 (5)
- August 2022 (6)
- July 2022 (3)
- June 2022 (4)
- May 2022 (5)
- April 2022 (3)
- March 2022 (5)
- February 2022 (4)
- January 2022 (7)
- December 2021 (3)
- November 2021 (5)
- October 2021 (3)
- September 2021 (2)
- August 2021 (6)
- July 2021 (2)
- June 2021 (10)
- May 2021 (4)
- April 2021 (5)
- March 2021 (5)
- February 2021 (3)
- January 2021 (4)
- December 2020 (3)
- November 2020 (3)
- October 2020 (3)
- September 2020 (3)
- August 2020 (4)
- July 2020 (3)
- June 2020 (5)
- May 2020 (3)
- April 2020 (3)
- March 2020 (4)
- February 2020 (4)
- January 2020 (4)
- December 2019 (3)
- November 2019 (2)
- October 2019 (4)
- September 2019 (2)
- August 2019 (4)
- July 2019 (3)
- June 2019 (4)
- May 2019 (2)
- April 2019 (4)
- March 2019 (4)
- February 2019 (5)
- January 2019 (5)
- December 2018 (2)
- November 2018 (2)
- October 2018 (5)
- September 2018 (4)
- August 2018 (3)
- July 2018 (2)
- June 2018 (4)
- May 2018 (3)
- April 2018 (3)
- March 2018 (2)
- February 2018 (2)
- January 2018 (1)
- December 2017 (1)
- November 2017 (2)
- October 2017 (2)
- September 2017 (1)
- August 2017 (2)
- July 2017 (2)
- June 2017 (1)
- April 2017 (3)
- March 2017 (3)
- February 2017 (2)
- January 2017 (2)
- December 2016 (2)
- November 2016 (4)
- October 2016 (4)
- September 2016 (3)
- August 2016 (6)
- July 2016 (4)
- June 2016 (4)
- May 2016 (1)
- April 2016 (3)
- March 2016 (4)
- February 2016 (2)
- January 2016 (4)
- December 2015 (3)
- November 2015 (3)
- October 2015 (1)
- September 2015 (1)
- August 2015 (4)
- July 2015 (6)
- June 2015 (4)
- May 2015 (7)
- April 2015 (6)
- March 2015 (6)
- February 2015 (4)
- January 2015 (3)
CONNECT WITH US
Tag Archives: Planning and Forecasting
How do you plan for the future when you’re just trying to get through the present? A present filled with crisis, uncertainty and wildly fluctuating demand, complicated by severely disrupted supply. If that situation sounds familiar, you’re not alone. We’ve all just lived through it.
Companies in just about every industry are riding the same supply-demand roller coaster, fueled by the ultimate disruptor of this century, COVID-19. Just a quick snapshot: The construction and furniture industries are now suffering from shortages of everything from lumber to foam, but demand is high as people, shuttered in their houses for the past year-plus, looked around and decided to spend their dollars on home improvements rather than vacations. Filling that demand, not so easy. Finished products like sofas and appliances are delayed because of shipping snafus. And that list goes on. Cars, chlorine, chips for video games, chicken, bacon (say it ain’t so!), and aluminum cans.
Not helping the problem: peaks and valleys in employment, with companies laying people off only to see demand for their products soar again.
It boils down to a whole lot of disruption, leading to long delays getting product to customers. Everyone is frustrated. The culprit, in the broad sense, is the pandemic. But closer to home, within your own company, it might be the result of lack of planning.
Many companies are in the same boat. Employees, managers and the C-suite alike have been focused on simply getting through the pandemic with the doors still open. We were dealing with work slow-downs because of new ways of working. Employees had to go through a dance of protocols (temperature checks, questionnaires) to even get onto the shop floor. Social distancing resulted in fewer people at work at one time, slowing it down even further. Supply chain disruptions ground businesses to a halt, or at least to a crawl. Demand in many industries dried up. For other industries, demand dramatically lessened as customers were put out of work and stopped buying much of anything that wasn’t a necessity.
We get it. Companies across all industries were just trying to keep their heads above water to get through the crisis. What they weren’t doing was planning for it to end.
Planning is the key
Now that there is an ever-growing light at the end of the pandemic tunnel, companies are scrambling to figure out what comes next. Dealing with current shortages of supply and, frankly, employees, as customer demand begins to creep up, it has been a struggle for people to define, forecast and plan for what comes next. The good news? We can help companies ramp up to meeting the demands of the coming months and beyond. It’s about efficiencies, planning and forecasting.
Here are some strategies we’ve seen to help companies ramp up for increasing demand in uncertain times.
Focus on efficiencies. If there was ever a time to throw out the “this is the way we’ve always done it” mentality, it’s now. It’s vital to focus on doing more with your current assets, even doing more with less. It’s about looking at your processes and procedures with a critical eye to determine if you can do things better, faster, leaner and more efficiently.
Implement a rolling forecast calendar vs. a yearly calendar. We recommend a flexible, rolling forecasting process, going 24 months out. When you’re finished with one month, it drops off and you add another at the end. Unlike a yearly forecasting and planning calendar that is written in stone once a year, this is flexible, requiring frequent refining, tweaking and amending, based on current market conditions. That concept, flexibility, is important here. If this past year-plus has taught us anything, it’s that the ability to be flexible, change plans, pivot and otherwise react or anticipate market conditions is vital to survival.
Sales, Inventory and Operations Planning. SIOP is a planning process that meshes demand forecasting with production, sourcing and inventory plans. Most people are used to this as the S&OP process, but at USC Consulting Group, we believe that leaves out the critical “inventory” piece of the puzzle. We feel SIOP is a more holistic approach that leads to greater efficiency.
Adopt an agile, lean mindset. Lean manufacturing is nothing new, and people think of it as optimizing inventory on the basis of demand. It’s about having enough, but not too much, inventory on hand. It’s also about carrying that mindset throughout your organization, with the goal of maximizing value for your customers while minimizing waste. It can also include things like employee cross training to make sure there are people on the job who can step in at critical moments.
At USC Consulting Group, we’ve been helping companies ramp up their operational efficiencies for more than 50 years. If you’d like to talk about how we can help you position yourself for a post-pandemic world, give us a call today.
The planning and forecasting process has always been a vital part of manufacturing, but now, after a roller coaster of a year, it’s becoming clear to many in the industry that this process needs to be bulletproof — and in many cases, it isn’t. The good news? A little tweaking and refining can shore up your planning process and help protect your operation against any kind of uncertainty, or disruption, that may come down the pike in years to come.
Problems in planning
You already know that accurate planning and forecasting is designed to anticipate demand and determine how much to produce to meet that demand, including shoring up adequate, but not too much, supply. We find that for a number of our clients, that works out to a “tons per hour” measurement of what they can realistically produce on any given day.
But, snags that manufacturers encounter in their planning process tend to come from the “it’s the way we’ve always done it” files. Here are just a few that we’ve seen lately:
Data is old by the time the plan actually goes into effect. Does this sound familiar? You start planning at the beginning of the month. By the end of the month, you’ve got a plan to hold yourself accountable. Great! But, the problem is, you’re using month-old data to start their planning process, so at the time the plan goes into effect, you’re using two-month-old data.
Data is not uniform. If manufacturers have multiple locations, odds are that they’re not all walking in lockstep when it comes to planning and forecasting. You may have plants doing their own thing, how they’ve always done it in regard to efficiencies, so there is no single source of truth on efficiencies and capabilities companywide.
Vetting time. If manufacturers are taking too much time to vet the plan, it delays the accuracy and immediacy of their data.
Unforeseen circumstances. We all know now, all too well, how unforeseen circumstances can throw a wrench into operations.
Refinements that can solve those problems
We’ve found that for many of our clients, some tweaks and refinements to their planning process can make all the difference. Here are a few problem-solvers that our clients are implementing.
A rolling calendar structure. We recommend instituting a 24-month rolling calendar, so when one month drops off, another is added on the back end. Here’s how it looks in practice:
- The first third of the month. Look back and assess how you performed vs. the plan in the previous month. If you fell short, how can you get better?
- Middle third: Continuous improvement. Develop action items to make the planning more smooth.
- Final third: Actually do the planning. Instead of having two-month-old data, you’ll be working with at most 10- to 15-day-old data.
Compromise on perfection in favor of immediacy. Don’t write those 24 months in stone. The plan might change multiple times between the start of the plan and 24 months down the line because of unforeseen circumstances. Being OK with this might require a huge shift in mindset for some people.
Flexibility. The forecasting and planning process has to be flexible enough in manufacturing to roll with the tides that might shift at any given moment in time.
SIOP. We focus on Sales, Inventory and Operations Planning, a holistic process that integrates customer-focused demand plans with production, sourcing and inventory plans, resulting in improved tactical and long-term business decision-making capability. The purpose of SIOP is making sure the business is having the right conversations about the right things at the right time. Steps in the plan include:
- Sales forecast
- Inventory considerations
- Planning
- Executing the plan
- Reporting and reviewing
- Analyzing and improving
Uniform efficiencies across all plants. If you have multiple locations, get everyone on the same page in terms of planning.
Bottom line, more accurate planning and forecasting is going to make your manufacturing operations more efficient and ultimately more profitable. At USC Consulting Group, we’re dedicated to helping our clients get there.
For an inside look into how we helped a national construction materials supply company refine their planning process, read “Building Materials Supplier Lays Groundwork with SIOP.”