Supply Chain
Testing and adopting solutions
Measurement and continuous improvement
In summary
It is not uncommon, during S&OP meetings, to realize that the production and supply chain teams are out of sync. Often, they do not use the same tools, and consequently they do not refer to the same data. Nor do they have the same objectives.
It is not uncommon, during S&OP meetings, to realize that the production and supply chain teams are out of sync. Often, they do not use the same tools, and consequently they do not refer to the same data. Nor do they have the same objectives.
In most cases, we encounter teams that work and juggle between a certain number of Excel files specific to each team, and their ERP. So in addition to not working with the same tools, production and supply chain attempt to exploit static data on a daily basis.
In these cases, it is complicated to obtain KPIs that truly make sense and on which we can rely to build in a solid and lasting way.
To reconcile production and the supply chain, several solutions can be considered.
An alignment of objectives: First, you must ensure that the objectives of production and the supply chain are aligned and complementary. It is not as "easy" and obvious as it seems, but it is a low-cost solution that will facilitate communication and collaboration between the teams.
Consider a software overlay :
Intelligence and dynamism : There are several solutions on the market, solutions that handle data and collaboration very well, that can run scenario simulations, and add intelligence at the end of the system, or in decision-making. This solution, or these solutions, will offer dynamic data to the teams, but also common tools that will foster communication.
Information sharing: It is also strongly recommended to opt for a solution that shares information on stock levels, demand forecasts, and production lead times in real time. This will help synchronize production and supply chain activities.
Integrated planning : Integrating production and supply chain planning can facilitate access to a global vision of the company's needs. This will make it possible to identify synergies and avoid potential conflicts.
Flexibility: Opting for a solution that can integrate data the ERP is not aware of, such as a breakdown or a shortage, will foster flexibility in production and the supply chain in order to be able to react quickly to changes in demand or supply problems. This can include adjusting production levels or seeking alternative supply sources.
Collaboration with suppliers: Working in close collaboration with your suppliers, or even integrating your suppliers' information in real time into a solution, would ensure a regular and high-quality supply of raw materials. This would make it possible to reduce production delays and improve the efficiency of the supply chain, or even reduce a potential bullwhip effect in some cases.
Smooth communication: Encouraging open and transparent communication between the production and supply chain departments is a good way to link the teams. This communication must take place during meetings, such as S&OP meetings, but also outside them, and include updates to allow each party to understand the needs and expectations of the other.
Training and skills development: Investing in the training and skills development of the production and supply chain teams will make it possible to improve their mutual understanding and strengthen collaboration.
There are HR solutions specialized in industry such as Mercateam that will make it possible to easily identify not only the training needs according to the current skills and knowledge of employees, but also the gaps, the skills, and the missing certifications within an organization.
Setting up KPIs
Once the first measures are taken or implementations carried out, setting up key performance indicators (KPIs) will make it possible to measure the effectiveness of the production and supply chain teams now that they work "hand in hand" with new tools. These indicators will make it possible to identify areas for improvement and to implement any corrective actions.
Validating an ROI
Next, you must validate an ROI because you can have an adoption success and teams that love the solutions and the new routines, but you must above all verify that these new processes and investments in digital solutions generate gains.
If your company has several production sites, do not hesitate to set up pilots. The goal is to have a few occurrences in order to be able to verify the ROI, while immediately conceding that, since we do not always start from the same starting point in all the pilot plants in terms of underlying digital maturity for example, the ROI will not be identical everywhere.
The rhythms of S&OP-type meetings and the frequency of strategic interactions also play a role because inevitably, if the frequency is higher, the ROI will be greater too.
→ Learn more about implementing a digital tool within an industrial site
Reconciling production and the supply chain requires an integrated, collaborative, but also iterative approach. If it were so simple to make the two teams work in concert with a shared data and KPI view, the secret recipe would have been revealed a long time ago.
However, each industrial group has its own constraints, its own structure, and its own culture. Thus, you will have to find motivated people within the two departments to carry out this essential operational mission, but also conductors (site directors, directors of innovation and digital transformation) to keep a macro, strategic, and ROI-focused view.
