Supply Chain Consultancy
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Supply Chain Management

Supply Chain Management

Demand forecasting

The forecasting of demand is fundamental to many commercial and operational decisions. It facilitates critical business activities such as financial planning, sales and marketing plans, material requirement planning, and production planning to name a few. Poor forecasting creates no end of issues in any supply chain.

The design and operation of the demand forecasting and planning process, including roles and responsibilities, systems, and required skillsets, should promote accuracy and, critically, reduce bias. The consistent generation of a reliable, data-driven, statistical forecast will help to drive supply chain and financial efficiencies.

What we do

At the outset, demand patterns are identified using our OP2MA Demand Diagnostic. An appropriate sample of sales data is taken to plot volume against variability (measured by coefficient of variation).

By segmenting demand, it is possible to assess how the supply chain is geared for satisfying different requirements; for example, high volume, stable demand can be supported by an efficient or 'lean' supply chain setup, high volume, volatile demand needs to be supported by a flexible or 'agile' supply chain setup.
Our assessment considers:
  • the quality of data inputs to the forecasting process, both quantitative and qualitative
  • the methods applied to create demand forecasts
  • accountabilities for both data inputs and finalised forecasts
  • cross-functional KPIs and incentives and how this might influence forecasting decisions
  • forecast performance measurements.
Once demand patterns or segments are defined and current ways of working are assessed, combined with our OP2MA capability framework, it is possible to design specific, repeatable processes to drive efficiency at a scale that is effective in matching customer expectations.

Benefits

Business performance can be considerably enhanced with effective demand forecasting, resulting in numerous benefits including:
  • increased customer satisfaction by improved service levels
  • better decisions on which product portfolios to expand or scale down, to improve productivity and profitability
  • lower safety stock requirements requiring less working capital
  • reduced product obsolescence costs.

Sales & Operations Planning (S&OP)/Integrated Business Planning

A well-functioning S&OP process greatly enhances the ability of a business to manage the supply chain and balance the inherent trade-offs between service, cost, and capital employed. It allows businesses to take advantage of opportunities and mitigate risks and navigate toward strategic objectives.

What we do

We combine in-depth knowledge of designing and managing S&OP processes with a structured appraisal framework that assesses current ways of working, including:
  • the quantitative and qualitative inputs from demand, inventory, supply and capacity planning
  • the operation of S&OP policy and associated documentation
  • roles and responsibilities including meeting organisation and decision-making accountabilities
  • planning integration, planning horizons and scope
  • performance measurements and the use of KPIs in the S&OP Process
  • cross-functional KPIs and performance incentives and their impact on S&OP outputs.
A change programme can then be developed that reflects the business specific aspects around process, people, and systems required to achieve S&OP excellence.

Benefits

As the key process that balances supply and demand, the benefits of S&OP excellence include:
  • increased transparency, co-ordination, and collaboration across the business; invaluable in a volatile supply chain environment
  • better decision-making using data-driven analytics and qualified market knowledge
  • improved customer service and experience
  • higher profitability and optimised working capital.

Sourcing and procurement

Supply networks start somewhere and how they are configured and managed plays a key role in operational and financial performance as well as managing risk and supporting sustainability. Difficulties here often multiply downstream and compromise the resilience of the supply chain.

Managing suppliers is of fundamental importance; selecting the right companies and working in collaboration can transform supply chain performance.

What we do

Our review will consider the approach and capabilities of the business in sourcing and procuring goods and services, including:
  • procurement direction and policy
  • organisational structure, roles and responsibilities
  • category management
  • sourcing strategies
  • supplier management and development
  • performance management.
Using our OP2MA capability framework, we can then develop a transformation programme that aligns with the resources and priorities of the business and shapes procurement activities to deliver what the business needs.

Benefits

Procured goods and services typically represent a significant proportion of total costs and reliable supply is essential to stable, optimised operations. The benefits of strong capabilities in procurement include:
  • managing input costs
  • building supply chain resilience
  • supporting product and process innovation
  • mitigating risk, both for disruption and to reputation
  • enhancing operational efficiency and effectiveness.

Inventory Management

Inventory is a crucial component of working capital management, that said, managing inventories is often one of the least glamourous roles in the business; any stock-outs and everyone knows about it, any excess or obsolete stock and something of a ‘blame game’ may ensue.

Inventory management is fundamentally dependent on cross-functional processes; decisions on core parameters and ways of working have strategic implications. Management KPIs and incentives need to be aligned to support coherent supply chain management.

What we do

Together with our OP2MA capability framework, we review planning and management processes, organisational design, and systems configuration, including:
  • item stratification and how this aligns with business priorities
  • economic order quantities and the balance between the purchasing process and minimising total costs
  • safety stock management and the key drivers of demand and supply variability
  • performance management; inventory availability, excess and obsolete stock, and the controls on inventory levels.

Benefits

Optimising inventory is a continual process; embracing efficient inventory planning and analysis will allow the business the potential to benefit from:
  • increased sales and enhanced customer satisfaction
  • Improved cash flow
  • reduced working capital
  • reduced warehouse footprint and associated storage costs
  • reduced provisions for obsolescence.

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Case Studies

A Supply Chain restructure for British Wool that made significant cost savings and created long term sustainability

Due to rising cost pressures, British Wool needed to restructure their supply chain in order to make the level of cost savings required to sustain the business.

Supply Chain redesign transforms performance of food service distributor

With unnecessary complexity in the supply chain, excess inventories, and extensive use of external warehouse storage, this food service distributor was struggling to support their growth.

Supply Chain excellence drives growth with Global Toy Manufacturer

Once rated as the worst major supplier in an industry survey, the operational performance of this organisation was undermining turnaround. Read how embedding supply chain excellence helped this company achieve 5-fold sales growth.
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