Supply chain optimization is vital to ensure that you have a reasonable strategy in place with regards to how much or how little you need to manufacture of your product, what the most efficient way to get your product into customers’ hands is, and many other important factors that must be taken into consideration.
So what, exactly, is the best way to optimize your business’s supply chain? There are four essential stages which must be undertaken in order to make sure that a business can ensure the best possible results.
Stage 1: Make a Forecast Using Reliable Data
Every successful supply chain optimization begins by developing a forecast for your products using data that has been generated from a reliable source. Unfortunately, it is very easy to compromise a sales funnel by using older, outdated software that does not take external factors into account, such as the cost of promotional activity. Neglecting those factors at the outset will only end up costing a business more over a long period of time due to inaccurate data. By using a software solution from a reliable partner, such as CT Global Solutions, you can be certain that the baseline of your statistical forecast will be considerably more accurate.
Stage 2: Implement Consensus Demand and Supply Planning
Consensus Demand Planning uses a workbench which tests forecasts and the results of optimization to ensure targets are met. The workbench puts demand and supply plans into a financial context. Scenarios can be run and compared to help select the best forecast and replenishment plans. Consensus planning is ideal for helping the many people involved in demand planning to collaborate easily and agree on the best actions.
A Consensus Demand Plan is the result of a statistically-driven bottom-up forecast reconciled with a financially-driven top-down forecast. This forecast is evaluated and modified when necessary, through ongoing reporting and consensus meetings. Retailers that utilize a consensus plan have better control over their merchandising and supply chain operations and can better predict and shape consumer demand. Businesses can maximize sales and marketing by accurately predicting future demand, and using the information to synchronize demand with their sources of supply. The result is delivering the right product to the right place at the right time for the right customer.
On the supply side, planners can take the optimization results from the solution and view its financial and business impacts using the workbench. Staff in the supply chain can view the impacts and compare them to their financial and business plans and metrics. If there are gaps they can run a new scenario and then collaborate with other players in the supply chain to review, run new scenarios, and gain a consensus on the best plan.
By developing a consensus demand plan, all of the departments within a company, from revenue planning, sales, digital marketing, supply chain, replenishment, and manufacturing, operate with the same common goal in mind. CT Global Solutions custom designs software solutions built on SAS Demand Driven Planning and Optimization (DDPO) that allows companies to do exactly that in a timely and efficient manner.
Stage 3: Advanced Forecasting
Advanced Forecasting is the process of using the information and infrastructure that was acquired from the first two stages to provide more accurate forecasting with regards to a company’s product. This can be a challenge because of areas such as promotions, which may have been undertaken previously but will not be repeated again in the future. A SAS DDPO solution allows a company to take these kinds of factors into account and control for them accordingly.
Stage 4: Optimal Decision Making
By paying attention to the robust forecasts that were developed in the prior stages, companies can mitigate and control for factors such as low customer satisfaction, lower market share, poor profits, and incorrect production plans. This is the stage when all of the information that was previously acquired is finally synthesized and implemented into a cohesive and wide-reaching strategy that the entire company is able to stand behind.
CT Global Solutions designs custom, scalable software solutions built on SAS DDPO to help you optimize your supply chain. Contact us today to learn more about how we can help your company grow.