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Blog November 2019

Demand Planning

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Reduce the associated risks and improve your margins

Planning the required inventory for production or material slot sales can be a bit of a nightmare. It’s hard work. For the majority of Planners, the process is manual and paper-driven. It’s managing a list of hundreds of suppliers, making calls, checking prices, and staggering out schedules.  Does this sound familiar?

Effective demand planning is about ensuring a continuous supply of material over the month to meet your mill’s needs.  It’s an equation, looking to match the supply with the demand and at the right time. 

Crisis Planning

Planners don’t want a build-up of trucks waiting at your yard. And the material that is being delivered – is it what was promised? The correct material, grade, quantity? Perhaps you’re consistently finding contaminated loads, a mixed bag of soiled material under the grade A paper you were expecting. The 5 tonne of OCC you ordered is now 3 tonne and the rest is contaminated, or it’s another material.

This creates crisis planning.  You can expect to pay a higher price in a crisis. Now your Planner needs to get back on the phone and source more material and deal with the contaminated issue with the supplier.  Imagine it’s only the start of the month, and another of the five scheduled loads that morning has the same issue.  The production run is being impacted and there’s now a legitimate concern around meeting the production demand.  This is a reality.

What’s the knock-on effect of all this? It’s hugely laborious, it’s affecting your production run or upstream selling capabilities. It’s a big risk to your business, your margins, and your sanity.

Averting that crisis

Where’s the utopia in all of this? It’s a long way from what is being talked about above. It’s ensuring optimum material supply to support production runs or sales. What’s needed here is a reactive and completely digitalised system, that works with Planners to help schedule any shortfall in material quantities, at any given time of the month.

So that supplier with the contaminated load; let’s look at an integrated system that visualises the shortfall so you can see if you’re still on schedule to meet the demand or if you need to go back to your virtual assistant to get more inventory in.  Now we’re talking about a demand planning solution that is doing the planning for you. A solution that summarises where you’re at with your inventory.

This is enabling better decision-making and cost control!

Let’s look for a system that gives you a real-time dashboard view of the scheduled material, what’s received, and what’s required, enabling you to take corrective actions to address any issues, immediately.  It’s simply better inventory management.  There’s now no need to excessively stockpile material, reducing costs there – such as the costs of storage, inventory depreciation. This is ensuring your mill, or sales team is consistently running as planned. It’s automating and digitalising menial tasks, that is taking up too much of your planner's time.

There’s another knock-on effect here; it’s optimising traffic at the scale, reducing bottlenecks associated risks there (from H&S, financial and operational loss). Reducing the risk of inventory shortfalls is absolutely impacting the resources and time spent on demand planning.  This is reducing your demand planning costs per euro of revenue. Now your margin is happier.

What else?

What if there is more? Let's talk about integrating your mobile quality and evaluation application into your demand planning process. That supplier with the contaminated material we talked about, the one the yard inspector reviewed…The demand planning system is already working for you to fill in the shortfall.  This is efficient.  This is real-time and an impressive visual representation to support better decision-making. It’s faster,  reactive planning that also effectively manages your costs, which is working with you to improve your margin.  It cuts out the stress.

Want to hear more? Get in touch with our team to learn how the AMCS Demand Planning module can support greater efficiencies in your inventory planning processes, reduce the risk of shortfalls and support a happier margin.

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