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Unformatted text preview: Best Practices Minimize the Luck Factor in SC Planning By Robert J. Bowman January, 2004 Ten best practices in supply-chain planning, culled from conversations with leading supply-chain executives, analysts and vendors the first of a series of six Best Practices articles to be presented this year. C ompanies live or die by the Almighty Plan. From ordering raw materials to delivering finished product, everything is tied to the best possible forecast of demand. Yet consumers are a notoriously unpredictable lot. Who can say which new product or promotion will take off, and which will die on the shelf? In the end, planners must rely on a combination of experience, technology, knowledge of markets and just plain luck. That said, leading companies minimize the luck factor through a series of best practices that draw on the latest thinking in management techniques and a wide array of technology tools. Here are 10 of them, culled from conversations with leading supply-chain executives, analysts and vendors. 1. Collaborate internally. Think this part is easy? Think again. Bob Moffat, head of IBMs Integrated Supply Chain organization, has been quoted as saying that internal integration is the single biggest challenge that companies face, when overhauling their supply chains. And the business world still has more silos than the Kansas wheat fields. Noman Waheed, senior manager of the supply-chain service line with Accenture in Chicago, calls for an integrated sales and operations planning (S&amp;OP) process that can address mismatches between supply and demand. That means regular meetings between managers hailing from all the major functions manufacturing, marketing, procurement, sales, fulfillment, logistics, finance. IBM has had particular success in this area, says Steve Buckley, manager of supply-chain analysis with IBM Research in Yorktown Heights, N.Y. Despite its enormous size, the company has fostered a culture of collaboration through the use of Lotus Notes, e-mail and instant messaging. To Larry Lapide of AMR Research in Boston, Mass., an effective S&amp;OP process cuts across discrete functions and embraces plan creation, collaboration around a forecast, and management of the follow-up. If its done right, the process should yield lower inventories, reduced operating costs, better customer service, and increased profitability. Samsung Electronics has dismantled its organizational silos through the creation of a command center which combines sales and manufacturing business processes, says Adeel Najmi, supply-chain solutions executive with Dallas-based i2 Technologies. The process took nearly four years, but a multi-pronged strategy, including You need to understand whats going to drive operational performance and have a direct impact on your financial statement. Sri Aparjithan of Celerant Consulting planning and profit optimization software from i2, has helped Samsung to become the worlds most profitable manufacturer of consumer electronics, according to Najmi. most profitable manufacturer of consumer electronics, according to Najmi....
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