Organizations abound with bold and innovative strategies, as well as inspiring and creative ideas. Yet, how many times has the result failed to align with the initial idea? Is it not common to hear the following statements?
These situations usually result from insufficient care in the long term, and a poor integration of the different operational planning aspects. It can prove complex to integrate the various planning processes that help identify the foreseeable issues and opportunities.
A robust planning of demand and operations answers the following core questions:
These are essentials that can turn a strategy or an initiative into an operational reality.
In recent years, Talan witnessed a growing interest in the performance of DOP processes. We believe this is due to the rising cost of mistakes related to the processes themselves. In the past, we would mitigate averagely done plannings with overtime and mass hiring. Today, most organizations are faced with a labor shortage that prevent them from using this approach. Planning mishaps now often end in lost sales.
DOP acts as the control tower of your company’s supply chain. This control tower should offer extended visibility—from the customer request to the delivery of the product/service. The key to success is to integrate stakeholders in planning, and to align with their operations so that the delivery meets the customer’s expectations in terms of cost and efficiency.
This solution may appear simple, but implementing it requires tenacity, effort, and precision in the long-, medium- and short term.
Comparing operations planning to trip planning can help in understanding the various moving parts.
When planning a trip, there’s no need to check the daily weather forecast in advance. What’s more important is the budget, date of departure, and recreational activities to choose from. The closer we get to the hoped-for moment, the more we refine the plan. On site, we make weather-related decisions, adjust the initial plan, and make the most of that precious vacation time.
Most manufacturing and distribution companies focus their efforts on short-term DOP. Very few engage in long-term processes. Planning with a wide-angle view helps to take proactive action on long-term challenges, and to stabilize short-term operations as much as possible. The implementation of performing processes at different planning levels will result in a better operational efficiency. Among these planning levels are:
The implementation and optimization of DOP processes depend on the coordination of three key factors of success.
Neglecting one of these can result in improvement efforts ending in one of the three unproductive areas: employee alienation, employee frustration or automation chaos. This concept is depicted in the image below. Past projects with a subpar outcome may find their place in the Venn diagram.
A structured approach is necessary for improving DOP activities. The goal is not only to generate and submit a report, but to put in place the foundations for a structured support system. This includes the analysis and implementation of future processes while taking account of labor, productivity, and technology.
Besides, this same approach integrates seamlessly in a technology implementation environment. It is effective to build a vision based on a preliminary analysis, map the target processes, and identify the technology requisites that will guide the choice of a solution.
The challenge that awaits process-planning stakeholders is to balance and optimize the three conflicting objectives: operational efficiency, customer service level, and control of inventory levels.
Even if they often go into opposite directions, these three performance aspects can be optimized by implementing best practices specific to each organization, developing the required skills, and supporting the processes linked to a suitable technology.
Improving planning activities allows the organization to:
Do you need help in implementing your integrated demand and operations planning? Our experts took part in several successful projects; they will gladly assist you at each step of the process, from design to implementation. Contact us now!