This is part 3 of 3, as Seth Pacha, our demand planning guru outlines data integrity elements and system automation.
Processes – automated reviews that handle the 5-10% of exceptions
- Economic and market intelligence
- Sales programs / warranty issues
- New model / new product introduction
- End of life
Focus on building processes to manage these exceptions and allow experts to manage inventory with technology that customizes to the business and adapts over time. Business users need the ability to query data and setup daily, weekly, and monthly processes that drive business value. Any scripting or statistical language allowing the ability to schedule programs to run and generate output for review helps business experts manage these exceptions. As an example, new product launches require a tremendous amount of collaboration across the organization. Integrating this intelligence correctly into the planning system may require multiple processes such as a process to locate similar items, a process to apply changes to the planning, and a process to monitor backorders situations to highlight any adaptations to the other processes.
Performance management – “what teams measure, teams improve”
- Customer fill rate at the facing and network level and measuring order and line fill
- Inventory changes over time compared to part characteristics
- Supplier performance and performance to promised / planned lead-times
- Forecast compared to demand including accuracy
- Stocking policy changes
- Impacts after system changes
- Tracking of purchase orders and transfer orders
- Backorder changes over time
Monitoring of performance is vital. Tracking this performance over time allows for identification of trends that potentially lead to indicators that impact performance. Finding these leading indicators allows quicker reaction to conditions in the marketplace. Good business intelligence or data analytic tools now allow the presentation of these trends in a more simplified visual aligning all necessary parties. If the team does make changes to improve performance, the team must develop a baseline to track success. For example, if making a change to plan more parts in the facility, tracking the baseline allows the team to make sure the changes hit the targets established. This in turn provides confidence to the rest of the organization on the planning team’s ability to fine-tune the system to produce results.
Frequent pain points exist when building inventory to stock in anticipation of future demand. Having the knowledge of the key data elements and the cleanliness of that data helps reduce some of this pain. Understanding the main system configurations and automating the system to manage 90 – 95% of the part population also decreases pain. Finally, establishing consistent, automated processes that manage the 5 – 10% of exceptions while developing proper performance management also lessens pain. To improve performance and lower pain, build repeatable, automated structures around data, systems, and processes.
For further insight into our coaching services please reach out to Seth Pacha, Director of Product Development, firstname.lastname@example.org.