The Power Of Supply Chain Planning Provides Competitive Edge For Medium-Sized Businesses

Shaun H. Ruff

Everyone has a product that brings comfort and happiness. Some choose to imbibe a favorite wine or spirit, while others reach out for the perfect banana or treat themselves to a tender steak. Personally, my comfort food of choice is a portion of chips (or as Americans call them French fries), with a little salt and vinegar.

Whatever your chosen “comfort” item, recent supply chain disruptions likely made buying them more challenging than expected. But this hasn’t been all bad news for medium-sized companies. Many brands experienced either a minor change or surge in demand, and others have learned to shift their business model to serve different customers.

Consider Lamb Weston. The provider of dehydrated and frozen potato products to food-service, quick-service, industry, and retail customers in more than 100 countries experienced a sharp decline in orders due to lockdowns mandated in response to rising COVID-19 cases. To safeguard its profitability, the company re-engineered its manufacturing operations to trade massive, restaurant-sized packaging for smaller sizes to sell directly to the consumer.

Medium-sized companies, such as Lamb Weston, require a level of integrated business planning beyond the traditional supply chain to achieve such a transformation. According to IDC, success happens when supply chain planning is fully integrated and dispersed across the business and massive volumes of data are available throughout the organization.

Putting the power of the extended supply chain on full display

Although the concept of planning has evolved over the years, the pandemic has raised the profile of supply chains and the importance of systems that enable them. It has also accelerated the clock speed of planning cycles.

It is no longer acceptable to rely on monthly planning cycles and frozen planning horizons. Medium-size businesses must now respond, pivot, and readjust in real time – even faster than their larger competitors – to remain competitive. More importantly, they also need the right tools to support sales and operations planning, forecasting and demand, response and supply, demand-driven replenishment, and inventory planning.

By connecting and integrating supply chain processes and data, businesses can sense demand, understand what customers want, and deliver the right products and services – as quickly as possible. Furthermore, harnessing massive volumes of data into real-time intelligence enables critical supply chain improvements such as predicting future operational needs, identifying alternative sources, and developing new business models to reach new markets.

Rethinking strategies and pivoting operations have allowed companies to take advantage of new opportunities or mitigate risks. For example, Roy Hill, the operator of Australia’s single-largest mine, optimized its demand and inventory management practices with an integrated business planning solution. This step led to reduced working capital by transitioning from a replenishment-based to a demand-driven model; reliable production availability in line with demand-chain requirements; and better collaboration with suppliers, freight providers, and warehouse.

This edge acquired by Roy Hill is particularly beneficial as planning cycles accelerate. Business and planning systems must be implemented and integrated to support the process across multiple organizational levels. More sophisticated planning techniques can be applied – without adding headcount – to plan strategically, execute strategies with less lead time, and schedule production, transportation, and distribution adjustments weekly or daily to schedule.

Turning supply chains into business networks

As quickly as the markets change, nothing beats the ability to sense opportunities and risks and promptly respond to them. But it is also important to note that such an approach rarely ever fits into the mold of a traditional supply chain.

This is where the power of real-time data and integrated business planning amplifies the value of your business network of partners. The organizational model inevitably evolves into a network in which all suppliers, contract manufactures, service providers and other partners collaborate and pivot together to seamlessly deliver on customer expectations – even my craving for the perfect French fry.

Find out why integrated business planning is the key to creating a supply chain that is better equipped to break through challenges and seize new opportunities with resilience and agility. Read the IDC technology spotlight, “Resilient Supply Chain Planning for a Disruptive World,” IDC, sponsored by SAP.

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