Supply Chain Planning: The Power of Co-Creation
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With the world changing at a faster pace than ever before, the need for organizations to be able to react quickly is drastically increasing. This impacts the way we design our business processes. In the complex environments of today, it is not enough to just have processes in place without system support. This was exactly the challenge one of our customers was facing; how to translate their processes into a planning solution that would not only support them today but would be able to grow with them as their requirements evolved. Europe’s leading medical supply distributor delivers more than 40,000 SKUs, ranging from mouth masks to hospital beds, and delivers to its customers across Europe from multiple distribution centers.
Challenge & Solution
The challenge that we took on together with our customer was to design an integrated solution in Anaplan for demand planning, supply planning, inventory management, and the S&OE process for their footprint, all the while keeping in mind that this solution would later also support an S&OP/IBP process that would run on top of these processes and a rollout to other countries for the unique SKUs sold in their specific markets.
The overall solution implemented consists of three models:
- Datahub: Next to the typical input for data and setup of hierarchies, this also includes the inventory management modules to determine product (SKU) classification according to their value, dynamics of consumption and order frequency, and Make-to-Order/ Make-to-Stock determination.
- Demand planning: Historical data review, outlier classification, and statistical forecasting leading to demand planning and enrichment and a focus on tender management.
- Supply planning: Supply planning at a daily level, exception management, and a full truck/container heuristic optimization logic to ensure orders ship in the most efficient and sustainable-effective way.
There are several solutions implemented as part of the overall implementation that deserve some special attention:
- Exception-based planning: Across all the dashboards that have been implemented, the focus has been on making the life of the demand and supply planners as easy and productive as possible. As we’re working with over 40,000 SKUs, focusing the attention of the demand planner where it matters is critical. With exception grids providing details on the top 10 highest forecast errors, positive and negative absolute deviations of forecast versus ordered units, we provide focus. It's similar for supply planners: we focus their attention on products that are out of stock or are projected to be out of stock in the future and products where we have scheduled receipts past their due date.
- Supply planning at the right level of granularity: The supply planning solution implemented allows for very granular planning at the daily level and is based on a custom working day calendar to correctly model the different lead times of every product. To provide a solution that works both for short and long lead time products, the dashboard allows for both weekly and daily supply plan aggregation to give the planner the flexibility he or she requires.
- Optimizing the quantities ordered: Several solutions have been implemented to optimize costs, inventory levels, and receiving in the warehouse. At the product level, we optimize the quantity ordered with suppliers based not only on how often you want to order with that supplier and their minimum order quantity but we also optimize for ordering by pallet or different sizes of cartons to efficiently receive in the warehouse. As many of the suppliers are long lead time suppliers that ship by truck or container the solution implemented also includes a custom-built truck and container optimization logic. This logic was one of the key requirements for our customer to ensure deliveries are efficient, sustainable and we do not ship any air. The heuristic optimizer built enables the supply planner to fill a truck or container from a supplier with a mix of products on pallets or in any other type of packaging while still being able to review the result and adjust where necessary.
More About Supply Planning:
- Cutting Inventory Costs with Anaplan
- Weathering the Storm: Overcoming Challenge and Achieving Success
- Sales Planning Meets Production Planning
The Power of Co-Creation
At bluecrux, we’re big believers in the power of co-creation. This not only applies to model building, but also to the design phase. Before we started writing user stories we’ve spent time with the customer team on understanding their current processes, their struggles today, and how we can help make the life of planners easier and more productive. Laying the foundation of the user stories together, by bringing in supply chain planning expertise and challenging each other on the right way forward has resulted in delivering a powerful solution that forms the basis more many use cases in the future. This co-designing led to co-creation during modelbuilding and enabling model builders to expand on their models as their modelbuilding expertise developed. Modelbuilding together has proven to be a powerful tool in becoming self-sufficient and we now truly see a business owned planning tool that is maintained and expanded on by the model builders themselves.
Anaplan: The One-Stop Shop for Planning
Feedback from users has been very positive. The users value the user-friendliness of the solution and how easy it is to understand how to navigate the models. In comparison with many out of the box solutions from other software vendors, solutions in Anaplan do not have extensive menu structures for things that you do not really need. Planners indicated that they have all the information they need at their fingertips versus previously having to go to several systems to get the inputs they needed to create a plan. Supply Chain planning now takes place in a one-stop shop versus having multiple instances in place of the previous planning software that was in use. This allows creating a full overview of all SKUs being planned and reporting on one data set that is kept in Anaplan.
As the first solution has been put live the team is now looking ahead to implementing the S&OP layer on top to help drive planning scenarios and decisions. Taking control over the longer-term planning horizon to bring sales, supply chain, and operations together with connected planning.
Hendrik de Cuyper is a consultant and solution architect at bluecrux, responsible for sales for the Anaplan practice. Over the last two years, he has helped deliver various Anaplan use cases in the field of supply chain, covering demand & supply planning, inventory management, and S&OP implementations.