Discrete manufacturing is a vital part of the economy and the retail market. Without it, we would not have cars, planes, smartphones, furniture, and other goods that contribute to a high quality of life. While the end products have astronomical value, the discrete manufacturing process is radically complex and contains all the elements for the perfect supply chain storm.
Let’s think about it: from start to finish, there are distinct pieces of the manufacturing process to monitor, numerous stakeholders involved in making decisions along the way, and different requirements for every unique customer to consider. One disruption – even a tiny one – can incite a chain reaction that leads to delayed delivery times, excess fees, and reduced service levels.
Additionally, since discrete manufacturers produce Made-to-Order (MTO) and Engineered-to-Order (ETO) products and often aren’t aware of a customer’s particular needs until they have configuration details in hand, long-term planning and accurate forecasting are more complicated. What’s more, volatility has become the new norm – and reactive planning is no longer sufficient. It’s downright dangerous.
With several avenues for something to go awry, how can discrete manufacturers prevent a downpour and ensure business continuity? The hard part is often identifying how to simplify a nuanced process, which is why Integrated Business Planning (IBP) and Demand Planning solutions are consequential beyond compare. Take a deeper look into why:
Beware of Cloudy Skies – Visibility Is Key
Many discrete manufacturing supply chains have blind spots due to fragmented systems and a lack of visibility into data, processes, and workflows from end to end. Without complete visibility, cloudy skies leave room for the impacts of volatility to go unnoticed and unaddressed, which can cost hundreds of thousands of dollars. IBP and demand planning shed light on every corner of the supply chain process, so manufacturers can quickly address and overcome fluctuations while mitigating future risks.
Check the Forecast – Planning Accuracy Is Paramount
Achieving forecast accuracy and maintaining proper inventory levels are two of the biggest challenges for discrete manufacturers. Fortunately, those processes are what demand planning does best.
An intelligent demand planning solution looks to the past to predict future needs by using automation, intuitive analytics, and trend recognition to create stunningly accurate demand forecasts – despite volatility. Projections are then applied to a Bill of Materials (BOM), resulting in automated work order generation, timely component replenishment, and precise inventory refinement that maximizes return.
Seek Coverage – Protect The Bottom Line
Unforeseen issues can have thunderous consequences, but IBP protects the bottom line from deadly strikes. IBP expands on Sales and Operations Planning (S&OP) principles and fully aligns business goals with finance, sales, production, and other operational functions. An IBP solution combines data from every stage of the supply chain process to provide a single source of truth for all planning and reporting activities, providing the necessary transparency to plan network-wide. When a manufacturer can identify how one aspect of their supply chain process impacts another, they obtain maximum visual coverage that results in some of the following benefits:
- The ability to ensure that materials are purchased at the right price, at the right time, and in the right quantity.
- Enhanced collaboration among departments and improved decision-making.
- Greater awareness of potential areas for cost reduction and process improvements at each stage of the manufacturing cycle.
In today’s environment, speed is critical for discrete manufacturers who need to compete well and consistently meet their goals in the face of volatility. Pivoting is not a matter of if but when, and the best way to be prepared is with IBP and demand planning. By aligning the sales front with the productivity backend and everything in between, complete visibility is achieved, making it easy to respond faster, forecast accurately, and select an alternative route.
Without an IBP and demand planning solution, the risk is so significant for daily wasted spending that discrete manufacturers ultimately jeopardize their market share, customer service levels, and profit. Remember: volatility may be the new norm, but storms don’t have to be. Contact us today for more information on IBP and demand planning, or check out our resource hub.