Over the past several years of working within supply chains to improve their effectiveness, one of the most common barriers I come across is the phrase “production wheels only work in a perfect world”; when what I most often find with clients who do make the journey is that production wheels provide the structure and order to deal with the real world in the most pragmatic way.
Specialised tools can allow clients to develop optimised production wheels and replenishment policies balancing operating costs, working capital, carbon and service to meet their strategic objectives. Production wheels govern the demand falling on manufacturing facilities to stabilise production plans, improving visibility both up and downstream.
So back to the pesky real world. The world is becoming more interconnected, complicated, and volatile, and market conditions are constantly changing.
How does a production wheel-based plan enable companies to manage the supply chain disruption, which is all too common in today’s post-covid, war-stricken world?
When we first start to work with clients, we find a number of common issues where real-world problems lead to service crises and firefighting. Manufacturers try to compensate for this by introducing longer frozen periods and larger batch sizes. In turn, Sales and Marketing functions increase safety stock durations and over-egg the forecast. The combined impact of these factors is a bullwhip of demand falling on the factory resulting in a large increase in inventory, cost and carbon across the supply chain.
Planning the supply chain based on a production wheel methodology enables good product flow and a controlled way to resolve conflicts when they arise. Twinned with a good planning system that gives visibility of future projected inventories, clients can foresee issues and react before an issue becomes a crisis.
Production wheels, essentially fixed order cycle, variable quantity production templates, mean that fixed scheduling horizons can collapse. Products that are going to be ordered and made are known, but the final quantity decision is left to the last possible moment. This allows production to better align with actual demand and inbound supply to be predictable. Inventory policies are designed with the template in mind and placed to buffer the system from variability – intervention is minimised, and the process is seamless.
In today’s fast-paced and unpredictable business world, companies cannot afford to wait for a perfect world to implement production wheels. Synchronising supply chains using production wheels allows companies to gain a competitive edge by streamlining operations, reducing costs, and improving customer satisfaction. So, why wait for a perfect world when production wheels can help you thrive in the real world? Take action today and start reaping the benefits of optimised production and supply chain management.
If you want more information please feel free to contact me directly in the email below.
Christine.McNeill@SupplyVue.com
