Planning excellence is the lever for a cost-optimized supply chain alignment

Restrained market development and structural changes in the traditionally important customer industries pose great challenges for companies in the metal industry. The smaller the opportunities on the sales side are, the more important it is to look inwards – cost efficiency is key!

Excellence in planning and control processes is a necessary condition for keeping costs under control along the supply chain. To achieve this, the processes need to be fully interconnected, as this is the only way to make planning decisions with the highest possible transparency, speed and minimum amount of work.

The B&C approach to developing excellence in planning focuses on the integration of the relevant planning and control processes across all planning levels. The aim is to establish robust and reliable planning processes that enable active cost management in day-to-day business and at the same time support the strategic reorientation of the company.

For a costoptimized alignment of the supply chain, structural shifts in demand, such as those currently occurring on the customer side, have to be registered and processed in Sales & Operations Planning. The basis for these planning processes is high-quality sales planning that considers market trends, political developments, etc. With a well-structured process and high-performance IT support, all input data is prepared, possible scenarios are created and thus a basis for decision-making is available for the operational plan. For example, it is possible to assess how the (temporary) shutdown of aggregates, individual production routes or entire sites and thus the bundling of residual demand on the most cost-efficient plants will affect the operating result of the company and its delivery capability. The reallocation of material flows in the network also offers the opportunity to reduce inventories at various stages of the value chain and thus has a positive impact on cash flow.

The integrated approach requires from all parties involved in the process to ensure that planning decisions once made are consistently enforced at all levels. This means in order management, the material flows defined in the S&OP and the sales quotas derived from them reflect this approach. In procurement planning, for example, this would materialize as order points that need to be adjusted based on the realigned supply chain or supplier management being restructured. In operative production planning, the synchronization of product-related routings for determining order-related delivery dates is an expression of the integrated planning approach.

Once the integrated planning structure has been set up, sound and reliable basic data must be available for determining decision alternatives across all planning levels. A structured master data management with the aim of data availability, consistency and transparency has to be a central aspect of an integrated planning approach.

Conclusion

Excellence in planning requires a complete integration of all planning levels, which ensures the necessary transparency for strategic decisions as well as the controllability of the supply chain. This enables tapping into cost reduction potentials in the value chain in a targeted manner.

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