In the chemical industry, the average S&OP process has a relatively high degree of maturity compared with other sectors. Nevertheless, chemical companies still face certain challenges when progressing from S&OP to IBP. We distinguish between the two as follows: S&OP is the decision-making process for ensuring the feasibility of the commercial...
S&OP is often pictured as a largely standard process; textbook S&OP starts with agreeing an unconstrained demand plan that is handed over to supply planning who need to ensure product availability. In case of important bottlenecks, the S&OP meeting is the final escalation step in the process, where all remaining imbalances should be resolved. ...
Part Three of this four-parter clarified exactly what DDSCM is and why you should want it. The only question that now remains is how DDSCM can help you in practice.
In Part Two of this four-parter we zoomed in on the importance of the ‘moment of decision’. Preferably, we should make a decision early if the information is reliable at an early stage, and late if it doesn’t become reliable until later. This is not always the case in practice, however, which creates a ‘planning mismatch’. This planning mismatch...
The technology behind bitcoin is gradually finding its way into the supply chain domain; pilot applications of blockchain are hitting the headlines almost every week. For many of these pilot cases, however, it is still hard to see the added value. In my view, the added value of these pilots primarily lies in helping the industry to understand...
Last month, I wrote an article explaining why S&OP/IBP software is currently such a hot topic (click here for the article). Since then, we have had the pleasure of presenting the executive programme on ‘From S&OP to IBP’ at the Rotterdam School of Management (RSM). The RSM session revolved around behavioural operations management. I’ve been...
Demand Driven Supply Chain Management (DDSCM) is becoming increasingly popular – and deservedly so, in our opinion, because DDSCM offers huge potential – but the rate of adoption is still too slow for our liking. One thing holding it back could be the lack of a clear definition of what exactly DDSCM is. This is leading to many different...
In Part One of this four-parter we ascertained that demand-driven alignment is essential to break the service paradox. Although thoughtfully chosen targets and KPIs play an important role in this, they have limited scope. Luckily, there is another factor that you can influence, namely the ‘moment of decision’. In Part Two of this four-parter we...
In our attempts to anticipate future changes in demand, we often depend on forecasts. Unfortunately, however, they are rarely reliable in practice – with all the implications that brings. The ‘good news’ is that we are selling ourselves short, partly because we actually seem to be better off without a forecast in many cases, and also because –...
The bullwhip effect is not only one of the best-known supply chain phenomena, but also one of the most damaging. By increasing the upstream variation and uncertainty, it pushes chain partners ever-deeper into the so-called planning mismatch, resulting in unreliability, inflexibility and inefficiency. The long-held belief has been that...