Are you using advanced planning systems (APS) in your procurement strategy? According to survey conducted by XYZ Research, procurement, supply chain planning, implementing APS yields a whole host of benefits, including:
- 20% increase in production efficiency
- 30% reduction in lead times and cycle times
- 15% reduction of inventory carrying costs
- 25% decrease in stock-outs
The necessity for such advanced systems has come to light in the business landscape since the recent onslaught of disruptive events. From the challenges posed by the pandemic to recent global crises like the Evergreen blockage in the Suez Canal, and geopolitical tensions spanning from the war in Ukraine, the just-in-time model no longer suffices.
Additionally, the looming threat of climate change and its associated severe weather events further accentuates the need for resilience in supply chain planning.
In response to these challenges, businesses are increasingly embracing Sales and Operations Planning (S&OP) as they prioritise resilience.
While digital tools can play a role in enabling S&OP, it is equally important to emphasise the role of effective planning and communication to create cross-functional cooperation. Chris Foord, partner at Argon & Co New Zealand gives an example of the importance of cross-functional alignment, “If the sales team understands the capacity constraints of a particular shipping lane, they can manage customer expectations and prioritise demand as necessary rather than just processing as many orders as possible. Equally, if a procurement team understands the requirements of a new product line launching, they can ensure the resources are available in time, allowing the sales team to process orders as soon as the product is launched.”
Are you currently leveraging the power of S&OP within your organisation, or are you interested in exploring its potential? Our team of procurement experts are ready to guide you through the process, helping you unlock the full potential of advanced planning systems and navigate the complexities of today's business landscape with confidence.
Source: https://www.deskera.com/blog/advanced-production-planning/
