3 essential planning Processes manufacturers should integrate
In today's rapidly evolving landscape of technological advancements, economic fluctuations, and geopolitical shifts, manufacturers are compelled to be agile and responsive to the unpredictable market forces influencing their businesses. Only those organisations capable of swiftly detecting issues and promptly devising responsive strategies can gain a competitive edge by adapting faster, thus maintaining productivity and safeguarding profit margins.
Integrated business planning stands out as a cornerstone for instilling agility and resilience, especially during challenging times. Whether a global manufacturing giant or a smaller-medium-sized enterprise, a plethora of digital platforms is available to meet diverse organisational needs. The real challenge often lies in knowing where to begin, particularly for smaller enterprises struggling to allocate the requisite skills and resources to transition planning processes onto a digital platform simultaneously.
At Profit&, our team specialises in assisting enterprises migrate their planning processes onto a suitable platform tailored to their needs. Through our experience, we've identified three key processes that can be rapidly migrated to deliver swift value within a manufacturing environment:
- Sales Forecasting and Demand Planning
- BOM explosion & Capacity Management
- Financial and Operational Reporting
The accompanying process map offers a visual representation of the inputs from data, systems, and users loaded onto the platform, the subsequent calculations, and the anticipated outputs.
Sales & Operational Planning Integrated with Financial and Operational Reporting
A crucial factor is to lay the groundwork necessary to establish planning processes on the platform without succumbing to the allure of potential functionalities and complexities these digital platforms offer. A phased migration approach is recommended, with the initial phase focusing on basic integration of data, people, and plans across these critical processes in manufacturing. This approach yields early wins and return on investment by providing visibility into sales and operations plans and their direct impact on the bottom line P&L. Subsequent phases can then prioritise enhancing functionality with individual processes, focusing on those areas offering the greatest potential for additional insights and business value.
Enhanced visibility into S&OP and its effect on the bottom line P&L proves invaluable to leadership in several ways:
- Reduced end-to-end time to create plans: This translates to lower labour costs associated with planning and reporting tasks.
- Less time spent on data preparation: Frees up resources for higher-value activities like analysis and improvement planning, leading to better decision-making and potential cost savings in other areas.
- Removal of spreadsheet models: Eliminates the risk of errors from manual data entry and calculations, potentially reducing costs associated with rework, or missed opportunities due to inaccurate data.
- Improved workflow and collaboration: Streamlined processes and better communication can lead to fast decision-making and increased agility, allowing the company to capitalise on opportunities faster.
- Real-time planning insights: Enables proactive adjustments to plans based on real-time data, leading to improved resource allocation and reduced waste.
- More frequent sales forecasts: Allows for faster and more informed adjustments to pricing and promotions, leading to increased sales and revenue.
- Greater control of capacity: Improved visibility into capacity constraints across the company can help optimise production planning and avoid bottlenecks, leading to increased efficiency and higher output.
- Quick scenario creation: Enables rapid evaluation of various options and their potential impact on profitability, allowing for data-driven decision-making regarding new projects, investments, or strategic initiatives.
- Optimal make/buy choice: Fast and accurate evaluation of new Capex purchases and their impact on financial statements, lead to better-informed decisions about whether to manufacture products in-house, or buy them from external suppliers, optimising costs and improving profitability.
Visibility into sales and operations plans and their impact on the bottom line P&L proves indispensable for manufacturers navigating volatile and uncertain markets. Equipped with reliable insights and effective collaboration, manufacturers enhance their capability to be responsive and agile in the face of unpredictable market conditions.
If you’d like to explore your particular planning needs, get in touch with us today.
If you’d like to explore the subject matter further we can recommend these resources.
Take a look at this guide Navigating Integrated Business Planning: A 10-Step Guide for Manufacturing to learn more about the process of integrating planning processes by adopting a digital planning platform.
To delve deeper into integrated business planning, I recommend exploring this e-book: A Complete Guide to Integrated Planning
