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Frequency of execution planning is a key determinant of supply chain agility.
Supply chains execute three different activities on a daily basis – moving finished goods stocks across various nodes, scheduling production, and scheduling component deliveries. All these activities need to be planned meticulously.
If we look at the way companies plan these for daily execution, it gives us a pretty good insight into the agility of their supply chain.
Many companies, using sophisticated planning software, plan these three on a monthly basis, taking the monthly S&OP / IBP forecast as the basis - stock movements through DRP, production scheduling through MPS and component delivery schedule using MRP. These companies have a long way to go to make their supply chains agile.
More agile companies plan the distribution on a daily basis considering actual sale of various items, leaving their production scheduling and component delivery scheduling on a monthly basis.
Still more agile companies plan their distribution and production schedule on a daily basis, but the component delivery schedule continues to be monthly.
The most agile companies plan their distribution, production and input materials on a daily basis, triggered by the sales pattern.