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How should we handle frequent changes in Supply Chain plans?
Many supply chain teams start their production, procurement, deployment planning from the monthly demand plan agreed at the S&OP meeting. However, they find that actual sales are quite different from the demand forecast, requiring them to modify and refresh all the plans on a frequent basis.
If we want a smooth-functioning supply chain, which synchronises supplies with actual demand on a continuous basis, we must establish a strong feedback loop by sensing the actual demand and suggesting changes to the production, procurement and deployment plans.
I have often heard that the back end teams resist such frequent changes. How should we tackle it? There are two options.
The first option is to ignore the actual demand, do away with the feedback loop and continue operating in ignorance of reality.
The second option is to help the backend teams develop strong capabilities for quick response, so that they don’t resist the changes.
Which option would you prefer?
Which option is currently operating in your environment?