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What’s the thread connecting your integrated planning process?
Many companies have evolved from a functional planning scenario to Integrated Business Planning, where various functional plans are knitted together in a unified manner. In a supply chain context, it means that the demand plan, distribution plan, production plan and procurement plan are interlinked with a single thread running through them.
What should this thread be? This question is at the heart of effective supply chain design and performance. If we get it right, various functions will work in harmony. On the other hand, if we get it wrong, the supply chain would underperform in terms of the twin consumer relevant objectives of product availability and product freshness with stress building up at the functional interfaces.
Most companies use the S&OP sales forecast as the unifying thread. However, if you want a more dynamic synchronization of supply with demand, the unifying thread should be actual consumer demand manifesting in the market.