Managing Demand and Operational Capacity to Improve Business Outcomes
A major Australian company found it had poor delivery performance and decided to undergo business process re-engineering so as to better meet the demand and use its operational resources effectively.
A sales forecasting and operations planning business process (SF&OP) was developed to involve all disciplines and deliver the management team one set of numbers to drive business decision making.
The Solution
The current demand was analysed using tools such as SMT’s INSTOC. The products were separated into two groups to increase forecast accuracy; those forecast by history and those by sales and marketing. A stock buffer was subsequently set which would deliver 97% product availability.
The firm’s capacity was analysed to provide an accurate capacity view. A six week capacity planning process was developed with operational personnel.
Capacity was subsequently matched with demand and conflicts were identified.
The Bottom Line
- Throughput has increased
- Product Availability has improved
For More Information download Demand & Operations case study