Is Your Supply Chain ‘Ready for Anything’?
MARCH 4, 2020
Over the years we’ve built strong relationships with hundreds of global companies, and we hear the same challenges again and again: they can’t accurately plan for intermittent demand, they’ve got too much capital tied up in inventory, and their planners are overwhelmed by data management and complicated math. In an ever-changing global economy with all its unexpected twists and turns, supply chain leaders are looking for a way to be ready for anything the real world throws at them. That’s why we announced a new brand identity here at ToolsGroup last week: ‘Be ready for anything.’ To us, this encapsulates more than an ideal — it’s an imperative for ourselves and our customers. When we can rapidly and efficiently respond to whatever surprises tomorrow brings, we ensure a higher degree of supply chain stability in today’s interconnected, global world. (And add more dollars to your bottom line.). How? . It boils down to three essential supply chain capabilities: Predict, Protect and Perform. Predict. The ability to predict more behaviors is critical to accurate forecasting. The nuances of demand across items, locations and time frames makes traditional demand forecasting little better than a guessing game. Layer on uncontrollable factors like weather and third-party promotions, and the picture becomes even less clear. . The key to bringing your planning back into focus lies in evolving beyond single-number forecasts. By offering a range of predicted outcomes with varying levels of probability, we give you the flexibility to follow the model, or make calculated trade-offs based on your business priorities. . Protect. The real world doesn’t follow the rules — which is why no prediction will be 100% accurate all the time. The companion to optimized prediction capabilities is the foresight to protect against inevitable surprises. By defining your specific service goals and balancing them against business objectives like minimizing working capital and maximizing profit margins, you can determine optimal levels of safety stock to keep on hand in the event of unanticipated changes. . ToolsGroup’s self-learning platform is continually refining its accuracy, and helps eliminate bias introduced by human decision-making. The algorithm becomes more accurate over time, and safeguards institutional knowledge through its accumulation of data. The use of an automated tool also allows you to react faster to unexpected events and recalibrate your model to reflect changing realities, such as: Sporadic demand and escalating SKUs. New product introductions. Shifting product trends and internet-ignited crazes. Acquisitions and divestiture. Tariffs and trade wars. New partners and channels . Tighter service level requirements. The next S&OP meeting. Perform . Optimizing your predictions and determining the right amount of safety stock to protect against the unexpected gives your operations a solid foundation. By optimizing replenishment cycles and honing the logistics of moving inventory across your network, you can reduce excess inventory and minimize losses stemming from product obsolescence. Be Ready for Anything. What does this look like in practice? . Like beating the world at its own game. Outdoor products manufacturer Thule faced growing distribution complexity and challenges due to the seasonal nature of its products, creating intermittent demand and a slow-moving spare parts inventory. . Working with ToolsGroup and its partner, Optilon, Thule implemented automated forecasting that created a higher-quality demand planning process, and was able to increase service levels from below 80% to 92% over two years in spite of booming sales and SKU growth. In the process, they lowered inventories, and have set a goal of 15% inventory reduction. . Aston Martin, renowned for its luxury sports cars for over a century, faced a challenge when increasing international demand prompted its board to raise first time availability targets for its parts across all car categories from 95% to 97%, without increasing inventory. Already a ToolsGroup customer, Aston Martin approached ToolsGroup with this new goal and within two months had raised service levels to 97.1% and reduced inventory by 18%. The global kitchen and bathroom equipment company, Franke, had grown from a one-person workshop a century ago to an international company with operations in 40 countries. This growth came with a lot of supply chain complexity, with 12 production facilities, four echelons, and over 125,000 SKUs managed through 17 different ERP systems. . Franke was able to integrate ToolsGroup’s planning automation software with its SAP system to unify the planning process and offer better service. Forecast and demand planning time has been reduced by 50%, with greater accuracy and an eight point reduction in MAPE. . Start Today. It’s no secret — with the ability to Predict, Protect and Perform, you can future-proof your business and respond swiftly and efficiently to supply chain disruptions. And that means you’re ready for anything the real world throws your way. Blog Featured supply chain planning