Millions of companies use supply chain planning, but many of them are doing it all wrong. As a result, they are wasting cash they could spend on other business tasks. What’s the solution? Adopt a more functional approach to supply chain planning that takes into account individual functions, optimizes costs, maximizes value, and improves the customer experience.
Identifying common supply chain mistakes
Following are three of the most common ways in which money is wasted in supply chain planning:
- Lack of demand forecasting or planning: If you don’t use demand forecasting, you can’t make accurate predictions about your supply chain. It’s as simple as that. The latest digital tools provide you with insights into every aspect of your supply chain, from inventory planning to demand signaling.
- Relying on spreadsheets for forecasting: According to a recent study, 88% of spreadsheets contain errors. This method might have worked a few years ago for supply chain planning, but there is much better technology on the market to help you determine supply and demand, check for material and product availability, and speed up production.
- Old technology solutions: While many older software solutions are better than spreadsheets, they still cannot compete with customizable, configured software applications. These state-of-the-art solutions leverage advanced analytics, machine learning, and artificial intelligence. Old technology tools for supply chain planning are limited and do not provide you with much value past their initial capabilities.
Saving money with a digital solution
When it comes to saving money, you need a proper digital solution for sales and operations planning. This way, you can gauge supply and demand, identify potential risks quickly, and optimize your inventories with a click of a button or swipe of a finger. Even further, cutting edge solutions automatically optimize inventories and balance with constraints.
Utilizing the five-stage maturity model
The five individualized functions of a maturity model (like Gartner’s) can save supply chain executives money and maximize value from their assets. This model does not adopt a holistic approach to supply planning but sees it as made up of several different functions.
Supply chain planning tools, like Vanguard, fulfill the five functions. These solutions facilitate stand-alone, solution-driven, and outcome-driven manufacturing; increase site excellence; and support an integrated manufacturing network.
“By implementing supply chain management systems, businesses are able to reduce waste, overhead costs, and shipping delays in a scientific way,” says the Houston Chronicle. “The benefits of this systematic approach impact areas ranging from product quality to order turn-around times.”
Your supply chain methods could be costing you money. Old, unreliable methods like spreadsheets and out-of-the-box software only hinder business growth. Moreover, if you do not use any forecasting or planning methods, you could jeopardize your business brand.
Using digital solutions, on the other hand, helps you optimize your supply chain and saves money in the process. Request a demo.