If you ’ re going to manage your whole supply chain , you can ’ t work on the basis of ‘ demand plan plus guestimate ’. Your demand plan needs to be unbiased , credible , and widely communicated within your organization
immediate suppliers to their suppliers ’ suppliers ... in fact , the whole ‘ end-toend ’ supply chain , including logistics and warehousing space , to model the E2E constraints and reflect the ever-changing environment .
Robust demand plan
If you are to successfully manage your whole supply chain , the two key components that are essential , but often missing , are a robust demand plan and adequate strategic plans .
Many demand plans internally lack credibility . For instance , many corporates have cultures that reward departments who set low targets and then overperform against plan , regardless of the consequences for other parts of the business . In addition , where plans are not reliable , other parts of the business second-guess it – for instance over-ordering stock because of previous systematic under-reporting of demand and over selling .
If you ’ re going to manage your whole supply chain , you can ’ t work on the basis of ‘ demand plan plus guestimate ’. Your demand plan needs to be unbiased , credible and widely communicated within your organization ... and corporate behaviors that undermine accuracy , which invariably stem from senior behavior , need to be tackled ..
Of course , the demand plan isn ’ t just about the short-term . It needs to be for 24-months or more if you are to be confident that your supply chain will cope if you are expecting a rapid demand increase or an acquisition , for instance .
Be prepared
Without this you will not know if your suppliers have the capacity or capability for your future plans given the long lead-in time , for instance for finding new people with different capabilities or buying capital equipment . Given the shortage of warehousing and lead times of up to two years , are your logistics partners going to cope ? Do you know if there is a ‘ gorilla ’ somewhere in your extended supply chain who is vital for you , but not vice versa , that could thwart your plans through withdrawing supply or simply not increasing it ?
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