Strategic forecasting and segmentation as a prerequisite for a resilient supply chain
Our partner, a leading company in the construction industry, focuses on innovation and forward thinking. For more than 70 years, it has been extremely successful throughout Europe in the development, production and marketing of building systems. The group employs staff in 22 countries worldwide. High-quality products are manufactured at locations in Germany and Austria.
The group realised early on that every customer has different requirements and the supply chain must align with these needs. Under the principle ‘Every customer comes first’, silo thinking and troubleshooting along the logistics chain are taboo for this future-oriented group, whose supply chain has been customised for future market requirements and qualitative growth.
Optimal inventory through segmentation and innovative S&OP forecasting
The construction industry is characterised by short-term decisions, in addition to weather-related seasonality. Although the products themselves are becoming increasingly complex and sophisticated, suppliers are expected to be able to deliver at high level with pressure on margins. Together with Supply Chain Minds, the processes along the supply chain were analysed and segmented according to products and customer requirements. In addition to large trading companies, craft businesses are also among the customers. For the former, there is a longer lead time until actual delivery and fixed delivery dates are common practice. Large quantities are ordered, but there are often customer-specific customisations of the standard products. Craft enterprises however usually need the desired goods at short notice. In the course of product segmentation, product groups which were more complex were assigned to a particular customer segment. In this way, a trading company can also deliver, for example, sensitive aluminium products to the end customer in the desired quality through specialised logistics.
In addition to improved operational detailed planning, segmentation enables timely production. The goods are stored where they are expected to be called upon quickly. Fast reaction times are ensured.
Digitalisation and the human component
To transfer existing data into detailed production planning, the Supply Chain Minds team analysed the data and worked with the customer’s project team to create the specification to select a suitable planning tool.
"The best tool is ineffective if you don't keep the employees in mind. That's why the human factor has to be considered sufficiently in every implementation and organisational adjustment," reports Gregor Gluttig, Managing Partner at TenglerGluttig.
Since every change also has an impact on the organisation, clear roles and responsibilities must be defined in addition to adapting processes. It is not only in this case study that sales is organised by national organisations and must be made aware of the necessity of Sales & Operation Planning (S&OP).
"In this project, too, our external view led to a paradigm shift in the company. It was a matter of convincing long-standing employees – and no doubt absolute experts in their field – of S&OP and the accompanying contemporary planning logic," continues Gluttig.
Today, sales planning is determined in regular S&OP meetings and compared with production possibilities. A specially created supply chain department has been integrated into the organisation, where changes in sales are proactively anticipated.
*On Time and In Full
Uniform reports and key figures prevent production bottlenecks. An S&OP plan supported by management leads to reduced inventories, optimal utilisation of production and, ultimately, to a resilient supply chain.
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