Approaches for ensuring reliable raw material supply
High availability and reliability are crucial if a business is to be successful in times like these. So how can companies keep the commitments they make to their customers, safeguard maximum delivery quotas and avoid delivery bottlenecks?
Adopt a predictive and strategic approach to planning raw material requirements
If a company is to optimize its processes along the supply chain, then it needs to plan its resources and capacities on a predictive basis. “Top-class teamwork in product group and supplier management and carefully thought-through sourcing strategies are crucial when trying to maximize security of supply,” says Thomas Neller.
At item, material requirements are planned for an entire year and on a rolling basis. A central aspect of this approach is internal coordination involving all key account managers and sales managers. Thanks to the company’s structures, operational and strategic elements of the business can be closely intermeshed. The situation on the market is continuously analyzed and any developments are dealt with directly. Through this approach, item is laying the groundwork for sustainable procurement.
- Active Management and Suitable Planning Methods
item adopts a collective, interdepartmental approach to developing sophisticated strategies for achieving its corporate goals. Under this approach, sales and operations planning is a useful tool for making sure market needs can be met cost-effectively. It provides an early warning whenever developments in terms of stock levels, capacities and personnel resources start to stray from the annual plan. Managers can therefore take action in good time.
To optimize stock levels on an ongoing basis, item links its CRM system with an intelligent forecasting tool. This involves operations research. Mathematical processes help ensure the right decisions are made in business planning.
- Precise sales forecasts thanks to intelligent software
Special software takes into account historical sales and uses mathematical algorithms to calculate optimum demand and compile precise sales forecasts. This means stock levels can be dynamically adjusted and flexibly managed.
The forecasts are updated every day. Unusual sales volumes are identified quickly and schedulers can take immediate action. “Making sure forecasts are accurate is the key to success,” says Neller. “Combined with the skills of our staff and information from our suppliers, the tool works like a kind of early warning system.”
Simulations can also be carried out quickly and easily, enabling users to check how availability and stock levels will be affected if, for example, a supplier drops out of the picture or a particular article can no longer be delivered. The tool then offers recommendations that are always geared toward safeguarding availability.
- Optimized warehouse stock at all times
The demand calculated at the beginning of the year is continuously evaluated and adjusted. This means the groundwork can be laid at an early stage and the relevant quantities of material ordered. By contrast, short-term planning forces companies to buy raw materials at the latest prices.
Optimized warehouse stocks safeguard the high availability of item products – for the entire year. Fluctuations in stock levels from one year to the next are also taken into account. Moreover, item does not reduce stock levels at the end of the year only to increase them again in the first quarter of the following year.
An important cornerstone of efforts to safeguard supplies of raw materials involves maintaining close and trusting partnerships with suppliers.