{"id":10512,"date":"2022-10-25T11:46:54","date_gmt":"2022-10-25T18:46:54","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=10512"},"modified":"2022-10-25T11:48:48","modified_gmt":"2022-10-25T18:48:48","slug":"trick-or-treat-the-supply-chain-wears-disguises-too","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2022\/10\/trick-or-treat-the-supply-chain-wears-disguises-too","title":{"rendered":"Trick or Treat! The Supply Chain Wears Disguises Too"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10513″ img_size=”full”][vc_column_text]Autumn has arrived here in the US, which means crisp air, the vibrant colors of the fall foliage, and of course, Halloween. One of my favorite things about Halloween are the costumes. Many people use the occasion to wear a disguise and take on a different persona for the day. It is fun to try and figure out who the person behind the mask is. But Trick-or-Treaters are not the only things that wear disguises. Your supply chain can also \u201cwear disguises\u201d from time to time.<\/span><\/p>\n

How is this so, you might ask? Today, almost any business involved in manufacturing and distribution across all vertical segments are experiencing disruptions that are causing issues in their supply chain operations. Unfortunately, these issues often present themselves as one type of problem, when in reality they are a problem of a completely different nature. In essence, the issue is wearing a disguise and it takes a little work to determine the true identity of the problem with the goal of coming up with a solution to resolve that problem.\u00a0<\/span><\/p>\n

Seeing Through the Supply Chain Disguises<\/span><\/h2>\n

I was recently part of a <\/span>LinkedIn Live session<\/span><\/a> with two of my colleagues, Laura Monroe and Charlie Marge, where we introduced the topic of Supply Chain Disguises and how manufacturers today are trying to \u201cunmask\u201d the imposters. The <\/span>supply chains of today<\/span><\/a> are more complex than ever and are under siege by varying degrees of disruption and challenges. Manufacturers often have to deal with multiple supply chain issues at the same time. At first glance, one might think a problem is caused by one issue when in reality, the cause is something completely different, which complicates things further.<\/span><\/p>\n

Charlie brought up a very common issue where a manufacturer thinks they do not have enough capacity. The face value of the problem might be that the company cannot meet its forecasted demand, so action is taken to fix that issue. The supply chain disguises that issue as a lack of <\/span>production capacity<\/span><\/a>. This commonly occurred during the pandemic as the demand of many consumer packaged goods products changed due to <\/span>changing consumer preferences<\/span><\/a>. The product mix changed and manufacturers saw that they had to reschedule labor and alter their sequencing to fit the demand into the available capacity. With the right planning process and tools, they determined that what presented as a shortfall in capacity was simply an issue of production balancing. An improved production planning process with a tool to automate the process to evaluate alternatives unmasked the disguise and demand was then able to be met.<\/span><\/p>\n

A Transportation Issue or Forecasting Issue?<\/span><\/h3>\n

The <\/span>pandemic served as a great learning environment<\/span><\/a> for many manufacturers in many sectors in terms of problems disguising themselves as different issues altogether. Grocery food demand went through the roof as more people ate more meals at home. People spent much more time at home, putting weekend trips, sporting events and social experiences on hold. People were more prone to wanting to do at-home activities, so they started home improvement projects, home office renovations and in-home entertainment activities. This put an exceeding amount of extra demand on the building supply and consumer electronics industries. In addition, the value chain had to transition from the traditional brick-and-mortar stores to online marketplaces, as many countries and cities had restrictions on which business establishments were able to stay open. Online buying soared and home delivery of goods more than tripled, resulting in more distribution points that need service.<\/span><\/p>\n

Manufacturers thought they had a transportation issue of shipping to the wrong location but in actuality, they had an item location forecasting issue.<\/span> Manufacturers focus on channel and product forecasting but in today\u2019s environment, the focus has to extend to the location or distribution point issue. The problem is the forecasts at the distribution points are off, not delivering to the wrong place. Thus, another disguise. But now, here is the best part of this problem. The problem of inaccurate forecasts at the item location level, which initially announced itself as a transportation problem, will cause you to have to redistribute inventory to different locations which could cause you transportation issues. Talk about disguises.<\/span><\/p>\n

A Production Capacity Issue or Balancing and Production Mix Issue?<\/span><\/h3>\n

Charlie and I then picked back up on the production capacity issue. Charlie brought up that many times, when manufacturers think they have a capacity issue, it is really a balancing and production mix issue. Production planning is a critical component of managing the supply chain. It ensures that production capacity at manufacturing facilities is used in its most efficient manner. The sequencing of products and fine-tuning of production run times based on demand can easily stretch and free up capacity. What was originally thought of as a capacity issue was actually a production planning issue. Manufacturers need to unmask this issue and determine their true identity sooner rather than later to ensure the right product gets to the right place at the right time.<\/span><\/p>\n

A Promotion Planning Issue or Excess Inventory Issue?<\/span><\/h3>\n

Another common issue that appears as one type of forecasting issue is promotion planning and forecasting. In today\u2019s world of rapidly changing consumer preferences and cost-conscious buyers fearing inflation and a recession, manufacturers and retailers need to run promotions to boost sales. Promotions are implemented and forecasts of the promoted products are run through all levels of distribution, production and supply planning. When all is said and done, evaluations are performed and it is determined that the promotion was a success and sales did in fact increase. However, it is determined that the company now has an excess inventory issue of those products that were not put on sale. The issue is product cannibalization, and while promoted product forecasts were increased, non-promoted products were not decreased. So a problem of a sales issue is simply a disguise of poor overall forecasting. Another disguise.<\/span><\/p>\n

Unmasking the Real Supply Chain Issues<\/span><\/h2>\n

Laura then made a very good point and followed it with an even better question. Many supply chain issues are disguised as other issues, so what are some things a manufacturer can do to unmask these issues sooner and minimize major issues to the organization?<\/span><\/p>\n

Determining the true identity of an issue that impacts your supply chain and overall operations is critical for business profitability and <\/span>long-term sustainability<\/span><\/a>. Processes need to be in place to quickly analyze issues and determine the true cause as well as to come up with cost-effective solutions. There are quick fixes and long-term solutions that can work. One in particular that can start providing short-term benefits as well as having long-lasting benefits is that of an integrated <\/span>Sales and Operations Planning (S&OP)<\/span><\/a> process that becomes everyone in the organization’s mindset. Typically, the S&OP process was considered beneficial for only strategic planning. But, implemented and used properly with the right corresponding technology, a sales and operations planning philosophy can solve tactical and execution problems just as well, if not better, than strategic issues. Many facets of Sales and Operations planning are easy to get in place while implementing the entire concept as your business philosophy and long-term process. See, another disguise. Trick or Treat.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10513″ img_size=”full”][vc_column_text]Autumn has arrived here in the US, which means crisp air, the vibrant colors of the fall foliage, and of course, Halloween. One of my favorite things about Halloween are the costumes. Many people use the occasion to wear a disguise and take on a different persona for the day. It is fun […]<\/p>\n","protected":false},"author":35,"featured_media":10513,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,2045],"tags":[2399,1191,2401,544,98,2398,2400,175,174,92,2397,517],"class_list":["post-10512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-supply-chain-trends","tag-balancing-and-production-mix","tag-consumer-preferences","tag-excess-inventory","tag-forecasting","tag-halloween","tag-production-capacity","tag-promotion-planning","tag-sop","tag-sales-and-operations-planning","tag-supply-chain","tag-supply-chain-disguises","tag-transportation"],"yoast_head":"\nTrick or Treat! The Supply Chain Wears Disguises Too | QAD Blog<\/title>\n<meta name=\"description\" content=\"Many supply chain problems are disguised as other issues. 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