Category archives: demand planning
Back in 2008, companies tried to release cash from inventory reductions to respond to the first recession’s wave. But this had some unintended consequences. Roughly 80% of them ended up with more inventory levels. Why? Because they adopted a quick fix, an opportunistic approach which forced them into silo planning and severe departmental disconnection. How could they have avoided this? When you look back, the answer is simple: Integrated Business Planning (IBP) and Optimization. My colleague Marcel has written about IBP and Optimization before, and walked you through some of its real business gains. In this post, I will attempt to explain why demand modeling and planning is an imperative in the IBP cycle and what the symbiosis between sales and marketing looks like within the cycle. Continue reading »
As we discussed it in our previous blog post on Integrated Supply Chain Optimization (ISCO), with ISCO considerations such as demands, materials and capacities are taken into account simultaneously during Master Supply Chain Scheduling (MSCS). Multiple strategic, financial, demand, supply and delivery scenarios are consolidated into one decision process which respects all restrictions, options and priorities. In an effort to explore how the approach works in a real world case, we explored its application at JBS, a world leader in meat processing. The JBS case revealed that ISCO led to a 25% increase in the company’s gross margin. The approach allowed the company’s sales team to identify opportunities from a margin perspective, fully leveraging opportunities that arise from market situations and production capacity.