High-growth manufacturers can take the guesswork out of inventory and production using the right tools to model, plan, and predict
Of the many lessons learned from 2020, companies counted the need for better supply chain management as one of them. Amid a global pandemic, consumer demand dipped, spiked, and shifted numerous times and in several unforeseen ways. In fact, 70% of supply chain decision-makers reported that COVID-19 proved to be the most significant impact on their supply chain. This resulted in component shortages, overstocked inventory, and disruptions in manufacturing. And Global supply chain management volatility impacted more than just the ability to produce. Customer loyalty and retention diminish when businesses struggle to meet demand and deliver in a timely fashion.
For many supply chain managers, their Enterprise Resource Planning (ERP) system wasn’t up to the challenge. Simple MRP-based systems can’t respond to volatile swings in resource planning, fulfillment, demand planning, and reverse logistics. Many companies have never before realized that they are part of a global logistics/digital supply chain.
The logisticians, purchasing managers, and manufacturers realized that the fragility of their supply chain model was based on unconstrained inputs and processes. Typical MRP-based systems make assumptions that any capacity constraint is fixed and can be addressed by simply adding more resources.
Managers that used a different approach called Advanced Planning and Scheduling (APS) tools had a different experience. This approach performs a fast mathematical optimization through your entire supply chain system to generate a production plan that manages all material constraints, lead times, and machine or other capacities.
Supply chain and Operations management leaders can quickly identify bottlenecks, materials shortages, and other obstacles, giving them an accurate picture to realign and optimize alternative plans.
One of the best of these tools, frePPLe, can be installed as an “Add On” to Odoo. And frePPLe’s algorithm offers planners alternative scenarios, including:
Specifically, using frePPLe as part of Odoo ERP implementation, companies can build resilience into their planning to act with speed and confidence, developing plans targeted for the present yet ready for the future. Accurate visibility is expected late delivery of sales orders also enables transparent communication to customers.
- Alternative manufacturing routes
- Alternatives production, using different machines ( or outsourcing)
- Alternative suppliers for key materials or components
- Leading to alternative scenarios such as choosing to make an item, ship from an alternate warehouse, or purchase from a different supplier. You are empowered to make the best choice based on priority rules, total cost rules, or a penalty rule.
The holistic approach
The Pandemic revealed that many companies need a more resilient supply chain. These organizations rely on outdated methods for their sourcing strategies. But these methods, which can consist of whiteboards, sticky notes, and spreadsheets, fail at using data to anticipate needs, bringing planners and vendors together, or adjusting to real-time changes in the market.
Let’s consider what this approach might mean for your business.
Invariably, businesses need to bring together data and employ the right tools to improve flexible forecasting. These businesses need a holistic approach. Odoo’s open source business management software meets these needs. And Odoo combined with frePPLe provides advanced forecasting and planning capabilities to make smarter decisions faster.
The good news for companies is that they can leverage tight integration and standard interfaces to exchange data between both systems because of the freedom and flexibility coming from open source. Moreover, the frePPLe Odoo add-on module can be easily tailored to fit your Odoo configurations and customizations. Organizations leverage enterprise data with applications that combine data from the different business units.
A resilient production plan
The continually changing global markets of 2020 resulted in companies recognizing the immense need to improve every aspect of planning. Open source provides a perfect framework to bring advanced planning capabilities to companies of all sizes because of its open code and flexible nature. Rather than changing the business to meet proprietary software, companies can adapt the software to their specific industry, business, customer, and geo-centric needs.
This open source supply chain management system supplies a centralized approach to monitor operations in real-time. This helps with procurement and sourcing of raw material, manufacturing process, and logistics and shipping activities using a single, integrated solution. As a result, companies can achieve an integrated business plan that is optimized and predictive, even during a time of disruption.
Demand planning
With better visibility across the business, organizations gain insight using integrated sales, customer, and product data to evaluate current needs and assess future trends. Sales and planning teams can edit and fine-tune forecasts using statistical models that estimate the stock volume and sourcing needs. Moreover, data can be visualized to provide an intuitive means of understanding. With a complete data picture, staff can quickly identify demand exceptions and outliers to improve forecast accuracy.
Inventory planning
You can use data and tools to plan inventory by calculating order frequencies and quantities based on several attributes. A data-driven approach reduces both overstocking and stock-outs by ensuring you only order items when you need them and place reorders in a timely fashion. You can customize controls based on specific criteria, whether it involves seasonal selling, new market growth, or an increase or decrease in sales. You can also more carefully assess your stock in real-time.
Production planning
Companies can develop detailed capacity production plans and schedules based on staff, material availability, lead times, and resource capacity. This results in faster order completion and a reduction in delays. Variables such as setup time, machine status, and operator availability can be taken into account to boost production. Moreover, modeling capabilities allow for generating “what if” scenarios to compare and contrast different planning options, simulate best and worst-case scenarios, and evaluate impacts such as rush orders, machine breakdowns, or overtime.
The results of smarter planning
Companies that run the right enterprise systems, including the right supply chain management tools, stand to drive better business outcomes. They can generate and adjust plans on the fly using real-time business intelligence. As a result, numerous benefits occur.
Increased output: Using a holistic approach to planning, companies can more accurately identify the materials and inventory needed to ramp up, or in some cases slow down, production as quickly as possible. They can also identify bottlenecks—whether it’s equipment, staff, or sourcing—to make better business decisions. This can include when to carry excess inventory based on supplier disruptions or open new manufacturing lines.
Improved efficiency: Having the capacity to access and analyze data, innovative product strategies, and streamline workflows improve how companies operate to current and future needs. They can use data to adjust dynamically to fluctuations in demand, emerging markets, and disruptions to customer demand or the supply chain.
Lower costs: Improvements to production reduces waste, and better inventory controls optimize storage. By employing an ERP solution with supply chain management tools, you gain a level of data-driven responsiveness to customer requirements. You also enhance relationships with vendors and distributors, leading to better service agreements.
Increased profits: When you open up your business to state-of-the-art technologies and achieve better collaboration between different business areas, it will improve productivity, leading to increases in your business profits in the long-run. Happy customers transform into loyal customers. Lean manufacturing produces more significant margins. And accurate sales forecasts help allocate resources that improve the bottom line.
The right partner to achieve real results
The Pandemic ushered in a new era of change for businesses and people, communities, and nations. Specifically, companies that want to survive and thrive moving forward must adopt the new business models that cater to unpredictable markets; in other words, they need to build resilience into everything they do.
Companies that design and implement enterprise systems, such as Odoo open source ERP, can quickly improve business workflows using integrated data that supply a clear, consolidated view of the business. With the right tools, like frePPLe, they can build resilience into their supply chain and demand planning.
And with OSI, they can rely on a trusted partner, whether you want to extend your existing open source ERP solution to improve production or you’re interested in learning more about implementing a new enterprise system. OSI’s tested and proven professional services help identify and design technology solutions and business management strategies that simplify, shorten, and enhance all types of workflows. With deep expertise and experience working in both Odoo and frePPLe environments, you’ll have best-in-class consultants to help optimize your supply chain and build resiliency into your organization.
The Pandemic ushered in a new era of change for businesses and people, communities, and nations. Specifically, companies that want to survive and thrive moving forward must adopt the new business models that cater to unpredictable markets; in other words, they need to build resilience into everything they do.
Companies that design and implement enterprise systems, such as Odoo open source ERP, can quickly improve business workflows using integrated data that supply a clear, consolidated view of the business. With the right tools, like frePPLe, they can build resilience into their supply chain and demand planning.
And with OSI, they can rely on a trusted partner, whether you want to extend your existing open source ERP solution to improve production or you’re interested in learning more about implementing a new enterprise system. OSI’s tested and proven professional services help identify and design technology solutions and business management strategies that simplify, shorten, and enhance all types of workflows. With deep expertise and experience working in both Odoo and frePPLe environments, you’ll have best-in-class consultants to help optimize your supply chain and build resiliency into your organization.
Want to learn more about how to improve your supply chain management with open source solutions? Contact us today.
About the author:
Greg Mader is the founder and president of Open Source Integrators (OSI), a global leader in open source business consulting and IT services. He’s an Army Veteran and entrepreneur, adept at managing large teams and complex projects, delivered on time and budget. His background includes leading and developing large and small teams, with a focus on communication, mission relevance, and improved deliveries. His expertise spans across strategic planning, project management, ERP, GIS, and other enterprise technologies.
