The Cost of Inadequate Planning!
The cost of poor planning is that it could ultimately guide the company into insolvency.
In cases where out of stock problems occur it is important to understand the consequences it can have on the consumer, customer and the enterprise –and the immense importance of changing fast! Putting cost on frequent out of stock through inadequate operations planning is simple –basically it is distinct between a winner and a looser. Frequent out of stock as a result of inadequate operation planning will ultimately cause the company will not have the strengths to survive over the long term. Frequent out of stock will hold back the company to develop winning cultures, market shares, managing its profitable revenue growths, costs and cash-flows. Management time is wasted and it increases pointless add-hock cost in sales, production and distribution and it reduces the sales negotiation powers and purchasing of raw materials powers. Basically, the cost of frequent out of stock is it will ultimately guide the company into insolvency.
Enterprise Recourse Planning
Proactive ERP focus creates huge competitive advantages. Enterprise recourse planning brings together the strategic and tactical planning under one unified planning, information and decision process. Departments and other stakeholders must work in collaboration to align the system capacity and constraints to meet rapidly changing consumer demands.
In a well designed integrated planning system it is known the chain cannot be stronger than the weakest link. Therefore, all the planning initiatives that can affect the products availability, quality, cost and cash-flows are important part of the system vigorous design. Integration means a systematic, a disciplined and a locked-in-time process.
The silo system is too commonly operated where departments and the stakeholders work in isolation instead of working in full collaboration with each other aiming to optimize the service levels at the lowest total cost proposition. An integrated operation planning system focuses on all the core principles aiming to drive competitive advantages. In our case after understanding the integrated planning excellence fundamentals the objective is to transform into a customer in center focused operations organization by leveraging the integrated operations planning strengths to significantly increase competitive advantages.
The best-in-class companies have over time managed to create huge competitive advantages through execution of their proactive ERP systems focus. In many companies operations have been managed in the blur for far too long time –for most companies it is time to bring their secret values to life through establishing proactive Enterprise Recourse Planning.