Supply Chain Planning
Putting the pieces back together again
Like many companies, you’ve worked aggressively to take costs of out of your supply chain. A common approach is to examine each component of the supply chain à la carte and move to lower cost alternatives. As a result, you likely now source materials from low cost countries, rely on contract manufacturers for subsets of products and use third-party logistics providers for delivery – fragmenting your supply chain across companies and around the world. Meanwhile, your customers demand low inventories and high in-stock performance, which requires a synchronized flow of goods.
In Supply Chain Planning, we work with clients to develop strategies, define future solutions built on leading capabilities and implement process and technology solutions. We’re as strong in helping clients execute a plan as we are in crafting it. Because of our experience and global reach, we don’t begin a project with a blank slate – rather, we know which 40 decisions will drive 80 percent of the necessary work. These decisions, along with pros and cons behind each lever we’ll pull together, are captured in Deloitte’s Supply Chain Planning Innovation Template. This template provides the foundation for designing leading capabilities into your supply chain and accelerates the time to benefit. Learn more about the offering.
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Meet our people
- Ken Olsen, Director, Deloitte Consulting LLP
- Customer Strategy
- Deloitte Analytics
- Global Benchmarking
- Logistics and Distribution
- Manufacturing Strategy and Operations
- Product Development
- Sourcing and Procurement
- Supply Chain Strategy
- Supply Chain Transformation
Learn more about the offering
Take a breath – and a broader view
So how can you knit a complex supply chain back together again? Good advanced supply chain planning can keep the pieces, and the numbers, in sync. Working from a clear, top-down plan, you can focus and sequence your efforts – so that critical areas like demand forecasting and inventory planning get the attention they need to drive improvements elsewhere. When forecasting works, then roles and responsibilities can fall into place. When lines of communication are open, competing views of demand can be reconciled and news of change can reach the supply chain in time to make a difference. When inventory planning works, partners in the supply chain optimize all inventories – finished goods, critical components and raw materials – to effectively meet and respond to demand. And while large-scale transformation is often important, short-term actions can often drive big gains in working capital too.
We’re seeing leaders move beyond pursuing functional excellence in supply chain planning to embedding this capability as an integrated part of overall strategy and operations. No longer custodians of the sales and operations planning (S&OP) process, these supply chain organizations have become central players in their company’s integrated business planning efforts. They serve as a hub – integrating sales, marketing, operations and finance plans into an aligned enterprise view of demand that guides all aspects of the company.
How We Can Help
In Supply Chain Planning, we work with clients to develop strategies, define future solutions built on leading capabilities, and implement process and technology solutions. We’re as strong in helping clients execute a plan as we are in crafting it. Because of our experience and global reach, we don’t begin a project with a blank slate – rather, we know which 40 decisions will drive 80 percent of the necessary work. These decisions, along with pros and cons behind each lever we’ll pull together, are captured in Deloitte’s Supply Chain Planning Innovation Template. This template provides the foundation for designing leading capabilities into your supply chain and accelerates the time to benefit.
At Deloitte, we realize the importance of combining deep process and technology experience with practical business strategy. With access to a highly ranked range of capabilities across consulting, financial advisory services, tax and risk management worldwide, we take an integrated approach that helps us see ways companies can use their supply chain operations to deliver more value across the business.
Our services include the following areas:
- Supply chain planning capability assessment and opportunity identification
- Integrated supply chain planning strategy, vision and conceptual design
- Supply chain planning process, technology and organization design covering the following areas:
- Sales and operations planning
- Demand planning (including collaboration with customers)
- Product lifecycle planning
- Supply planning (including collaboration with the extended supply chain)
- Inventory planning
- Supply chain flexibility
- Supply chain planning performance management
We help transform our clients’ business, generating benefits such as:
- Reduced inventory levels by up to 10 to 30 percent that can free up cash
- Improved customer service
- Reduced cost of goods sold of 5 to 20 percent
- Reduced cut orders by as much as half
- Improved forecasting ability and responsiveness
- Reduced planning cycle times
- Identified potential self-funding of related business investments
Six ways to get more value now
Here are a few things we’ve learned helping companies in their efforts to address their supply chain challenges.
Let capabilities drive inventory requirements. Don’t rely on standard policies to drive inventory levels. Instead, determine what your supply chain capabilities are for different product segments and locations, and incorporate them into your inventory planning. Determine which capabilities will have the largest impact on inventory and define initiatives to drive improvements.
Align behind one plan. Sales, marketing, finance and supply chain teams all need to follow the same plan using a shared view of demand. Effective inventory management begins with cross-functional alignment.
Manage what matters. Focus on the customer and product segments that have the biggest impact on your business. Give each one its own inventory management strategy, and use performance management processes to make sure those strategies are delivering the results you intend.
Sense and respond. Understanding rapid marketplace changes and responding to them quickly can have a big impact on revenue and working capital. It’s also important to have a supply chain that can respond quickly and efficiently when demand increases or decreases.
Look beyond your walls. Supply chain inputs extend well beyond any single business, touching partners, vendors and other third parties. Improve collaboration with your trading partners, such as customer and suppliers, to strengthen their ability to meet demand.
Balance trade-offs. Two large drivers of supply chain costs – inventory and manufacturing – tend to be at odds with one another. Companies that can bring them into balance are able to both improve costs and meet demand
Supply Chain Planning in action
- A multi-billion-dollar food manufacturer engaged Deloitte to help identify and execute a set of quick-hit inventory reduction and customer service improvement opportunities. The company also needed interim tools to improve and support demand planning, sales and operations and inventory management processes and process design to complement new system implementation. The company got $50 million in cash flow benefits in the first year of the program while maintaining 99 percent service levels.
- A global telecom infrastructure supplier was struggling to meet its strategic goals for sales, operating income and inventory levels. An assessment across the supply chain identified potential benefits in several supply chain planning initiatives. The project improved service from 65 to 85 percent, improved forecast error by 20 percent and delivered more than $4 million in initial savings over three months.
- A consumer products manufacturer with multi-billion dollar global annual sales asked Deloitte to help identify planning improvement opportunities throughout its supply chain: sales and operations, demand, inventory management, supply chain flexibility, supply and performance improvement. Over a three-year period, we helped the client improve working capital by more than $400 million and improve service over 98.5 percent.
As used in this document, “Deloitte” means Deloitte & Touche LLP, which provides audit, assurance and risk management related services, Deloitte Consulting LLP, which provides strategy, operations, technology, systems, outsourcing and human capital consulting services, Deloitte Tax LLP, which provides tax services, and Deloitte Financial Advisory Services (FAS), which provides financial advisory services. These entities are separate subsidiaries of Deloitte LLP. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.