Production planning is never easy, but do you have a thought for those in food and beverage where nothing is ever straightforward?
This is the story of Kenny, a production planner who I once met, and number one in a three-part series of stories.
Kenny the planner – Specialty Peppery Salads (SPS)
Kenny glances at the highlighted green cells in his planning spreadsheet and gives a smile of approval as he shuts it down and leaves for home. Production would start making 75% of his forecast tonight ahead of tomorrow’s orders, so all was well.
The first EDI orders arrive. Kenny arrives at his desk and uploads the orders, but something’s wrong and the cells in his spreadsheet are amber, “We are not making enough.” he thinks and begins to re-plan the day.
The pre-final forecasts are in with more adjustments, Kenny enters the figures and there are some red cells now. Kenny looks worried. Things are not going to plan. ”Hi Kenny, how’s it going?” asks Mark. ”Looking forward to the bank holiday?” Kenny responds and asks, “Bank Holiday? That’s next week! Is it always the last week in May?” As he starts opening old spreadsheets and calendars, panic sets in, bank holiday demand is always exceptionally high…
The final orders arrive with the depot corrections, it’s now serious. The weather prediction is for a sunny weekend. “But it’s never sunny,” says Kenny to himself just as Jane pops her head around Kenny’s door. “Did you see ’The food program’ on TV last night? Did us good with their recipes using peppery salad leaves. Business should be great this weekend and that with the promotions we are running…” says Jane as Kenny interrupts, “Promotions? What promotions? No-one told me about promotions.” ”Didn’t you get the email?” she replies.
It’s been a disastrous day. Production did their best but many orders were not fulfilled and with all of the unnecessary changeovers, production yields were particularly low. Worst of all, there may be fines for SPS from the retailers for missing their service levels.
”Still, tomorrow will be different,” Kenny thinks to himself. In the food industry, every day is different. So, just before Kenny heads home, he glances at the highlighted green cells in his planning spreadsheet and gives a smile of approval.
It doesn’t have to be this way
Modern enterprise resource planning (ERP) solutions for food and beverages are designed to provide joined-up data, with advanced planning techniques to account for seasonality, promotions and changing sales patterns. But even these solutions do not deliver everything that a planner requires, so manual adjustment is inevitable.
I once knew a company that manufactured sandwiches. Their main outlet was motorway service stations. They manually adjusted sales forecasts by up to 40% based on whether certain football teams were playing at home or away, to account for the movement of the football supporters. So, local knowledge will always be needed— at least with the integrated information, it is not as risky as planning in a vacuum.
So, what’s next?
Artificial intelligence (AI) is becoming more mainstream. Planning solutions of the future will provide better insights into what is likely to happen to a production plan.
Utilizing data from internal sources like sales, promotions and forecasts is normal today, but with AI, it will be possible to integrate that data with external sources like weather patterns, public events and holidays and then analyze and learn from the resulting effects.
Perhaps AI will provide the planner of the future the ‘holy grail’ where the numbers are better than just an informed best guess.
Connect, discuss and explore using any of the following means:
- Twitter: @ElkinsColin
- Email: firstname.lastname@example.org
- Blog: http://blog.ifsworld.com/author/colin-elkins
- LinkedIn: https://www.linkedin.com/in/colinelkins
Do you have questions or comments about production planning?
We’d love to hear them so please leave us a message below.