Supercharged Supply Chains

CHAPTER 13External Sourcing and Supplier Planning: Reaping the Benefits of Valid Scheduling

In the Demand Planning chapter, Chapter 10, demand planning was identified as the most challenging of all the Business Excellence Planning activities because it requires looking into the future and predicting what customers will be buying. Nevertheless, it is an essential task in running a business. With Unparalleled Business Planning and Execution Practices, demand planning processes are superior to simply looking at history or just guessing. The most troublesome of all planning activities can be procurement, represented in Figure 13.1 as External Scheduling. Tracing Figure 13.1 down from Integrated Business Planning to Master Scheduling to Material Requirements Planning to Capacity Planning, you finally arrive at Internal and External Schedule. That means that absolutely any errors or changes at any level in these prior planning activities caused by inaccurate data or human error fall on Procurement to react to and deal with.

FIGURE 13.1 Business Excellence Planning

To make it worse, all manufactured parts and products begin with a purchased part or materials (the lowest level of every bill of material is a purchased item). So, not only must Procurement be aware of everything that is happening in all planning levels, but also be aware of what is happening or failing to happen in ...