Dealing with increased organic demand in the supply chain

The last few years has seen an incredible 80% rise in demand for organic and non GMO food products.

Consumers are waking up to what’s in their food and are demanding high quality produce without pesticides or genetically modified ingredients. This demand is set to rise further, with more companies being forced into sourcing non GMO and organic ingredients for their products.

organic-food

 

What does this mean for the supply chain?

The increase in demand for organic produce can put a strain on an organisations supply chain. This comes down to the need to get ingredients from the farm to the factory more quickly than foods that have been preserved or genetically modified in some way.

Some companies are opting to source organic and non GMO products from certified supplies but this is not a viable alternative for all organisations. Instead, many businesses are looking towards other non GMO and organic proteins to use in their products.

These ingredients include peas, which are high in starch and free from allergens, or rice bran, which can be made into a source of fibre, protein and into oil. With these ingredients being easier to source than other organic and non GMO products, it is having a much smaller impact on their supply chains.

 Rethink your Approach

Nonetheless, many companies are still facing supply chain issues and are being made to rethink their approach in a range of areas such as:

  • product acquisition times
  • distribution
  • warehousing

Unfortunately, finding the time to rework your supply chain, alongside trying to keep up with the increasing demand for organic food isn’t always possible.

To combat the problems that come with an increase in demand, many organisations turn to supply chain and logistics specialists to help them combat the issues.

Supply chain consultants can help your businesses source non GMO and organic produce more efficiently and if needed, can find products that are traceable right back to the farm.

 Coping Strategies

The rise in demand has for organic and non GMO has caused an even bigger rise in the production of these ingredients by farmers and suppliers.

apple-harvest

However, distribution time from these areas is still one of the biggest problems for organisations looking to use organic ingredients. To tackle this, supply chain specialists can advise on coping strategies for perishable ingredients and develop tactics to help minimise wastage and speed up distribution times between warehouses.

Increased customer awareness means that there have been big changes within the food industry and this not set to slow down any time soon. Ensuring your supply chain can cope with the transition to organic and non GMO is vital for the future successes of your business and will give you the competitive edge you need to stay profitable.

For help optimising and reducing risks in your supply chains talk to Total Logistics supply chain consultants.

3 Mistakes to Avoid in Sales and Operations Planning (S&OP)

Sales and operations planning (S&OP) is now considered to be one of the important processes within successful supply chain management.

sales and operations planning

It is essential to ensure the smooth running of a business both in the short and long-term and helps companies balance:

  • supply and demand
  • costs
  • customer service

A good S&OP process will undergo many years of regular improvement with adjustments to maximise sales and productivity within different areas of the organisation.

Whether you are just starting out with your planning or looking to improve these are three major mistakes to avoid in S&OP.

1. Not getting the balance right

This is one of the most important things to get right in S&OP, yet so many businesses get it very wrong.

Finding the right balance of supply and demand is crucial to your success. Produce too little and both the sales team and the consumer is left feeling let down, but produce too much and you are left with goods that cost you warehouse space and may need heavy discounting to shift.

Equal importance should be placed on both the sales and operations areas of your business if you want to achieve a harmonious supply chain.

2. Planning for just one outcome

Never plan for only one outcome.

It has been an S&OP rule for many years to work towards the ‘one goal’ – a business’s ultimate ideal ending. Unfortunately, this just simply isn’t viable and not only does it diminish the importance of your executives it can leave you in hot water if things go wrong.

It’s an S&OP executive’s job to mitigate risk and plan for alternate outcomes, just in case the supply and demand does not follow the path it is supposed to.

Don’t make the mistake of planning for something that can often be inconsistent, always plan for both positive and negative alternate results.

3. A lack of engagement across the board

Another one of the biggest mistakes businesses should avoid in S&OP is the inability to engage with all areas of the business.

The entire reason good S&OP is crucial to an organisations success is because if done correctly, it enables the entire business to move in the same direction. Despite this fact, many companies still fail to understand the importance of communication.

Whilst operations would want to see results in units, finance is more likely to need information in the form of net margins.

Being able to communicate plans in a way that sales, operations and finance can understand will ensure that they are more involved in the S&OP process and can help to create a smoother supply chain.

These are three obvious but common mistakes that businesses fall down on when it comes to S&OP. However, alongside correcting these mistakes, it’s important to always regularly check your S&OP process on a weekly to monthly basis to ensure that calculations and forecasts are heading in the right direction.

Fluidity is vital in business, so you need to be doing everything you can to improve the flexibility of your supply chain today.

Getting expert and independent help with your S&OP can not only make sure you avoid common mistakes, but also ensure you have workable plans both from today and into the future. Visit Total Logistics to find out more.

Cross-Departmental S & OP Issues

Sales and Operations Planning (S & OP) is a simple business system: look ahead and plan accordingly.  The complexity comes in as planning requires cross-departmental cooperation and support. When conflicts arise it can be a serious set back.

Sales and Operations Planning (S & OP)

Do you have Cross-Departmental issues with your Sales and Operations Planning

For example:

  • Demand Forecasting requires input from Sales and Marketing departments
  • Capacity planning involves Operations
  • Ordering on suppliers involves Purchasing & Financial Planning
  • Reaching a consensus forecast requires agreement from all of them

Sales and Operations Planning seems to be one of the most difficult business disciplines to make stick, especially in medium sized organisations.

However effective S&OP joins up your organisation to ensure that customer service levels are maintained, while inventories and plant capacity are optimised a key requirement of business success, so it’s worth the effort to make it work.

For independent help and support in sales and operations planning talk to Total Logistics the complete supply chain consultancy www.total-logistics.com

So What is S & OP?

Sales and operations planning or S & OP is a structured forum and its related process for communication and decision making relating to supply and demand.

S & OP MeetingsThe main goal is for the decision making team to continually strive for and optimise the operational functions of their organisation, which can include:

  • Product development and marketing
  • Customer development and sales
  • Finance
  • Product supply

In addition the S & OP process includes the following updated plans:

  • Sales plan
  • Production plan
  • Inventory plan
  • Customer lead-time (backlog) plan
  • Product development plan
  • Strategic initiative plan
  • Resulting financial plan

Decisions at the Right Time

Timing is key as all S & OP decisions need to be taken at the right time and take into account the balance between flexibility, demand and capacity.

As a rule when doing long-range forecasting plan flexibility can be extensive while predictions on supply and demand can be inaccurate so several long-range forecast scenarios will need to be in place. This long-term strategic planning can be complex and the decision process is often slow.

When looking at the short-term view often just a few weeks ahead this operations planning finds that flexibility is more limited while predictions on demand and capacity tend to be more accurate making decision making much simpler and quicker.

Sitting between these is a middle stage or tactical planning stage looking only months ahead that see slightly more flexibility than the operational planning stage coupled with still a good degree of demand and capacity prediction accuracy.

Benefits of a proper S & OP process

Ultimately successful S & OP implementation saved money and resources while improving operations and sales making organisations more effective in what are still very difficult economic conditions.

However, getting these right systems in place can require expert support plus access to more detailed modelling tools especially for the more difficult strategic planning stage. Total Logistics are highly experienced and independent S & OP consultants and can help you create a fully integrated S & OP process that will give you greater business agility, enabling you to reconcile supply and demand plans and determine your supply chain requirements over short, medium and long term horizons.

In a recent example, Total Logistics delivered successful S & OP solutions to a global manufacturer. As a result of this, finished goods inventory holding was reduced by more than 50% and operational costs were reduced by nearly 10%.

For more information call Total Logistics on 0118 977 3027 or visit www.total-logistics.com

Retailers Must Have Robust Supply Chains!

Last week figures from the Office for National Statistics showed that UK retail sales volumes fell by 0.8% in February when compared against January’s results. These figures have revealed that although there is a general trend of improvement over the last quarter with sales volumes being 1.7% higher than the same period a year earlier retail is still facing a very difficult period.

robust supply chains

Is your supply chain ready for the summer?

For many the internet is now being seen as a possible solution and area for relaters to grow with 10.7% of all UK sales now being made online. With this in mind companies have been prompted to look towards innovation and new technologies in an effort to develop more online sales.

While the benefits of online retail are not in question how best to invest a retailer’s money to ensure sustainable growth is. Tempting as it is to buy into mobile sites, apps and the like this should never be made at the expense of grass root investment in logistics and supply chain operations. Weak supply chains can be disastrous to a retailers operation especially with the expected transport issues expected this summer.

If your supply chain infrastructure and logistics processes are robust and ready for the summer then ultimately customers will be disappointed impacting on sales and company reputation.

Effective Supply Chain Management is an on-going process and often needs an independent eye to see the complete picture. Experienced and independent Supply Chain Consultancy Total Logistics can undertake a complete supply chain review including s & op, logistics operations, plus warehouse design and layout. This supply chain review will assist you in reducing risk while also saving you money.

Established in 1989 Total Logistics has developed a hugely experienced team, (330+ years in total!), all with hands-on experience of managing supply chain operations. Clients have typically experienced savings range between 10% – 20%.

For more information call Total Logistics on +44 (0)118 977 3027 or visit www.total-logistics.com.