Deliveries to over 30 markets in the Middle East and Africa, with four regional manufacturing sites
Challenge
The company primarily operated on a make-to-order basis, frequently changing production schedules due to material shortages. This caused delays, inefficiencies, and disruptions in meeting market demand.
Solution
A centralized supply chain planning function was established to streamline operations, focusing on improved demand management, production scheduling, and materials requirement planning (MRP). A detailed analysis of historical sales data allowed for the classification of finished products into three categories based on sales frequency and volume:
- High-Frequency Items: Produced to stock to meet ongoing demand promptly.
- Moderate-Frequency Items: Produced based on customer orders, with materials in stock for quick response.
- Low-Frequency Items: Manufactured only upon order placement, with materials procured from suppliers as needed.
The new planning function utilized a six-month demand planning horizon, with detailed weekly plans for the first month and monthly plans for subsequent months. Production schedules adhered to the same horizon, with daily planning for current operations per production line.
Outcome
The implementation of centralized supply chain planning significantly enhanced operational efficiency:
- On-time delivery of finished goods increased from 92% to 99%.
- Production stoppages due to material shortages were nearly eliminated.
