How to optimize production and distribution capacity in a crisis period?

In this health and economic crisis’ period, optimizing production requires;

How to optimize production and distribution capacity in a crisis period?

We could see that social distancing measures reduce the capacity of operations. Understanding and measuring current and future industrial and logistical capabilities are even more essential than usual. Making the right decision regarding the different priorities is even more difficult.

Therefore, even if companies seek to increase their production rates and make up for lost time … (if they can), they must reserve logistics capacities in advance or secure supplies. This is how to minimize exposure to a potential increase in costs.

Collaboration with partners is an effective strategy to gain priority and increase capacity with the best commercial condition.

To improve contingency planning in rapidly changing circumstances, real-time visibility will depend not only on tracking the punctuality of transit cargo but also tracking more general changes, such as airport congestion and border closures or supply disruptions.

It will be imperative to maintain a flexible approach to logistics management; to quickly adapt to any change in situation or environment. Once again, the digitization of the supply chain will be an essential asset for our supply chain managers.

Armed with an estimate of Demand (as reliable as possible), the S&OP process makes sense in this particularly volatile time. The process should allow you to optimize production and distribution capacity on Demand. It will be essential to analyze different scenarios—pessimists and optimists- to identify the decisions to be made and understand their financial and operational implications.

The S&OP process can help you determine which product families offer the most strategic value over the medium to long term to optimize the use of available capacity.

The process is based on a multi-functional team; composed of marketing and sales, operations and strategy, and finance. It should also include all those capable of adapting updated macroeconomic forecasts to measure the expected impacts of the crisis on the company.

Whenever possible, you should also have a digital platform for end-to-end planning of the value chain. Through a dynamic scriptwriting approach, a tooled S&OP process will be a solution; to better match production and supply chain planning to expected Demand under different circumstances.

In a time of pervasive demand uncertainty, let’s try to keep a cool head and anticipate as much as possible through response scenarios. So if you were still in doubt about launching an S&OP project in your business, then don’t hesitate!

S&OP will help you navigate rough water and thick fog.