<!– –>Not so long ago one of our consultants spotted planners creating scores of small production orders for a packaging line when they actually had large quantities of beer to package. Why? Because their scheduling software treated production orders as ‘tasks’ of fixed duration and couldn’t accommodate the actual quantities required.

Tedious planning workarounds are more than a source of frustration. They point to a much more serious problem: the possibility that the planning system is hampering – rather than helping – planners achieve supply chain goals.

Over the years, we’ve identified several areas where significant sums of money are being left on the table by F&B supply chains. Check out how your F&B supply chain planning tool measures up against these top three capabilities.

(1) Can you base your plans on your most significant constraints?

It goes without saying that identifying the correct driver of the supply chain plan and implementing the correct planning workflow are fundamental. In our experience, most planners recognize what the correct driver and workflow should be. Whether or not they can actually implement it is quite another matter. All too often planners are forced to rely on spreadsheet-based workarounds in order to base their plans on the correct driver.

(2) Can you base your plans on the correct demand signal?

F&B manufacturers who rely on the demand signals created by their MRP systems are at a real disadvantage.

Did the demand originate from a sales order, a forecast, or, perhaps, from the need to replenish safety stock? They have no clue.

This blind spot makes it difficult for them to assess risks and prioritize. Their lack of insight into the true nature of demand is even more damaging when the step being planned is a critical one that requires optimized planning.

(3) Can you achieve high service levels with minimum waste – even for products with a short shelf life?

In other words, can you combine an estimate of forecast confidence with the timing of your next production run? This approach links the level of safety stock with the timing of replenishment, and therefore works best with stable, predictable production schedules.

These stable schedules have the added advantage of enabling planners to optimize supporting processes and create a virtuous cycle of constant improvement. Unfortunately, many traditional planning tools impose planning approaches meant for other industries by forcing planners to plan the quantities they will produce before scheduling them.

Discover five more key capabilities to look for in F&B supply chain planning software when you download your free management briefing, The 8 freedoms of highly effective food and beverage supply chains.