I interviewed Moustafa Ibrahim who discussed Integrated Supply Chain Solutions and Demand Management.
Please provide a brief background of yourself
Hi, Dustin. It's my pleasure to talk to you. I hope that this interview is addling value for all of our audience. Basically I'm a mechanical engineer. I have a previous experience in maintenance, planning, production & fleet management. Currently I'm one consultant team of highly professional advisors company- hpa. hpa is a business solution company provides business training & hand to hand consulting services for more than 750 companies in middle east & north Africa. Within consulting projects I’m working on different projects, different industries & different functions within supply chain
What is your definition of supply chain solutions and demand management?
• Supply Chain solutions is a business solutions not just operation
• Through applying that, the business will be able to synchronize supply with market demand through delivering products and services from raw materials to end customers through many activities as:
a. demand planning
g. and logistics management
• Through each stage of the previous functions, the adding value will be created through an engineered flow of information, physical distribution, and cash. It is business journey starting from customer need and finishing at customer satisfaction.
• Demand management is the function of recognizing all market needs as goods and services to support the marketplace. Proper demand management facilitates the planning to utilize of the available resources to achieve profitable business results.
Why is it important?
Supply chain is too dynamic processes. So, supply chain functions moved from silo concept to cross function concept Silo concept means managing each function separately regardless synchronizing with other functions
• cross function means managing each function by coordination with the predecessors & successors functions to achieve the integration and avoid any conflict of interest between all functions to achieve the business goals. The objective of silo concept is achieving operation goals while cross function focusing on achieving business goals. Integrated supply chain is very important to strength the main pillars of the firm goals.
• These pillars could be nominated as:
a. Improve Financial Position of the firm
b. Increase Customer satisfaction level
c. Utilize Operation CostsFinancial Pillar (Improving Financial Position) could be achieved through:
• supply chain costs control to Increases business Profit
• Decrease the ownership of fixed Assets as possible such as plants, warehouses and transportation vehicles to reduce the working capitalIt’s applicable through redesign the distribution network to serve the same number of customers from minimum number of warehouses with minimum logistics cost. Increases Cash Flow and Cash to cash cycle though applying lean theories to plan the production capacities and distribution networks according to takt time. So the firm will be able to invoice the customer many days sooner.Customer satisfaction pillar could be achieved through:
• Applying quality systems to achieve The acceptable level of quality
• Minimizing the operation cost which will reflect on acceptable selling price
• Managing the production lines to produce the required quantity.
• Design a good distribution network to send the goods at the right location
• Accurate planning process to enhance the right delivery time
• Provide after Sale services to enhance customer retentionUtilize operation cost pillar could be achieved through:Decreasing Purchasing Cost which represents more than 62% from company expensesDecreasing Production CostMinimizing Inventory carrying cost as a CAPITAL COST, storing cost & risk costs which represents from 25 up to 30% from cost of goods Integration is too important to strength all of these 3 pillars leads to achieve business objectives in profitability, sustainability, customer loyalty with the minimum cost.
How is it done effectively?
Integration could be done effectively through:
• Continuous coordination & communication between the key players of cross-function supply chain
• Solid system to automate the linkage between all of them
One of the most important process to communicate is S & OP (sales and operation planning). Its objective is bringing relevant pieces of information and goals , from different points of view to help the organization make decisions that will help it achieve its goals. Business plan is one of most important inputs to S&OP. business planning process comes From a high-level view, it consists of five separate steps:
Product and Portfolio Planning, Demand Planning, Supply Planning, Financial Reconciliation & Executive Review.
S&OP goal “how to set a plan which will be able to achieve the business plan. S&OP is setting company plan for 1 up to 3 years (based on company volume). This process often repeated on a regular, monthly drumbeat to monitor the execution of the plan. Withn S&OP, the Information is brought together from multiple functions in the firm including sales, marketing, supply chain, finance, and senior management.
Customers and suppliers are often represented in the different stages of the process.
Companies frequently spend large amounts of time and effort to construct these processes, and they are often elegantly designed and comprehensive.
Cross-functional communication is an ongoing process of transferring knowledge from one functional area to other areas of the firm to get a mutual understanding of the business goals
Everyone within the supply chain has to know that the output of the predecessor process will be input for his process and the output of his process will be an input for the successor process and so.
So the responsible team for any process within the supply chain have to communicate with the team of predecessor process and successor process to agree with them on the headlines of the plan as time schedule of implementation, major characteristics of the product or service, desirable way of storing, shelf lifetime, storing conditions & way of physical handling
Thanks Dustin it was my pleasure to meet you. Bye Bye
About Moustafa Ibrahim
Supply chain corporate consultant