Are You Prepared for the Voyage?
Planning lays the foundation for all business activities that follow. Finance professionals need to ensure that they are developing a plan that they can trust, and that maximizes profitability while taking full advantage of available resources.
In a previous post, we introduced the Plan Execute Monitor and Analyze (PEMA) concept as a framework for iterative, progressive improvement and the challenges each phase presents to financial professionals.
In this post we dig further into the system capabilities needed to help financial professionals meet the challenges of the Planning phase of the cycle.
Trust Your Data – The data pool generated by your operation provides the foundation for planning and allows you to make informed decisions. That foundation must be strong.
A well designed and integrated ERP system supports and informs your operation at every step. It builds trust by being a single source of truth for information. Say no to manual systems or external spreadsheets that need update and cross-reference.
You need visibility to integrated information across business streams that reflect the latest activities. Shrinking the time to close financial periods and produce reports and analytics also goes a long way to fostering trust.
Rock Solid Costing and Estimating – The foundation of the planning cycle that underpins the other cycles is costing. Is the data accurate, timely and tracked at the right level? And is it relevant? Nobody needs a screen door on a submarine!
Your system should offer extensive building blocks for rates on work center, labor and overhead. Charge and estimating rates should be availlable for machines and overhead. These rates are used to transfer overhead costs to items as they are manufactured at the various work and cost centers.
Once rates are established, any required changes should be rolled out in a controlled and auditable way with options to update work in process (WIP) if necessary.
Any cost adjustments should flow through to sale or consumption, ensuring that the values you see reflect all adjustments.
Flexible Supply Strategies – Sometimes you make it and sometimes you buy it. Sometimes you do both, by supplying material to a contract manufacturer and have them make it for you.
Can you easily turn that Bill of Materials into a pick list of items to send to the contract manufacturer or to have the materials drop shipped from another vendor to that contract manufacturer? Configuration in Production and Procurement should provide the structure and flexibility to do this easily.
Who is the backup domestic vendor for that offshore vendor in the event of supply disruptions? Is there a backup? Do you have other supply sources or alternates for critical components? Are there pricing agreements in place to ensure price stability?
Having these and many other elements in place allow you to plan and react to events with confidence.
Assess and Deploy Resource Plans – Use historical and/or external data to generate and compare plans and then put them into action.
The integration of forecasts should allow you to include forecast supply and demand into the planning of purchased and manufactured supply. How far out is your forecast window?
Advanced Scheduling functionality should allow you to compare multiple resource scenarios and then execute the schedule that fits.
If you would like to share some of your planning challenges or hear how similar companies are addressing their challenges, please reach out to us at sales@industrios.com and Let’s Talk Shop!
