bling the company to standardise its work practices on a global scale .
However , growing complexities and ambitious business plans have led to amplified pressures across its supply chain operations .
“ I think the challenge for supply chains , especially global supply chains that are heavily networked , is really what to do with this complexity ,” Lynch said .
“ In 2013 / 4 Terra Technology , which is now part of E2open , published an annual cross-industry survey which showed that whilst the number of products sold increases , the total amount sold remains pretty flat in most industries . Therefore , as the volume sold per product goes down , we can expect SKU level forecasting to get harder the more spread out a portfolio is . This is a trend we certainly recognise . The future is not likely to be simpler than our business of today .
“ In practical terms this means that with our traditional forecast driven MRP planning tools , we purchase raw materials , manufacture products and put inventory into the warehouses based on our forecast that predicts that we ’ ll sell it . In reality , the forecast is sometimes correct ; often it is not even with best-in-class forecast performance ,” he said .
30mn
Customers are served every day at 43,000 Shell-branded fuel retail stations “ Products that don ’ t sell to forecast tie up precious working capital and may become excess or obsolete inventory . With more than 10,000 saleable SKU ’ s it is easy to understand the pressure
that this may put on operations . Those products will have consumed capacity and materials that could otherwise have been used for other products that we do need at that moment . These may be products that weren ’ t in the forecast which become a firefight and expediting chase . This bullwhip or noise isn ’ t
17 www . energydigital . com