Manufacturers love to plan. Companies have invested millions in sophisticated Sales & Operations Planning systems so they can plan exactly what’s needed and when. Driven by demand sensing technology, these systems harvest granular levels of customer buying patterns in order to predict future demand. Then the planning system kicks into gear, adjusting goals and production schedules for the next week, or month, or however the system is set up.
This level of planning is a great improvement over the educated guesswork that used to drive manufacturers. But there’s a catch to all this—real manufacturing plants, somewhere in the global system, have to step up and actually produce the product. And this has been getting harder and harder to do, because other forces have been at work in manufacturing in recent years.
One of these forces is the Lean manufacturing practice adopted by most leading companies. Changing production plans was easier when you had a lot of inventory sitting around. But these days, manufacturers have purged their system of waste, and extra inventory is likely a thing of the past. Now when production plans change, the local plant often has to scramble to find the needed materials and move them smoothly into the production stream.
Maybe you’ve adapted to this and have a very agile supply chain. But there’s a second force at work complicating things still further: the increasing variability and demands on packaging.
If you’re a global manufacturer, you have many different packages for the same product. There are packages for different regions, packages for white label customers, and packages for different regulatory requirements. Clearly you must label and/or date every package correctly. Accurate packaging can also provide the key to executing a recall or other product traceability issue, should something go wrong.
All of this complexity, coupled with the agile front-end planning systems, is putting a real squeeze on manufacturing plants.
The problem is packaging management has not always kept up with planning. Not that many years ago, packaging was an afterthought on the plant floor. Today, packaging is becoming the tail that wags the dog. There are some products—food and beverage are good examples—where packaging can be the single biggest differentiator, and the hardest part of the production process to change quickly, precisely because every product has so many packaging variations.
It’s ironic but true. The bottleneck in your planning system—the thing that’s keeping you from being truly responsive and ahead of your market—may not be in your demand sensing or planning systems, or even in your ability to manufacture your products. The bottleneck may be at the very tail end of your production processes: your ability to manage and execute product packaging.
In that sense, planning is like baseball. As Yogi Berra once said, “It ain’t over ‘til it’s over.”