Planning processes in a complex supply chain. Case study.

Planning processes in a company with a complex supply chain

Today's manufacturing companies have developed more complex supply networks than ever before. Customer requirements, economic, political and legal factors, expansion into foreign markets and the development of technology have significantly influenced the shape of supply networks. The Cersanit S.A. Group is an example of such a company. Cersanit brand products are distributed to all European Union countries, as well as to the eastern market, Central Asia and North Africa. Factories are located in Poland, Germany, Romania, Ukraine and Russia.

The planning processes for such an extensive network of factories and warehouses and a distribution market are characterised by a high level of complexity. On the other hand, they are extremely critical, as only through them can the current and future needs of customers be properly balanced with the necessary logistics, production and material resources. Planning is a difficult process, considered by some even to be a craft that takes years to learn. In the process, planners have to juggle very large data sets of products, resources, suppliers, delivery times, realisations, ever-changing conditions and thousands of exceptions constantly appearing.

Case study of Cersanit, which decided to implement the IBM Planning Analytics planning platform, ensuring transparency in the supply chain and maximum optimisation of planning processes.

Cersanit S.A. - extensive supply network

No digital transformation without a vision for holistic change

A holistic view of the organisation is the basis for thinking about the digital transformation of planning processes. Any changes that are made in the company in this respect have a significant impact on the existing processes in the company that link demand planning, sales, distribution or production, for example. The objective behind creating a vision of holistic change is to bring processes, and therefore the entire company, to a higher level of organisation. In this way, it is possible to create a company that is fully oriented towards effective profitability management. Digital transformation undoubtedly affects the whole company and is only possible if we create changes that are realistically tailored to our needs. When changes are based on off-the-shelf blueprints or systems, we unfortunately cannot talk about digital transformation, but only about the digitalisation of processes. Digitalisation, although crucial in the development of any organisation, is not able to make a company innovative and gain a competitive advantage. 

It doesn't matter what tools you use, it doesn't matter what you call your process, it doesn't matter that things don't go your way, it doesn't matter....
Make „your” S&OP. ~ PAWEŁ STRZELECKI, Planning Director Cersanit Group

Most critical point - cleaning 0-4

 Within the designated scope, the planning organisation was operating in a well-defined manner. On the systems side, it was supported by access to a sales forecasting system and ERP systems. Data consolidation took place in Excel spreadsheets, and decision-making was based on a partially formalised set of formulas and heuristics.

Change (not) equal to change

Why a planning platform?

From the point of view of systems and tools, planning at Cersanit S.A. has so far been based on models prepared in Excel, which is a ubiquitous tool for planners in most companies. This is because it allows the process to be modelled at will, constantly introducing the numerous changes that are inevitable throughout the process. However, Excel requires changes to be made manually, unfortunately not all data is available in it, moreover, the time spent preparing and updating it on a daily basis does not allow planners to focus on making critical decisions. The choice of supplier and the concept of creating a solution based on the planning platform was undertaken after a „proof of concept” exercise. This exercise allowed the Cersanit S.A. team to make a conscious decision that the only way to reflect the uniqueness of the company's planning model would be to create a solution on the platform rather than purchase a so-called „out of the box” system. 

Inherent in the process of implementing change is learning. The ability to define and describe one's own requirements, which will be realised in the solution, is one of the most difficult tasks for the implementation team. In addition, even the best-defined requirement needs to be discussed and the interface tested, if only in a demo version. This is where the platform again proves helpful, as every concept and idea can be prototyped in the platform. The prototype on the platform can be tested, redefined or completely changed. A solution created in this way grows in the eyes and the future users are the authors of the solution in 100%, which has an extremely strong effect on the adaptation of users to the change of introducing a new solution. 

The main objective of the implementation was to create a central planning system into which all the data necessary for the planners (mainly from forecasting and ERP systems) would go, and where all calculations and automations would be made. Data would be constantly refreshed, available in real time, and decisions would be made on the basis of exception analysis - which was defined on the basis of Cersanit S.A. requirements.

Decisions made in the planning department are usually an answer to the question of which scenario to pursue. This could involve prioritising orders, starting up or extinguishing a resource such as a furnace, for example, or ordering additional transport between factories. The platform's support in terms of data transparency, indication of all dependencies and the possibility of simulating a change in plans even before it is approved are the core functions used by Cersanit S.A.

Having led the supply chain in the area of Demand Planning and production planning at MPS, DRP and S&OP levels at all 11 Cersanit Group production sites, we knew that there was absolutely no room for chance in making changes to our company's planning processes.

We confronted our concept of change with the expertise of experts from BiModal Solutions. Together, we created a planning tool that identifies business opportunities and risks in a timely manner.

This successfully saves the time and resources we devote to key business activities.

~ PAWEŁ STRZELECKI, Planning Director Cersanit Group

Why can „out of the box” systems fail us?

Differences between companies are and should be visible even among companies operating in the same sector. Differentiation includes, for example, the business model, the internal operations policy, the direction of development, the set of processes or tools that support the company's operations. Although these are „nuances”, they are what determine whether a company is a leader in its sector and whether it is able to stand up to the competition.

When asked if there was room for customised solutions in Cersanit S.A.'s planning, the answer was one - of course yes! The list is long... Starting with how we define and analyse our product, how we group and aggregate data, what algorithms and calculation formulas we use to calculate control data, whether we plan by month or perhaps by week, what causal relationships we define in the model, etc.

This approach is best applied when we know exactly what we need. Organisations do not want to learn a new system, try to adapt to it and most likely make many modifications to it in the long term. They want a solution that is tailor-made, but on the other hand will not be developed over the next few years. In support of this kind of approach, which promotes innovation and competitiveness, the entire management team is usually involved, promoting and implementing newer and newer business implementation concepts. This makes changes in requirements a continuous process and it is essential to support this idea from the IT side, implemented through a model described by Gartner - called bimodal IT.

Using „out of the box” solutions, i.e. off-the-shelf systems, in their planning processes can be a good strategy, in a stable and rarely changing business environment. When an organisation begins to define its needs and simply wants to „move forward” to gain a competitive advantage, it should bet on technology that is tailored to the defined needs. 

Bimodality and the use of planning platforms is the way forward for companies with a mature process and planning model concept.
Those looking for new ways to learn more and faster about customer needs and to skilfully balance them with their own resources, open to change, experimentation and a new way of conducting organisational change projects and implementing solutions to support the organisation.

BiModal Solutions' strategy is to work with Cersanit S.A. in the long term and support the organisation using the latest process automation solutions.~ ARTUR BUŁA, CEO BiModal Solutions

Where to start?

The implementation of any changes to planning processes requires the company to be adequately prepared. The change process is a continuous process and this is how Cersanit S.A. wants to treat the task of optimising planning. While the new MPS and RCCP have already become an integral part of the organisation, the next stages - S&OP, Demand and Sales Planning, Production Scheduling - are being planned. An extremely important change following the implementation of the new platform is the improvement in the fluidity of communication.

With consumer forecasting, such as product demand tracking, the profitability of the business can be continuously analysed and improved. Planning processes, whereby we have a defined demand plan, helps to prudently manage the product life cycle. In addition, having a unified platform that includes stakeholders and stages of the supply chain determines the processes that take place at the company-employee, company-customer, company-supplier interface. Constant use of the new platform also means that areas that are inefficiently affecting the company's operations, such as miscalculations, stock shortages, inadequate waste management, are precisely identified. These all generate unnecessary costs. 

It is a fact that such systems have many basic and necessary functions, but this means that everyone in the industry manages their processes in the same way, and this, unfortunately, is not conducive to increasing competitiveness. „Boxed” systems will work especially well for young, smaller companies where processes are only just being shaped and real needs verified. Companies with complex supply chains should bet on technology that can be adapted to their very sophisticated processes, bearing in mind that even the most complex company processes can be digitised. Examples include:

• the way we present and analyse our product;
• the way we group and aggregate data provided from marketing, accounting and finance departments or production execution, as they usually look very different from what planning specialists need;
• calculation formulas;
• the way data are presented - customisation;
• automation of planning activities - what, how often, with what coverage in the planning model;
• business scenarios and how to assess risks.

Implementing a planning platform to optimise processes is a definite change for an organisation. Preparing for this requires establishing the current situation, the expectations held and the desired goals. Based on the information gathered, you can then move on to designing a unique planning solution. Then, already during the implementation process, it is important to review each step of the process. This ensures that the whole process is gradual but smooth!