In the contemporary world, the only constant is change. The success or failure of any project depends on its management. However, few companies are capable of finding the right approach. This is where the value of Master Planning lies.
Also known as master planning, Master Planning is a very powerful tool for adding value to any project. In its absence, miscoordination and the risk of stockouts take over.
So, in a reality where logistics must respond in real time, this system has gone from being an option to an obligation.
Master planning is a strategic planning process that addresses the development and management of a complex system or entity. It involves defining a long-term vision, setting goals, and outlining the steps and resources needed to achieve them. This can be applied to various fields such as urban planning, business, project management, and IT.
Supply chain master planning is the act of coordinating production and inventory/transport to meet demand. Within the framework of the ASCM, the leading global organisation dedicated to advancing the knowledge and practice of logistics, Master Planning is:
“The process group that includes demand management, sales and operations planning, and master production scheduling.
Thus, the master planner coordinates various departments within an organisation, and even with external suppliers, to ensure that:
- The material is available
- The inventories are up to date
- Production is aligned with demand
The coordination of these elements helps to maximise efficiency, reduce costs and support profitability.
Forward-thinking flexibility
In a changing environment, where the business ecosystem faces multiple structural challenges, the ability to react has become the champion of resilience.
Widely popularised in 2020, this logistics feature has underpinned the sector's survival in recent times. However, as numerous experts have already pointed out, the time has come to move beyond reactivity and embrace proactivity.
How can this transition be managed? What can unblock the bottleneck that the supply chain is now?
The solution is both simple and complex: it is time for master planning.
Short-termism is no longer the priority and, given the pressure of VUCA environments, medium-term processes have taken on a different complexion. Without a visão for the future, the present is all that remains for companies. If there is no thought for tomorrow, there will be no tomorrow.
Planning the horizon
The exhaustive and periodic analysis involved in master planning directly affects production, distribution, and storage activities. However, the main challenge of Master Planning does not lie in the complexity of these links.
Variability, time, and the lack of resources are the real handicap.
Master planning involves a comprehensive understanding of the company, its immediate present, and its future objectives. Thus, as well as considering how to align processes with social or environmental needs, this system must allow, for example, knowledge of when raw materials will arrive, whether the necessary personnel for unloading them will be available, and how long it will take to move to production.
This way, Master Planning offers a Plan A, and if something goes wrong, you have to have a Plan B and a Plan C in mind to respond.
Master Planning and Technology: a foolproof combination
Master planning supports medium-term decisions on the efficient use of production, transport, supply capabilities, seasonal stock, and the balance between supply and demand.
As a result of this synchronisation, production and distribution companies can reduce their inventory levels. This, in turn, significantly lessens the pressures on the supply chain, gradually diluting bottlenecks and unblocking logistics operations at each stage.
Notwithstanding, in the face of this Herculean task, people are not alone. New information technologies and the internet are, without a doubt, the great enablers. Thus, Master Planning can be supported by:
- Supply chain design simulators that allow for making decisions on total impacts when we make changes to the network.
- Demand planners, whether through sales statistics or with computer algorithms for market anticipation.
- ECR (Effective Consumer Response) collaboration projects for continuous supply.
- Production sequencers that allow detailed hourly manufacturing programming.
- Transport and route managers for distribution.
- Traceability tools that provide visibility into the status of products, procurement, and orders.
- Enterprise Resource Planning (ERP) and Warehouse Management System (WMS) tools that streamline and measure parameters more precisely.
Taken together, the tools, alongside the skills required for the critical task of Master Planning, operate on the premise that collaboration and coordination between logistics actors they are the solution to restore logistics to the trust it deserves.
