Demand Management in complex environments
On a regular basis each OEM defines its “Vehicle Program” and this often results in a trade-off between the ‘Offer’ (vehicle range, industrial capacity, finished goods inventories…) and the ‘Demand’ (customer orders, distribution company replenishment needs…).
In fact this “vehicle program” is the result of industrial and commercial gambles that answer contradictory objectives: minimal options and a reduced range of vehicles on the production side, versus maximum model flexibility and a broad range of options on the sales side.
On the planning side this can result in instability in the value chain with excessive safety stock levels, delivery shortages, and over consumption of resources with the associated inherent costs. While on the sourcing side, the OEM’s buyers have difficulty in optimising their target costs from their Tier 1 suppliers.
How BearingPoint brings value:
BearingPoint has developed a complete solution set (Trademark registered) to support the OEM’s planning process.
In the short to mid-term perspective this solution set enables the OEM to increase their sales by 3% to 5% and to drastically reduce their Operating Working Capital
In the long term the increased accuracy of procurement forecasts has a major impact on the risks borne by the OEM’s suppliers and can lead to reductions in sourcing costs by a further 2% to 5%.
The fundamentals of this approach are:
To build a new segmentation approach based on vehicle typology
Use of a simulation tool to deliver quick scenarios and optimizes the trade-off between demand and customer offer
To ensure that the commitment between sales and operations is clearly defined in Service Level Agreements