Study 4: Create Multiple Plans for Resource Utilization
This study can help you ensure resource requirements in your supply chain.
Manufacturing plants and warehouses will experience a sudden shift in resource utilization. There will most likely be a reduction in labor hours as fewer people will work in a closed, crowded environments. This could even lead to total shutdown of certain plants.
Study multiple resource utilization what-if scenarios and accommodate your production plan accordingly.
S&OP Navigator allows users to simulate changes in resource capacity, labor hours, utilization, production lines and throughput rate dynamically within the application. The output is a detailed production and distribution plan that maximizes your margin.
If using your own bespoke app, another option is to re-adjust your objective function. We have seen this work very well in the past where a customer, during a crisis, moved from Production Maximization to Cost Minimization due to the need to close sites (instead of arbitrarily closing sites or deciding to just stop producing in A instead of B. This includes the challenge of lay-offs (where, what, how). Of course, this can be very wide in range. But a simple OBJECTIVE change from Max to Min and maybe adding a few cost constraints can make an operational planning model a strategic decision tool. More information in our interview with BP’s Norm Jerome.
Capacity Shutdown in S&OP Navigator
This article is part of the series Immediate Supply Chain Actions to Take Amid COVID-19.