Multi-source Planning

This continues a weekly series on the concept of a Superplant. Every Monday will be a new entry in this ongoing series. This is week five.

Here are our other entries: Week 1 |  Week 2 |  Week 3 |  Week 4

Outsourcing manufacturing processes have been supported by companies for decades. However, is it really effective to have one provider tasked with meeting procurement objectives? The multi-sourcing methodology aims to overcome this point and digitally join overseas production factories with company processes. Scheduling sites as a collective group, a Superplant, may be the best way to overcome these drawbacks. 

Many businesses are considering outsourcing as a component of their procurement strategy. Outsourcing is often promoted as a way to maximize performance for a competitive advantage in the industry. 

Driving optimized costs, quality, and turnaround times are the guiding light for supply chain managers, and multi-sourcing is fast becoming the best approach to move towards the supply chain north star. This article reviews both strategies – multi-sourcing and single-sourcing – and provides recommendations on effectively executing a multi-sourcing strategy.

Defining Single-Sourcing and Multi-Sourcing

To fully understand both processes, we need to start by defining both terms. 

Single-sourcing: The age-old concept of economies of scale. Single-sourcing is the strategy of passing all purchase orders for a particular product to one supplier. By buying in bulk, consistently, from one single vendor, theoretically, a business can benefit from better costs, quality of service, quality of the product, and payment terms. 

Multi-sourcing: As global economies grow more and more advanced, you can make pretty much source any product on any continent.

Pros and Cons of Multi-Sourcing

Knowing how to leverage multi-sourcing is key to implementing it correctly into your work processes. Every decision carries with it a certain amount of risk. Here are some main pros and cons of multi-sourcing to consider:

Pros:

• Risk Deduction: Limiting dependence on an individual supplier raises the supply chain flexibility if mistakes happen.
• Supply Chain Stability: The risk of products getting lost as they travel through the supply chain is reduced.
• High Product Quality: A large labor pool keeps the highest quality product at the best possible price. 

Cons: 

• Supplier Management: Increased difficulty interfacing with suppliers. 
• Administration costs: Additional costs associated with communication between numerous suppliers.
• Quality Control: Quality could be a factor as the new methods and processes are rolled out.

The answer to whether your company can benefit from multi-sourcing will depend on your company’s capabilities. Read the pros and cons and decide if this is right for you.

Advanced Planning and Scheduling (APS) System

An APS system is a planning and scheduling system by which raw materials and production capacity are optimally allocated to meet demand. It allows for simultaneous planning and scheduling of your production based on available material, labor, machines, constraints, capacity, and other sequence-dependent setups. The result is a feasible plan that is optimized for your KPIs of interest that is created in a matter of seconds. 

Advanced Planning and Scheduling software have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With APS you can:

• Create optimized schedules that balance production efficiency and delivery performance
• Maximize throughput on bottleneck resources to increase revenue
• Synchronize supply with demand to reduce inventories
• Provide company-wide visibility to resource capacity
• Enable scenario data-driven decision making

The implementation of Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!