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Gartner® Research: Severe Supply Shortages Illustrate the Need to Rethink Constraint-Based S&OP Balancing

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According to the report, “while ocean freight and land transportation constraints have driven the need for more robust distribution planning over the last decade, recent shortages of raw materials, labor, and energy have added complexity and occasional chaos to product supply planning.” The report further mentions that “it could be reasonably asserted that unconstrained resource assumptions in product supply planning were never sustainable and should not be expected to fully return.” So how do you allocate resources to best drive profitability and balance? 

This Gartner® research offers supply chain planning leaders actionable insights to translate resource constraints into feasible production scenarios that S&OP decision-makers can use to manage demand and allocate resources for profitable balance. 

S&OE product allocation alone will not adequately handle severe shortages. Supply planning leaders should analyze feasible product supply options and maintain open communication with stakeholders. Run various simulations to make smart trade-offs to handle constraints in resource availability, equipment utilization, production scheduling, and more. Planners must balance supply and demand to ensure feasible and profitable processes.  to ensure feasible and profitable processes.

Explore this research that “provides guiding principles with actionable insights for supply planning leaders who must proactively analyze and communicate the impact of severe resource shortages on feasible product supply scenarios that require profitable balancing decisions in alignment with business strategy.” 

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Gartner, Severe Supply Shortages Illustrate the Need to Rethink Constraint-Based S&OP Balancing, Paul Lord, 18 Nov 2021.

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