August 2009
The world of supply chain data processing has ushered in a new and effective technique by which successive links in the chain transmit demand information to each other.
Instead of traditional discrete orders, more and more companies are relying on sending demand “schedules” to suppliers. A schedule describes demand for a given part and consists of a series of dates and the quantities of the part required at each. A single schedule may well show future demand for a period of six months or even more.
Unlike discrete orders, which are only sent once, successive schedules will each show the entire demand picture for the part going forward from the time of production of the schedule. Each new schedule received supercedes the previous one.
Organizations wanting to participate fully in global supply chains are well advised to ensure that they have the capability to deal seamlessly with customers who want to send them demand schedules.
Customers transmit schedules, typically weekly, via EDI, e-mail or fax. The catch is that when the lead time is long, the supplier may well have already shipped a considerable portion of the schedule. That is where the cumulative total, or “cume” comes into play.
Each schedule received will contain a “cume” which is the total number of parts received by the customer since a mutually agreed starting point in time. The supplier also needs to maintain a shipped “cume”, which is the total number of parts he has shipped to the customer since the same point. The difference between the two “cumes” represents the amount of the schedule that has already been completed by the supplier.
It is immediately apparent that any error in the “cume” numbers, on either the supplier or customer side, will translate to an incorrect understanding of the customer demand.
Schedules come in several different flavors that can be influenced by customer handling of ASN’s and the existence of consigned inventory. “Cumes” must be dealt with differently in each case.
Context Group consultants are well versed in all of the issues pertaining to schedules and to ensuring the correct synchronization of “cumes”. We can provide advice or hands-on assistance in helping clients to implement this powerful technique.
Contact richard.evans@contextgroup.com