Advantages of centralized planning.

Why move to centralized planning in aftersales logistics.

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Published on August 14, 2020 – Frank Rohde, Solution Architect – Planning, Westernacher Consulting

We have already published an article on how to establish proper network planning with aftersales. The aim of this short blog article is to offer a quick overview of the advantages of centralized planning within aftersales logistics.

Trouble with your existing aftersales planning processes?

Does it seem that you have too much inventory on hand in your locations or that the procurement department is not getting the real customer demand based on the date from the point of sale (POS)? Do you still face bottleneck poker during parts distribution, accompanied with the feeling of limited control along your supply chain? If these are problems you face, you should think of moving from a decentralized planning approach to a centralized approach.
decentralized planning
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Future-proof planning approach for aftersales processes.

A centralized planning approach can help avoid most of the negative impacts of decentralized planning. It enables you to have full transparency within the whole planning network for almost all your KPIs. You can evaluate the inventory in the entire network in almost real time and can react agilely to imbalances with, for example, horizontal balancing instead of ordering new materials from suppliers. You can analyze the overall network demand from the POS to the central warehouse along your complete supply chain, and so you can optimize the order quantities you need to address at the supplier. A central planning approach helps standardize the planning process for the entire network. You will not have different tools at different locations where you need to interpret the single results to harmonize and understand the KPIs.

Finally, along with a centralized network planning approach, a highly automated process will usually be implemented. This enables the material planner to concentrate on critical issues such as backorders, out of stock situations and supplier communication because 80-90% of the planning will be executed automatically in the background. All background processes have approval and alerting functionalities so that the planner does not lose track of the non-critical parts.
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