Annual Budget Planning
Challenges
The process requires setting monthly production, logistics, and procurement goals and budgets for the coming year, which are regularly refreshed.
Decisions are often made based on past experiences and high-level assumptions.
Software solutions may be used, but the process is not integrated across functions and does not guarantee end-to-end cost optimization.
The lack of ability to quickly investigate alternative scenarios is also a challenge.
Sophus Solution
Integrated annual budgeting process, with data integration and process orchestration on the platform, and the ability to explore alternative scenarios.
Ability to handle complex manufacturing environments, including multi-level Bill of Materials and multiple assets with different shift patterns.
Optimal budget plan from an end-to-end cost perspective, balancing capacity, sourcing cost, inventory cost, logistics cost, and customer service level.
Evaluation of various alternatives through what-if scenarios, which enhances supply chain resilience and enables innovative decision-making.
Benefits
Production variable costs can be reduced by
5-7%
Logistics costs can be reduced by
12-20%
More about the next generation of annual budget planning?