Supply chain planning is the process of planning the journey of a product or material from the raw stages to the final consumer product. This plan includes multiple processes. Supply chain planning is necessary for a number of different reasons.
Benefits of Supply Chain Planning
Manufacturers are under a lot of pressure to enhance revenue margins, improve supply chain efficiency, and reduce costs. If there is a lack of visibility into the supply chain then managers don’t have the important deep insights to achieve these goals. This keeps them from creating synchronized and responsive plans in order to meet demand.
A well-planned chain influences the organization’s ability to increase production capacity that results in better yield and output. It can also help decrease many different costs, including unplanned breakdowns, inventory costs, operational running costs, and shipment costs. Manufacturers will see improvements in customer relationships and system responsiveness.
The Process of Supply Chain Management
There are multiple steps in the process.
Supply Management: The first step is to manage the supply of the services or goods. Questions that are answered in this stage include how can an organization create a balance between the supply of goods and the requirement for the goods? How can a business facilitate the best possible way in which requirements can be made from the demand plan?
Demand Management: This step is the process of producing and forecasting the future demand to make sure services and goods can be delivered based on the needs. Some questions that can be answered include how can an accurate forecast help manufacturers get accurate revenue calculations? How can this process match appropriate inventory stocks based on demand trends?
Production Planning: The production planning step relates to the actual production and manufacturing. In this stage, you can answer questions about how manufacturers can appropriate allocation resources of workers and see how to best schedule for materials.
Operations Planning: During this step, you address the need to develop operations processes in order to have an effective supply chain function. In this phase, questions that are answered are about how effective scheduling can help outline the resources and timeline necessary in order to complete an operational analysis.
Sales Planning: In the sales planning step, there is the warehouse management process and periodic integrated operations so the business can focus on key supply chain drivers.
Strategies for Supply Chain Planning
There are different ways you can do supply chain planning in order for it to work for your business.
Demand-Driven Planning Using Real-Time Insights: Strategies that use demand driven data are going to be more successful. By using real-time insights, organizations are able to change pricing strategies to expand margins, add new product lines, and drive revenue growth. Organizations are also able to use the Internet of Things in order to gain more signs into real-time inventory tracking to help leverage the supply chain.
Intelligent Planning: When an organization gets more clarity on demand forecasting, the next thing they need is to adapt their supply chains to the fluctuating market and come up with possible alternatives.
Integrating Sales for Better Alignment: The objective with operations and sales planning is to make sure you are running all manufacturing processes together like a well-oiled machine, but many times this can be difficult ti make happen. There are many different processes that are running in parallel so there are often disconnections. One way to address this is by unifying business planning approaches to integrating all the processes in the strategy and planning phases.
Focusing on Product Management Decisions: Product oriented decisions often directly impact the level of profitably, as well as innovation. Making the right decision early on in the product life can affect the supply dynamics and operation efficiencies.