Proper Supply Chain Planning– A Win-Win Formula For Stakeholders
Supply Chain Planning (SCP) is forecasting future requirements to balance supply and demand. It is a process of coordinating resources to optimize the delivery of goods, services, and information from suppliers to customers. The objective is to establish a proper balance between supply and demand in a manner that achieves the overall objectives of the organization. The supply plan includes all statistics, such as existing quantities, existing and planned customer orders and order quantity, shop orders, lead times, reserve stocks, demand fulfillment status, etc.
The planning process includes-
- Sales and Operations Planning(S&OP)
- Forecasting and replenishment
- Vendor-managed inventory/direct point of sale
- Event planning (promotion, life cycle)
- Demand planning
- Inventory planning
- Production/factory planning and scheduling
- Strategic network design
- Inventory strategy optimization
- Supply planning
Typically, the supply planning process starts with a demand plan. The demand plan is a total of all the sales. Thereafter, the approved demand plan goes through a demand conversion step. The demand conversion hands over the demand plan to the location where the demand for the order is fulfilled.
With changing times, the supply chain planning has transformed from an Enterprise Resource Planning (ERP) system for collaboration and data tracking across the business to using a mix of spreadsheets and ERP systems. But in spite of the transformation, supply llain professionals have to keep in mind unforeseen events, such as a fire or an earthquake, affecting the manufacturing processes and jeopardizing the supply chain planning.
The following checklist will help a business to succeed in the competitive business environment.
- Real-Time Supply Chain Planning
While using ERP systems and spreadsheets for planning, companies typically rely only on historical data without taking into account unforeseen events, such as fire or earthquakes, thereby landing themselves in a chaotic situation. For example, a company can estimate the quantum of demand based on historical data, but that estimates fail in case of a fire or hurricane. A real-time planning, however, eliminates the impact of spreadsheets and unforeseen scenarios on the supply chain, and you can plan more effectively to meet any eventuality.
- Synchronization of Supply Chain Planning with Enterprise Planning
Synchronization of short-term operational planning with business planning processes to make real-time changes to inventory forecasts and supply can benefit companies in terms of profit and customer satisfaction. Deploying real-time solutions that facilitate enterprise-wide collaboration enables key stakeholders to visualize and create new scenarios and arrive at a conclusion for better use of available resources. This maximizes profitability even in the case of an unforeseen event.
- Anticipate the Demand of the End Customer
With the help of updated market research data and current events and looking beyond the existing network of wholesalers and retailers to anticipate demand, you can identify consumer mood and assess how it could result in increased or decreased demand for your company. Thus, you can not only maximize profit for your company but also benefit partners and customers by ensuring the availability of products when needed.
- Leverage Real-Time Data from All Points on the Supply Chain
Planning based on a real-time data helps you to plan with more accuracy and minimize the risk of no stocks or having excess inventory.
- Leave Room for Flexibility to Cope with Unforeseen Situations
A plan that leaves room for flexibility enables you to think and react immediately in an unforeseen situation, like fire or hurricane. Furthermore, the supply chain not only pays dividends in time and money but also from the standpoint of customer satisfaction.
An effective supply chain planning not only maximizes profit of the organization but also ensures customer satisfaction and creates a win-win situation for stakeholders.