skip to Main Content

Supply Planning: Processes, Options & Analytics, Oh My

Supply Planning  
04/19/2007

Supply planning is the component of supply chain management involved with determining how to best fulfill the requirements created from the demand plan. The objective is to balance supply and demand in a manner that achieves the financial and service objectives of the enterprise. A supply plan is another component of the Sales and Operations Planning (S&OP) process and is depicted on the right side of the demand and supply planning structure diagram below.

Supply Planning Process

The supply planning process commences with an approved demand plan. The demand plan is a sum of all the sales reviewed and approved channel, regional and/or customer forecasts.

The approved demand plan goes through a demand translation step. If you are using a supply chain planning software system, such as DemandCaster, the demand translation step will automatically allocate the demand plan to the location where the demand for a specific customer/item relationship is typically fulfilled.

An automated software system should then use the customer orders record to identify the ship-from location and then generate a forecast to be applied against a specific ship-from location. As shown in the sample screen capture below, the software facilitates the capability to transition demand from one location to another by part. With DemandCaster, this transition can be done manually within the screen or automatically via location linking.

Once the translation step is complete, the supply plan is run to generate a finished goods master production schedule by item and by location. The supply plan includes all item related attributes and data such as on-hand quantities, open and planned customer orders, open and planned shop orders, lead times, minimum order quantities, safety stocks, level loading and demand chase.

Once the supply plan is complete, DemandCaster enables the user to run a requirements review and capacity review to assess the impact of the demand and supply plan on resources. If required, the plan may be changed to address any constraints.

Upon completing supply planning, the user approves the plan to generate the MPS that can be pushed back to the ERP for execution or used in DemandCaster to run day-to-day requirement planning and ordering.

Related Articles

Best Practices for Resource Capacity Planning for Small and Medium Businesses

Manufacturing can be challenging in the best of conditions.  But for small and medium-sized businesses (SMBs) striving to remain competitive with large companies, their smaller size and reach mean that planning is even more crucial.   Small and medium-sized businesses often [...]

6 Questions that will Improve Your Capacity Planning Strategy

Capacity planning has always been a core strategic process in the manufacturing industries' quest to meet the demand of customers in a timely and efficient manner. Having accurate insight into your plant’s production capacity within specific durations of time while [...]

6 Tips to Improve Inventory Management through Automation

For companies with outdated or manual inventory management systems, lack of certainty about the accuracy of inventory levels can make managers and decision-makers apprehensive during busy times.  If calculations and inventory management practices are off, companies may find themselves with [...]

Strategies for Optimizing Customer Service Levels

  While every business works diligently to improve efficiency and operational excellence, at the end of the day it’s the customer who determines a company’s success.  And companies are looking for new ways to optimize customer service levels to improve [...]

How Demand Planning Fits into Integrated Business Planning

For years, many companies relied upon Sales and Operations Planning (S&OP) to align processes in their supply chain.  By doing so, companies were able to improve performance and profitability.  As the value perception of S&OP matured it became apparent that [...]

The Method in the Madness – Choosing the Best Demand Planning Method

Aligning demand with supply is a critical function for any company.  And it’s one with a lot of moving parts.  The right demand plan must have a balance of inputs from all areas of the company to create forecasts that [...]

Seven Advantages of Integrated Demand and Supply Planning

A championship football team reaches such heights because of teamwork, practice, and a clear strategy.  Both offensively and defensively, team members are drilled over and over to work together and know the plan so that on game day, everyone is [...]

What is the Difference between Planning and Scheduling?

Whether selling pipe cleaners, or manufacturing widgets to use in the creation of gadgets, any company with operations and production will be dealing with planning and scheduling. The differential between what is planned and what is ultimately scheduled is where [...]
Subscribe to our Blog
Back To Top