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Supply Chain Planning for Dummies

An easy-to-understand guide to getting started with demand planning.
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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 time and money are lost. The need for accurate planning that leads to ‘on the mark’ scheduling is in the best interest of any company. One depends on the other, so closing the gap between the two ensures more efficient results all around.

What is planning?

Planning is what happens when a company maps out a path to achieve a result. When it comes to manufacturing, for example, sales and operations should both be involved in the planning for upcoming demand. Or a series of large orders can be planned for across all levels of a company, from sales to finance. It is the ‘what’ and ‘how’ of any project: what needs to be achieved and how that will be done.

What is scheduling?

Scheduling is when a plan is assigned specific dates and a chronological order to the tasks, so that a plan can be put into action. These schedules need to include contingencies for variances in the plan. This reflects the ‘when’ of a project, with the assigning of appropriate resources to get it done on time.

Closing the gap between planning and scheduling

When plans and schedules diverge, it’s because of one of several issues:

● Plans didn’t consider various projects drawing on the same resources. Example? A manufacturer who has several lines of production using the same machines, at least in part. If the plans weren’t set up to schedule production to maximize the use of the machines, while minimizing downtime, and ensuring adherence to each order plan, through appropriate scheduling of manufacturing time.

● External contingencies weren’t planned for. Example? If a manufacturer of a widget didn’t factor in possible delays in receiving the raw materials it needed in the plan, and in fact did not receive the materials on time to complete an order that was scheduled, the gap between planning and scheduling widens.

● Different teams weren't included in the plan. Example? If a manufacturer’s sales department sold a bill of goods to a customer but did not include inventory, operations, production and finance in their plans, the schedule that they may have given to the customer is likely to be totally inaccurate. Unrealistic timings used in planning leads to the same in scheduling and the result is delayed orders and dissatisfied customers.

 

With any divergence between planning and scheduling creates inefficiencies that can be costly for any business. The bigger that gap, the larger the cost. The goal for any organization is to get their supply chain plan down to a fine art, with internal and external contingencies factored in, for a smooth delivery to the end customer.

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