BIZ SPONZORS
popular biz reading
Marketing Mix: Promotion
Employee Turnover
Marketing Mix: Price
Planning and Organizing
Maslow's Hierarchy of Needs
Key Performance Indicators
Sustainable Competitive Advantage
Ishikawa Fishbone Diagram
Price Determination
Supply Chain Concept
Employee Induction
3 Basic Finance Statements
Sales Forecast Accuracy
FMCG Sales Boosting
OTIF - On Time In Full
Merchandising at the Point of Sales
Promotion Mix: Advertising
Employee Motivation
Porter's 5 Forces
CHECK ON BIZ DEVELOPMENT
biz sponsors
BrainCast Relaxation
Advertise on Biz Development
My BrainCast
Energy Booster
Twitter
biz archive
2012
2011
2010
2009
2008
2007

My Introspective

by Laurus Nobilis
My BrainCast

Supply Chain

Supply Chain Management:

Demand and Supply Planning (E)

Supply Chain Management

 

What was the evolution history of supply chain management? What are the main components of supply chain? How big is the importance of supply chain integration?

 

Posted: Jul 2011


The supply chain planning includes both forecasting and production planning. In some cases the supply chain planning involve also the import planning and subcontracting. Supply chain planning is associated with the manufacturers, retailers, and customers as parts of the supply chain.

Supply Chain Management

Manufacturers do majority of the work in both forecasting and production planning. Still, retailers can provide valuable information related to forecast of their sales. In production planning, manufacturers must collaborate closely with suppliers, in order to ensure that the right materials are delivered, as prerequisite for the production.

Demand and Supply PlanningForecasting involves estimating of customer demand. Forecasts indicate the required amount that will be sold, per SKU, for the specific period. Accurate and timely information is needed to do accurate forecasting. Companies are tracking Forecasting Accuracy, as one of the most important business indicators. Inventory management is directly relying on the forecast. Therefore, forecast accuracy is important from perspectives, demand fulfillment and inventory management.

Supply chain management plays a very important role within the company. The supply chain generate most of the costs of the company, due to the width and complexity of the function (manufacturing, warehouse, distribution). Any inefficiency can create tremendous negative impact to the company. On the other hand, good supply chain management can bring huge benefits and competitive advantage to the company.



Production planning is closely related to forecasting. The planning of the production involves balancing product supply with product demand, while taking into considerations, production and warehouse capacities, quarantine time, inventory levels and promotional plans. After a forecast is developed and the current inventory at hand and usage rate is determined, production managers can determine how many units of a specific product should be produced to meet consumer demand. Their main concerns are as follows:

  • Number of units of a specific product to be produced
     

  • Time span over which production will occur
     

  • Availability of materials, machines and production staff to produce the number of units required within the specified time frame

The production planning can be very complex, considering the wide and diverse portfolio, dense marketing grids, inventory and capacity constrains, changeover time, maintenance plans and other factors. Lines within a manufacturing plant have to changeover for different products, requiring additional time during which no products at all can be produced. Too high production plans can create huge inventories with risk of write off of product, or obsolescence of product. Therefore, having accurate product planning is essential to minimize inventory cost, write off cost, production downtime and reduce costs per unit.

 

Continue Reading:

Overview of Supply Chain Components
Historical Development of Supply Chain
Traditional and Modern View to Supply Chain
Supply Chain Activities
Procurement
Order Processing
Demand and Supply Planning
Inventory Management
Warehousing
Transportation
Customer Care
Integrated Supply Chain
Product
Information
Financial Resources
Integration vs. Non-Integration


My BrainCast Self Improvement
blog comments powered by Disqus
 
     
My BrainCast My BrainCast energy Booster My Braincast Deep Sleep
My BrainCast Mandala Meditation My BrainCast Relaxation
my-braincast