Glossary
Supply Planning
Tags: Glossary
The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon, and interval.
What is Supply Planning?
Supply planning is a crucial aspect of logistics that involves the identification, prioritization, and aggregation of all sources of supply necessary for a product or service within the supply chain. It aims to ensure that the right amount of materials or resources are available at the right time and place to meet customer demand.
The process of supply planning begins with the identification of all the sources of supply that contribute to the value chain of a product or service. These sources can include suppliers, manufacturers, distributors, and even internal departments within an organization. By understanding and mapping out these sources, supply planners can gain a comprehensive view of the entire supply chain.
Once the sources of supply are identified, the next step is to prioritize them based on their importance and contribution to the overall supply chain. Some sources may be critical and require special attention, while others may be less significant. Prioritization helps in allocating resources and efforts effectively, ensuring that the most critical sources are adequately managed.
Aggregation is another key aspect of supply planning. It involves consolidating the requirements of different sources of supply to determine the overall demand. By aggregating the demand, supply planners can gain a holistic view of the resources needed to meet customer demand. This allows for better coordination and optimization of the supply chain, reducing costs and improving efficiency.
Supply planning also takes into account the appropriate level, horizon, and interval for planning. The level refers to the granularity at which planning is done, whether it is at the product, SKU (stock-keeping unit), or component level. The horizon refers to the time frame for which planning is done, which can vary from short-term to long-term. The interval refers to the frequency at which planning is conducted, such as daily, weekly, or monthly.
Effective supply planning requires collaboration and communication among various stakeholders within the supply chain. This includes suppliers, manufacturers, distributors, and even customers. By sharing information and insights, supply planners can make informed decisions and adjustments to ensure a smooth flow of materials and resources.
In conclusion, supply planning is a critical process in logistics that involves identifying, prioritizing, and aggregating all sources of supply within the supply chain. It ensures that the right resources are available at the right time and place to meet customer demand. By considering factors such as prioritization, aggregation, and appropriate planning levels, horizons, and intervals, supply planners can optimize the supply chain and improve overall efficiency.