Businesses are always looking to balance supply with demand to remain competitive and profitable. But charting the flow of supply and demand sometimes feels impossible.
You can’t predict the future, but you can make accurate forecasts about supply and demand by researching and analyzing the data. This is called supply chain planning. Let’s take a closer look at supply chain planning and what it means for your business planning.
What Is Supply Chain Planning?
Supply chain planning is the process of optimizing procurement, manufacturing and distribution of goods and services from manufacturers and suppliers to customers. This includes adjusting the plan according to demand planning forecasts, while keeping in mind production capacity constraints and availability of materials.
The goal of supply chain planning is to meet the demand of customers while avoiding product overstock and other inventory management inefficiencies that bite into profits. Therefore, supply chain planning requires a supply management structure that meets demand effectively through maintenance, policy regarding stock, production and sourcing parameters.
When using supply chain planning, you also seek to build strategic partnerships with suppliers and third-party manufacturers to create visibility and flexibility in vendor-managed inventory. This reduces the effects of demand volatility.
Project management software helps you put in good supply chain management data to get good data out. ProjectManager is a cloud-based software that collects real-time data to help you understand your customer’s demand better. Our live dashboard gives you a high-level view of what’s happening in your supply chain plan. Try ProjectManager free today.
What’s the Role of Supply Chain Planning in Business?
When supply chain planning, you must take production capacity data about suppliers into account and note if they’re delivering completed products, or parts that will be assembled further down the supply chain. This helps you determine how much product they’ll have available and when.
Supply chain forecasting helps you look at supplier data and determine the amount that should be ordered and delivered over a specific time period. Of course, other factors are at play, such as economics, technology and weather.
Demand planning is also important, as it drives the decision-making in supply chain planning. With demand forecasting, you estimate the goods and services that customers will buy in the near future. In fact, any forecasting that zeros in on supply and demand is going to inform your supply chain plan.
Who Should Execute Supply Chain Planning?
Depending on the organizational structure of the business, the supply chain plan can be managed by any number of professionals. Usually, the person in charge of managing and executing supply chain planning is a supply chain manager.
The supply chain manager oversees the entire logistical aspects of the supply chain. This includes the supply chain plan (or strategy) supply chain management, the source of raw materials and services, manufacturing and boosting productivity, delivery and logistics and the return system for defective or unwanted products.
A supply chain manager is responsible for reducing stock shortages and keeping prices down. While not specifically within the scope of their job description, the supply chain manager can also recommend ways to improve productivity, quality and the efficiency of operations.
Supply Chain Planning: Processes
There are many steps to supply chain planning. These are some of the processes one must undertake in order to achieve optimal manufacturing efficiency:
- Supply Management: Start with the management of your supply of goods or services. Find a balance between the supply of goods and the demand for these products, while also keeping in mind production planning and the financial objectives of the business. You need to determine how to best meet these requirements.
- Demand Management: Next, forecast the future demand for your goods and services. This requires accurate demand forecasting, matching inventory based on demand trends and improving the bottom line for your product or service. Demand planning is key to creating a successful supply chain plan.
- Production Planning: Next is to consider production planning and manufacturing processes. The critical aspect of production capacity planning is to determine factory operations. Part of this is figuring out the number of resources and how they’ll be allocated across a schedule.
- Operation Planning: What are the operational processes you will implement to maintain an effective supply chain? This step requires scheduling to figure out a timeline and resources that meet operational goals. You’ll also want to do a gap analysis on performance reporting, identification, cost and benefit analysis.
- Sales Planning: Sales should be integrated with operations and warehouse management. Businesses need to respond to actual sales, marketing, demand coordination, production planning, inventory control and more. The goal is to make sure customer demand is met through production, distribution and purchasing processes.
Best Strategies for Supply Chain Planning
While those steps are important, it’s also crucial to have strategies in place for effective supply chain planning.
- Demand-Driven Planning: The most successful supply chain strategies are demand-driven. That means using accurate demand forecasting tools, managing risks effectively, and using real-time insights that tweak pricing strategies to keep revenue growing.
- Intelligent Planning: Adapt the supply chain plan to fluctuating market scenarios. Agile planning allows for fine-tuning of factory operations and manufacturing processes that are sensitive to changing customer needs. This provides manufacturers with greater visibility across the value chain. There are also analytical insights that help manufacturers to respond faster and better.
- Integrated Sales, Operations and Strategic Business Planning: Coordinating sales, distribution, logistics and other operations adds efficiency, but this can be difficult. Use a unified business planning approach to integrate all the people, processes and technology. This improves forecasting by involving accounting and tying everything together.
- Product Management: Product decisions can impact a business’s productivity. Collaborate with product teams to make sure new products are made for the right price, time and place. Demand, productive capabilities and operational efficiencies can all be impacted. Collaboration between all involved parties is essential to ensure efficiency.
- Continuous Supply: All previous strategies depend on having a continuous and reliable supply. Without it, a business can have excessive inventory, adding to its operational costs. With the right technology, infrastructure and analytical insights come a smoother supply chain plan.
Secrets for Better Execution
The truth is, there are no secrets for better supply chain planning and execution. The answers are obvious, but that doesn’t mean they’re always followed. For example, you want to have dependable suppliers, but many will only look at the bottom line. While cost is important, reliability is more important. You need to depend on them to deliver as contracted.
While technology is another factor that creates better supply chain planning, it should never be at the expense of your employees. Invest in their development to create untold dividends. There are always issues that come up every day when manufacturing, and if your people aren’t up to the task, your supply chain will suffer.
Working to continuously improve the supply chain plan is how to stay competitive. That means having the tools to monitor your performance. While your people are your most important resource, project management tools can help you monitor your processes in real time. There are also warehouse management systems and other tools that further streamline your processes.
How ProjectManager Helps With Supply Chain Management
ProjectManager is a cloud-based software that delivers real-time data and helps managers make more insightful decisions when manufacturing. Our multiple project views let you work how you want while keeping everyone on the same page.
Plan Processes on Gantt Charts
When making a supply chain plan, you need to link dependencies, set milestones and make assignments to avoid delays. Most Gantt chart software will provide these features, but ProjectManager goes further. You can filter for the critical path to determine the essential steps in your manufacturing process. Then, set a baseline to compare your actual effort to your planned effort.
Keep Your Teams Working at Capacity
Keeping your teams working at capacity requires transparency into their workflow and availability. ProjectManager’s resource management tools let you know who can work, when. Use our color-coded workload chart to see who is over-or-under allocated, then balance their workload for greater productivity. If you see issues, reallocate resources and keep everyone working.
Get Real-Time Insights Instantly
For a high-level view, use our real-time dashboard. Unlike other software, you don’t have to configure it. It’s up and running, and ready to show you various metrics. For greater detail, use one of our many one-click reports. Filter the reports to show just the data you want, then share them to update stakeholders.
ProjectManager is award-winning software that lets you organize and streamlines processes. With tools that help you better plan, monitor and report on your projects while connecting teams to foster collaboration, our software is the only technology you’ll need to gain efficiencies and work more productively. Try ProjectManager today for free.