Download to read offline
Demand Planning Process in Supply Chain Management.pptx
- 1. Demand Planning Process inSupply Chain Chetan Chauhan
- 2.
- 3. Correlation between SCPlanning Process Demand Planning Data Collection Forecasting Demand Review Forecast Adjustments Scenario Analysis Sales & Operations Planning Demand Review Supply Review Pre-S&OP Meeting Executive S&OP Meeting Scenario Planning Supply Planning Resource Allocation Production Planning Supplier Coordination Capacity planning Risk Management Inventory Planning Safety Stock Calculation Reorder Point Calculation Inventory Review Stock Levels Optimization Inventory management Systems Procurement Planning Supplier Selection Order Placement Supplier Management Cost Analysis Risk Management Production Planning Production Scheduling Resource Allocation Quality Control Maintenance Monitoring/Adjusting production processes Distribution Planning Logistics Planning Route Optimization Delivery Scheduling Warehouse Management Monitoring delivery performance Historical sales data Market trends Customer Orders Promotions Seasonal Effects Forecasted demand Supply capacity data Sales and marketing input Financial goals Inventory levels Forecasted demand Resource availability Supplier capabilities Production capacity Lead times Forecasted demand Current inventory levels Lead times Supplier performance data Safety stock policies Production requirements Supplier capabilities Cost data Market conditions Lead times Production schedules Resource availability Quality standards Work orders, Production targets Production output Delivery requirements Logistics data Customer orders Distribution center capacities Forecasted demand Adjusted demand Recommendations for Inventory & Production schedules Business plan Aligned demand & supply plans Strategic recommendations for resource allocation Production schedules Resource plans Supplier orders Risk mitigation strategies Inventory levels Reorder points Safety stock levels Inventory optimization strategies Purchase orders Supplier performance reports Procured materials Cost savings Production runs Completed products Quality assurance reports Production efficiency improvements Delivery plans Optimized routes Scheduled deliveries Distribution performance metrics Inputs Outputs Processes Start Processes End
- 4. Planning Process inSupply Chain Supply Planning Process Long Term Planning Strategic Planning Mid Term Planning Tactical Planning Short Term Planning Operational Planning
- 5. Long-Term Planning (StrategicPlanning) Key Activities Capacity Planning Deciding on the size, location, and capabilities of facilities such as warehouses and production plants. Supply Chain Network Design Determining supplier relationships, distribution networks, and logistics partnerships. Technology Investments Implementing supply chain technologies like ERP, WMS, and automation tools to future-proof operations. Procurement Planning Identifying long-term supplier strategies, developing relationships, and securing raw material sources for future demands. Product Lifecycle Management Planning new product launches, end-of-life cycles, and ensuring the supply chain can support product transitions. Objective To create a supply chain infrastructure that supports business growth, market expansion, and resilience to long-term disruptions. Time Horizon 2 to 5 years. Key Focus Shaping the overall structure and strategic direction of the supply chain. Supply Chain Planning Process Demand Planning Anticipating long-term market trends and future customer demands to guide strategic decisions. Sales & Operations Planning Aligning high-level business strategies with long-term sales and operational capabilities.
- 6. Mid-Term Planning (TacticalPlanning) Key Activities S&OP Aligning mid- term demand forecasts with production, inventory, and supply strategies to ensure a consistent flow of goods. Supply Planning Determining how to meet forecasted demand by planning production schedules, inventory levels, and supplier deliveries. Inventory Planning Defining safety stock policies, reorder points, and inventory levels to meet forecasted demand while minimizing costs. Capacity Planning Adjusting production schedules and facility usage to match forecasted demand within the available resources. Procurement Planning Setting mid-term supplier agreements and securing resources to maintain supply chain stability. Production Planning Scheduling production to align with expected demand and adjusting for capacity constraints. Distribution Planning Ensuring the logistics network is prepared to deliver products efficiently to meet customer expectations. Objective To maintain a balance between supply and demand, optimize inventory and production levels, and ensure supply chain efficiency over the medium term. Time Horizon 6 months to 2 years. Key Focus Translating long-term strategy into detailed plans that balance supply and demand, and optimize operations. Supply Chain Planning Process Demand Planning Refining demand forecasts based on market data, historical sales, and future trends. Sales & Operations Planning Reviewing and adjusting sales forecasts to align with available resources and operational plans. Supply Planning Matching forecasted demand with supplier capabilities, production resources, and distribution capacity. Inventory Planning Setting inventory targets, safety stock levels, and replenishment strategies to avoid stockouts or overstocking. Capacity Planning Ensuring the right level of production capacity to meet demand without causing inefficiencies. Procurement Planning Balancing supplier lead times with the mid-term production schedule. Production Planning Scheduling production runs to meet demand within the constraints of available labor, equipment, and materials. Distribution Planning Optimizing the logistics network for cost-effective and timely delivery.
- 7. Short-Term Planning (OperationalPlanning) Key Activities Order Fulfillment Managing customer orders, ensuring timely deliveries, and meeting service-level agreements. Inventory Replenishment Continuously monitoring stock levels and triggering reorders to prevent stockouts. Production Scheduling Allocating resources, labor, and materials to meet immediate production needs. Logistics and Distribution Planning Optimizing transport routes, delivery schedules, and shipping options to minimize costs and delivery times. Objective To ensure the smooth execution of daily operations, minimize disruptions, and meet short-term customer demand. Time Horizon Daily to 6 months. Key Focus Managing day-to-day operations to meet immediate customer demand and ensure smooth execution. Supply Chain Planning Process Demand Planning Adjusting short-term forecasts based on real-time data, market conditions, and customer orders. Sales & Operations Planning Aligning short-term sales forecasts with available inventory and production capacity. Supply Planning Ensuring suppliers can meet immediate production needs, and coordinating with distribution centers. Inventory Planning Real-time stock monitoring and inventory replenishment to ensure smooth operations. Capacity Planning Managing resources and labor to meet immediate production requirements. Procurement Planning Ordering necessary raw materials or components in time to meet short-term production schedules. Production Planning Day-to-day scheduling of production activities to fulfill orders and meet customer expectations. Distribution Planning Optimizing delivery schedules and routes to meet short-term demand efficiently.