Planning keeps you in control of unforeseen events. No one wants to pack up their car and head to the beach only to be greeted by rain. Likewise, successful supply chain planning is critical in today’s rapidly changing business market to avoid major risks and costly disruptions. Implementing supply chain planning can give you strategic and tactical support alongside your supply chain management systems.

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While perfect order fulfillment may be a dream, supply chain planning gets you as close as possible with accurate demand-based forecasts. It provides opportunities to prepare for upcoming supply chain obstacles and avert possible disruptions.

Every company needs robust supply chain planning systems for efficient supply chain management (SCM).

What This Article Covers:

• Supply Chain Planning Systems
• Key Processes
• Effective Strategies
• Primary Benefits
• Best Practices
• Final Thoughts

Supply Chain Planning Systems

Supply chain planning is a process that helps manufacturers plan product journeys and manage assets. This practice includes taking care of the raw materials to handling production, marketing, sales and distribution. These processes help optimize goods delivery and services from suppliers to customers.

Supply chain planning uses real-time demand commitments and analysis capabilities to maintain a balance between supply and demand. It also provides the added benefits of minimizing production and operating costs, enhancing supplier relationships and increasing sales.

Most companies use supply chain planning software to automate and optimize supply chain processes while predicting supply and demand. Some examples include E2open, Blue Yonder, Oracle SCM Cloud, NetSuite, etc.

Why It Matters

Supply chain disruptions aren’t going anywhere, and business executives need to realize the significance of supply chain planning and digital transformation.

Most Chief Financial Officers (CFOs) worry about supply chain disruptions causing moderate and significant business risks.

They’re more concerned about losing control over their supply chains. Supply chains without the following are at risk:

• Technology Adoption
• Automation
• Agility
• Proper Planning
• Focused Operational Processes

Manufacturers are under constant pressure due to increased costs, delays and labor shortages. A lack of planning tools and successful operational approaches makes them miss out on the big picture. It also prevents them from consistently fulfilling customer requirements and aligning the supply with demand.

Advanced supply chain planning systems determine demand using real-time market condition insights, simplify your inventory management and prevent stockouts.

All in all, supply chain planning lays the basic groundwork for your entire supply chain operation.

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Key Processes

1. Supply Management

Managing goods and effective services is the first and foremost step in supply chain planning. It helps answer initial questions like:

• Is there a balance between the supply of goods and actual demand?
• Does supply management meet financial objectives?
• Are requirements based on the demand plan?

2. Demand Management

Then comes the demand management process, wherein the system predicts and forecasts future demand to ensure timely delivery of goods and services. It addresses important questions like:

• How can demand forecasting help manufacturers calculate revenue gain?
• Does inventory stock match demand trends?

3. Production Planning

This step ensures that the production planning process is efficient and organized. It creates production processes based on organizational and customer needs to optimize customer-dependent and customer-independent processes like on-time delivery and production cycle time.

• Will the production planning process determine on-ground operations?
• Do manufacturers have appropriate resource allocation?

4. Operations Planning

Operations planning covers the important steps required to develop robust operational processes. It drives supply chain efficiency by extending forecasting processes into operations.

• Can manufacturers gather data based on the type of operations?
• Will effective scheduling help identify timelines and resources required to perform operational analysis?

5. Sales Planning

Sales planning focuses on key supply chain drivers using integrated operations and warehouse management processes. It provides process and technology expertise to fulfill customer demands.

• Is the organization capable of capturing accurate insights like demand coordination, actual sales, production planning, inventory control and innovation?
• Can the organization meet customer demands?

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Effective Strategies

How often do you revisit your supply chain planning strategy to check how far into the future will the company survive? Continued strategical analysis can avert upcoming supply chain challenges. Let’s look at some essential strategies worth implementing.

Demand Driven

Accurate forecasting tools guarantee the availability of inventory to meet customer demand without storing excess. Supply chain professionals use demand planning to check customer behavior, market conditions, actual vs. projected sales, and other factors to ensure minimal risk.

Predictive analytics and real-time insights give supply chain planners full channel visibility. They can plan accordingly during calamities or supplier unpredictability and tweak pricing strategies to drive revenue.

Agile Planning

Agile planning overcomes market fluctuations by providing opportunities and possible alternatives. It helps adjust supply chain operations and respond to emergencies by implementing tactical and strategic approaches.

It provides companies with the insights necessary to respond to customer needs during emergencies.

Better Business Alignment

With multiple businesses running parallelly, it gets complicated to maintain a balance between operations, strategies and finances. In such situations, companies need a unified business planning approach wherein supply chain planning software can integrate processes, people and technology during planning and strategy stages.

This methodology creates tightly-knit processes allowing more focus on aligning financial goals with operating plans.

Product Management Focus

In most cases, product-oriented decisions have a huge impact on innovation and profitability. Robust innovation only comes with effective collaboration.

The right product management decision can help manufacturers and suppliers optimize operational efficiency and productivity.

Sustainable and Reliable Supply

The above strategies are futile if companies can’t provide reliable and continuous services that comply with customer SLAs. This failure can also lead to unnecessary inventory hoarding, supply shortages and increased operational costs.

Creating a long-term impact can be challenging without adding sustainability as a core strategic component in supply chain planning.

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Primary Benefits

The benefits of supply chain planning extend beyond optimizing operations. Let’s look at some:

Reduce Risks

The main objective of supply chain planning is to minimize risks and enhance responsiveness. With risk management becoming critical, having a foolproof planning strategy helps evaluate potential risks beforehand.

It helps formulate strategies and diversify the supply chain base to ensure unforeseen situations don’t catch you off guard.

Improve Collaboration

Advanced supply chain software provides tools to enhance communication and collaboration with suppliers. Keeping customers and supplies informed in real time improves efficiency and reduces the chances of delayed shipments.

Improved communication strengthens customer relationships in the long run.

Strengthen Customer Loyalty

Supply chain planning improves on-time delivery by providing real-time supply chain visibility. Technology plays a significant role when it comes to satisfying customer requirements.

An automated warehouse management system accelerates processes, making processes efficient and error-free. You also get products to customers faster and more accurately.

Increase Efficiency

Leveraging technologies like the Internet of Things (IoT), artificial intelligence (AI), robotic process automation (RPA), etc., improves delivery times, optimizes supply chain operations and enhances efficiency.

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Best Practices

Besides implementing efficient strategies to connect your supply chain, it’s crucial to adopt some best practices to build a competitive advantage.

1. Plan More Effectively: Most companies use ERP systems to explore areas that provide information about upcoming changes in supply and demand. They typically rely on historical data to make business decisions. However, this information isn’t enough for companies to make long-term decisions.
   For instance, a year’s data will only tell you how much the company will sell in the next quarter. It doesn’t give you a proper analysis to overcome “what-if” situations or unforeseen disruptions. Through connected supply chains, companies can move to real-time supply chain planning.
2. Adopt Unified Supply Chain and Enterprise Planning: Another significant step includes integrating supply chain planning with S&OP and financial planning. It allows companies to synchronize their short-term operational planning with their business processes, improving demand forecasting.
3. Emphasize Customer Demand: Predicting what customers want has always been challenging for companies that deal with consumer-packaged goods. Adopting robust solutions lets enterprises and businesses obtain end-to-end visibility across the supply chain.
4. Leverage Real-time Data: With supply chain planning involving multiple components like suppliers, customers, pricing schemes and channels, managing data via spreadsheets or primary planning tools is pointless.
   Get a solution incorporating real-time data that reduces stockout risk and enhances accuracy.
5. Ensure Agility and Flexibility: With technology that offers efficient planning, you’re less likely to experience disruptions because it provides effortless re-forecasting.

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Final Thoughts

So, do you need supply chain planning?

Avoiding change and sticking to inefficient processes comes with multiple disadvantages. If you’re dissatisfied with how you balance supply planning objectives and capabilities, it’s time to make a change.

Are you ready to reinvent your supply chain using supply chain planning systems? Tell us in the comments.