Supply Chain Planning involves predicting future requirements so that demand and supply can be synchronized.
To gain important skills in managing supply chains, consider participating in Supply Chain Management Training Course offered by pdtraining in Lagos and other cities in Nigeria.
Supply Chain Management (SCM) involves three major steps namely planning, execution and delivery. Planning is a vital part of SCM because it ensures that resources are fully utilized to effectively deliver goods and services from the supplier to the customer. The aim of planning is to eliminate the difference between demand and supply so that demand is matched by the supply at all times. Planning also takes into account the various possibilities that may hinder the matching of demand and supply. The possibility of emergency situations is also examined. To predict obstructions and constraints, data is collected and analyzed.
Effective planning helps companies to optimize obtaining, production and distribution of goods and services, thereby keeping wastage at a minimum and ensuring the meeting of customer demand. Supply chain planning also includes supplier performance management (SPM) and supplier risk management. The broader Supply Chain Management, however, involves:
- Supply Chain Planning
- Supply Chain Strategy
- Asset management
- Inventory management
- Order generation, order taking and order fulfillment
- Management of Returns
The planning phase of SCM evaluates every aspect of the procurement, manufacturing and delivery of the goods and services in terms of human resources, transportation, costs, risks, inventory, return, demand and customer. As the ultimate goal of supply chain planning is to balance demand and supply, customer satisfaction makes its core. Depending on the demand of customers, supply must be adjusted. To ensure that this is successfully done, planning becomes crucial. Supply chain planning, therefore, also involves:
- Building of operational strategy
- Identification of strengths and weaknesses in a supply chain
- Determining of supply options
- Evaluating choices for cost reduction
- Determining the type, place and quantity of customer demand
- Determining changes in demand
Companies that have effective supply chain plans are able to meet their customers’ demands at all times, even if it is fluctuating. They reduce costs by eliminating wastage caused by overproduction, and unnecessary use of resources. As supply chain planning also includes looking for suppliers/resources that can provide stability and reduce costs, it creates a strong network of supply that is adjusted to demand. Creating a balance between demand and supply ensures that companies enjoy customer satisfaction and increase their customer base on the foundation of a strong supply chain. As supply chain planning is the primary step in supply chain management, it is vital to successfully use it. Related Article…
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