Introduction to Supply Planning 

Introduction to Supply Planning 

What is supply planning? Logistics professionals use supply planning solutions to manage resources and forecast customer demand. This complex process involves tracking everything from raw materials at the distant ends of distribution channels to the end users’ final delivery point.

Supply chain planning optimizes goods movement from raw materials to customers. Supply planning also concerns reverse logistics, including recycling or discarding items that customers return.

Organizations require robust supply planning solutions so they can address the logistical challenges in today’s global market, such as:

• Fluctuations in consumer demand
• Shortages caused by natural disasters 
• Disruptions in the movement of goods because of civil unrest and war
• Lack of products due to labor problems
• Fewer supplies reaching manufacturers during disease outbreaks (such as the global coronavirus pandemic)
• Unpredictable economic conditions (consumers buying more items than usual during periods of relative prosperity or reducing orders because of new budgetary constraints)

Supply Planning Overview

Several recent trends are impacting supply chains. For example, with the rise of omnichannel retail options, customers increasingly shop online for home or office delivery of products when not responding to advertisements, social media and viral videos fueling their desire.

However, many consumers still shop inside brick-and-mortar locations or place orders that they pick up at a local store instead of having items brought to them. Accordingly, you must plan for BOPIS orders (buy online, pick up in-store) and ship-from-store scenarios in your supply chain planning.

Such omnichannel sales add more complexity to the supply chain since you need unified inventory management that straddles digital channels and physical channels. Customers review available stock whether shopping online or inside a nearby shop. Because of this, consumers expect to see consistent pricing regardless of what channels they shop through. If they notice an item costs less when calling a company than when visiting in person or browsing a website, they may become suspicious that businesses are trying to take advantage of them.

Furthermore, new developments in artificial intelligence enable companies to automatically analyze huge amounts of information that they record about consumer demand, in comparison with historical sales records, including seasonal fluctuations and demand driven by viral marketing. Given these factors, companies need to be as agile as possible to respond more effectively to modern shopping demands.

The supply chain planning experts at ketteQ have created solutions that leverage AI and real-time data analytics to help companies enhance their agility and become more responsive to shoppers. Such capabilities are crucial in navigating supply chain disruptions and consumer demand.

Of course, supply chain planning goes beyond just inventory and logistics. It also has to do with companies getting more involved with raw materials being grown or mined from the earth to facilitate product delivery.

In case of customer dissatisfaction or government-mandated product recalls, supply chain planning also expedites returns and helps determine which goods can go back into inventory and which must be recycled or destroyed. 

Key Components of the Supply Planning Process 

Here are the most crucial components of the supply planning process for you to keep in mind:

Demand forecasting

Companies use demand forecasting to support their integrated business planning efforts and optimize supply chain operations.

Inventory management

You shouldn’t restrict information to silos in your organization. For more efficient inventory handling, use a cloud-based solution.

Response and supply planning

Rely on AI and machine learning to make supply chains adaptable and better able to meet consumer demand,becoming more responsive to shifting market conditions.

Sales and operations planning (S&OP)

Manufacturers and distributors improve their decision-making process by using data and performance metrics in real-time, with artificial intelligence, to make sense of the torrent of data they collect for their S&OP initiatives.

Demand-driven replenishment (DDMRP)

What is replenishment in cycle in supply chain? It has to do with DDMRP, used for replenishment optimization. The topic often comes up among executives wondering about replenishment meaning in supply chain management.

Regarding manufacturing planning and control for supply chain management, you use Demand-Driven Replenishment(DDMRP) at the heart of your supply planning efforts. Using predictive models supports agile material requirements planning. 

After all, what is supply planning without considering what is replenishment? Or, how do you answer the question of what is replenish amount?As an inventory replenishment definition, you balance the amount of stock you need to meet demand, using a replenishment planning solution to re-order inventory before it runs out.

Supply chain monitoring

Organizations use control towers(software) to obtain real-time visibility in managing supply chain stages to efficiently coordinate logistics.

From Supply Planning to Integrated Business Planning (IBP)

Integrated Business Planning provides a framework to integrate financial planning, strategy and analysis as you work to optimize your operations. An IBP initiative unifies your team toward the same supply chain planning goals, as you weigh supply planning vs. demand planning.

The industry is evolving from traditional supply chain methods to AI-driven integrated planning. With more information about consumer demand and data about external factors (from local shortages to labor strife), you need AI systems to make the most of this information and improve supply chain planning, including your inventory replenishment methods.

You’ll minimize holding costs and reduce the time to market as you create new offerings and better understand the relationship between replenishment requirements and demand planning.

Artificial intelligence and machine learning facilitate faster and more comprehensive production planning and scheduling.

Many organizations prefer to use cloud-based solutions instead of maintaining servers in their local data centers because the cloud provider gives them greater flexibility. And centralizing this information enables you to break down data silos so your team can pivot on new trends faster.

ketteQ’s integrated business planning solutions enhance supply chain flexibility and break down data silos, providing an agile, scalable and collaborative option. They help optimize the supply planning process,giving you objective production planning metrics to support all aspects of your supply chain planning, including production planning, supply planning and manufacturing planning.

Data-Driven Planning Solutions Are Critical for Working With Today’s Complex Supply Chain Environment

When you have concerns about replenishment planning in supply chain management, it’s time to partner with logistics professionals such as the team at ketteQ. That’s particularly important, given the critical role of integrated, data-driven planning solutions in today’s complex supply chain environment. 

Your organization must be adaptable and proactively manage the supply chain for operational success. ketteQ’s supply chain planning solutions address the challenges of today’s fast-paced,demand-driven market, enabling end-to-end visibility and optimization. To learn more about how we can support supply planning, contact us today.

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