What is Supply Chain Planning?

One of the areas that has been gaining the most attention in industries due to its criticality is Supply Chain management. The increase in the complexity of production chains and their consequences in terms of high costs, disruptions and loss of competitiveness for those who don't address this challenge correctly only occurs because we don't know what the future will be like. If we knew exactly what future demand would be like, how long it would take to produce 'x' products and had certainty of supplies and deliveries in certain quantities and deadlines, we could use simple arithmetic to solve our problems. But "life as it is" is not like that. Where there is uncertainty, there must be planning. While Supply Chain Management (SCM) is a broader concept that deals with all aspects of the supply chain, from planning to execution, Supply Chain Planning (SCP) is more focused on the former and is part of SCM.

Therefore, supply chain planning is the set of activities to anticipate and decide how much of each material to supply, in what quantity, in what form and at what time in order to meet a future demand that is still uncertain. In short, this will give us the answers to our main decision-making objective: how responsive do we want to be in order to meet what level of service? It is precisely the imprecision and complexity that make this process full of steps and trade-offs, with several areas involved.

Bibliographies on the subject can vary slightly, especially if we look at it from a conceptual or technological perspective. We'll find lots of materials talking about S&OP and IBP, others focused on Demand Planning, those directed at Operations, and so on. A reference in the field who brings all these perspectives together in a synthesis of SCP is specialist Gerald Feigin, PhD in applied mathematics from Harvard and a consultant to large companies. He divides SCP into 3 main areas: Demand Planning, Integrated Sales and Operations Planning (PIVO or S&OP) and Inventory and Supply Planning. Stratifying the last topic as we understand its different functions and even the technologies applied and scored by eminences such as Gartner, we can, with a touch of poetic and consultative freedom, divide SCP into the following main topics:

• Demand Planning;

• S&OP/IBP;

• Inventory planning;

• Production Planning;

• Supply planning;

• Logistics planning.

To find out what each of these stages is, what their applications are in Supply Chain planning, which technologies are best suited to support execution and the main ways of using each of the topics covered above in practice, we have prepared a complete and totally free ebook for you. Click here, fill in the form and receive your ebook immediately!  

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