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SCM Planning and Strategy Resources

Supply chain planning involves the process of coordinating and managing the flow of goods, services, and information from the raw materials stage to the end customer. There are several key aspects of planning that are involved in supply chain management, including:

  1. Demand forecasting: Demand forecasting involves predicting future demand for goods and services. This is an important aspect of supply chain planning as it helps companies ensure that they have the right amount of inventory on hand to meet customer demand.
  2. Capacity planning: Capacity planning involves determining the amount of production capacity that is needed to meet demand. This includes determining the number of units that can be produced, as well as the amount of raw materials and other resources that are required.
  3. Inventory management: Inventory management involves planning and coordinating the flow of inventory through the supply chain. This includes determining the right level of inventory to maintain, as well as managing the movement and storage of inventory.
  4. Sourcing and procurement: Sourcing and procurement involves identifying and managing the flow of goods and services from suppliers. This includes identifying and evaluating potential suppliers, negotiating terms and conditions, and managing the purchasing process.
  5. Transportation and logistics: Transportation and logistics involve coordinating the movement of goods and materials from one location to another. This includes determining the most efficient and cost-effective modes of transportation, as well as managing the loading and unloading of goods.

Overall, supply chain planning involves coordinating and managing a wide range of activities to ensure that goods and materials are delivered to the end customer in a timely and cost-effective manner.

Advantages and Disadvantages of SCM Planning

There are several advantages to effective supply chain planning:

  1. Improved efficiency: By coordinating the various activities and resources involved in producing and distributing a product or service, supply chain planning can help to reduce waste, minimize lead times, and increase productivity.
  2. Increased competitiveness: By optimizing the efficiency and effectiveness of the supply chain, companies can reduce costs and improve their ability to respond to changes in market demand. This can help them to remain competitive in their industry.
  3. Better customer satisfaction: Effective supply chain planning can help to ensure that customers receive their orders on time, in the correct quantity, and with a minimum of defects. This can lead to increased customer satisfaction and loyalty.
  4. Risk management: Supply chain planning can help to identify and mitigate potential risks, such as disruptions to the supply of raw materials or unexpected changes in demand.

There are also some disadvantages to supply chain planning:

  1. Complexity: Supply chain planning can be complex, especially for companies that operate globally and have many suppliers and customers.
  2. Cost: Implementing and maintaining an effective supply chain planning system can be expensive, as it may require investing in new software and hardware, as well as training employees.
  3. Limited flexibility: A well-planned supply chain may be less flexible and able to respond quickly to unexpected changes in demand or other disruptions.
  4. Dependence on accurate data: The effectiveness of supply chain planning depends on the accuracy of the data used to make decisions. If the data is faulty or outdated, the resulting plans may be less effective.

Cost Savings: SCM Planning

There are several ways in which effective supply chain planning can lead to cost savings:

  1. Reduced inventory costs: By forecasting demand accurately and managing inventory levels effectively, companies can reduce the amount of inventory they need to hold, which can save money on storage and handling costs.
  2. Lower transportation costs: By optimizing routes and transportation modes, companies can reduce the cost of moving goods from one location to another.
  3. Decreased lead times: By streamlining the production and distribution process, companies can reduce the time it takes to get products to customers, which can reduce the need for expedited shipping and other costly emergency measures.
  4. Improved supplier relationships: By working closely with suppliers to manage the flow of materials, companies can reduce their reliance on emergency orders and expedited shipping, which can lead to lower costs.
  5. Reduced waste: By identifying and eliminating waste in the supply chain, companies can reduce costs and improve efficiency.
  6. Improved forecasting: Accurate demand forecasting can help companies avoid overproduction, which can save money on raw materials, labor, and other production costs.

Supply Chain Quotes

  • “Planning is everything. The plan is nothing.” ~Dwight D. Eisenhower
  • “Intelligence is the ability to adapt to change.” ~Stephen Hawking
  • “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”  ~Taiichi Ohno
  • “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.” ~J. Paul Getty
  • “Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” ~W. Edwards Deming
  • “If anything is certain, it is that change is certain. The world we are planning for today will not exist in this form tomorrow.”  ~Phil Crosby

Strategy Resources

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