Supply Chain Planning and Optimization
Supply Chain Management
Changing markets and business requirements necessitate effective supply chain management and thereby make the competitive advantage and flexibility gained through the effective use of supply chain processes even more significant. Customers demand more flexibility, easier access to information about product availability, faster response time, and more customized products. In order to fulfill their demands, more emphasis is given to supply chain planning capabilities that would enable quick reactions to ever-changing customer demands in terms of cost and competitiveness.
Technology is not enough when it comes to planning a supply chain that performs at a world-class level. The planning process and how technology then supports these processes should be focused on as well as organizational components (organizational structure, capabilities, and performance indicators).
Critical business issues include:
· Managing supply chain complexity
· Improving supply chain visibility in all aspects
· Increasing supply chain response time
· Increasing the efficiency of resources by optimization
Sales and Operation Planning is “a process that directs operations strategically to continuously gain a competitive advantage through integration of customer-oriented marketing plans, both for new and existing products and supply chain management. This process gathers all the business plans (sales, marketing, new product development, manufacturing, purchasing, and finance) into a single planning cluster.” – APICS, (The Association for Operations Management)
Sales & Operations Planning (Integrated Planning)
Considering the increase in customer demand and intensifying competition within markets, the importance of supply chain management and its complexity is multiplied. As balancing procurement and demand includes uncertainty, this becomes a critical challenge. The basis of the problem is composed of uncertainty and the complexity of consumer behavior as well as the recent increase in demand for customized products. Due to ever-changing customer needs, supplying products in the requested amount and quality is getting harder every day
Supply planning is the entire planning process which includes distribution, manufacturing, and procurement operations according to demand forecasts, considering capacity constraints and material availability. The goal of the process is planning supply that would satisfy the demand for the product/service offered in the best way possible.
Within the scope of inventory management lies identification of production strategies and designation of inventory storage points and analytical inventory levels. The goal of this process is to reduce the working capital requirements through minimum inventory levels while preventing sales loss and customer dissatisfaction.
Analytical Inventory Management