The What, Why & How of Supply Chain Planning

The What, Why & How of Supply Chain Planning

Supply chain management is the sum of all such activities at different stages that ensure the timely supply of a product from the manufacturer’s factory to the customer’s end. Other stakeholders include vendors, whole-sellers, dealers and retailers on one end and warehouse and logistics partners on the other. 

Supply chain planning is an integral part of supply chain management. Businesses seek to optimise product delivery and enhance customer experience by integrating supply chain planning into their operations. Now is the correct time to opt for a supply chain analytics career and exploit the booming job opportunities supply chain management presents. 

Read on to learn more about supply chain planning.

What is supply chain planning?

Supply chain planning is the process of predicting the demand for products and services and planning inventory with respect to time while controlling production, distribution, marketing, and sales accordingly.

Why do businesses need supply chain planning?

A Supply and Operations Planner can significantly impact your business prospects. There are several advantages of practising rigorous supply chain planning. Some of them are mentioned below – 

  1. A business lacks vision and readiness without a supply chain plan in place. Demand dynamics in an uncertain future can be nullified with a reasonable forecast and subsequent action plan.
  2. The supply chain plan alerts us regarding any future technology shift and hence adds to an organisation's preparedness. 
  3. The supply chain plan provides us with information from other developed nations regarding whether a product would become obsolete in the near future and hence needs to be dropped from production at the earliest. The plan helps the organisation to reorient the product.
  4. A supply chain plan helps an organisation reduce costs of production and inventory. It optimises revenue and maximises profit.
  5. A robust supply chain plan helps customers get the desired product on time, enhancing customer satisfaction and retention. With a little more consistency, the customer becomes an advocate of the brand. Thus, product advertisement moves to the next level at no extra cost.
  6. The supply chain plan is the basis of logistics and warehouse planning. The cost of these operational areas may be controlled with prior information and schedule.
  7. A supply chain plan helps an organisation to set a clear reorder benchmark for all production components. This prevents an entire production line from being idle due to a shortage of one or more components.
  8. It helps determine the marketing schedule and chalk out its expenses.
  9. The supply chain plan also determines the distribution network planning so that neither the distributors starve from inventory nor are overburdened.  
  10. It creates a vivid production plan with optimum design, manpower, and equipment. 

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How can supply chain planning be implemented successfully?

Successful supply chain planning involves sales, marketing, and production teams discussing demand planning using historical data. Data science helps in the seamless delivery of past information, and AI-based software models help analyse demand prediction. The demand forecast is followed by inventory planning accordingly, and resultant feedback is passed on to the production and logistics team for action.

While supply chain planning is a complex process considering several factors, a few key elements seek maximum attention. They are as follows - 

  • Demand Planning

A realistic demand forecast lays a robust foundation for the supply chain planning process. Demand is a function of market conditions, technology, product support, ready availability, functional alternatives, competition, price and government policies. In addition, AI and data analytics help generate real-time demand.

  • Inventory Planning

Demand and inventory planning go together. When demand for a given period is ascertained, the operation team may plan the inventory for the said period. Proper inventory planning optimises the production cost and helps to maximise the profit for a given sale by curtailing surplus.

  • Supply planning

Inventory planning includes vendor management for supply required for production. Supply of each and every component, raw materials, etc., has to be monitored separately to avoid a surplus in production.

  • Production planning

Production is a function of raw material, manpower and machine capacity. The objective is to produce as per targeted numbers with optimum resource utilisation incurring minimum waste.

  • Sales and operations planning 

Sales and operations planning essentially bring cross-functional teams to meet and discuss each other’s viewpoints to reach a common goal. It helps the marketing and sales team be on a common platform with the operations team and understand each other’s challenges. 

However, this meeting is not limited to sales, marketing and operations teams in large corporations. Departments of finance and human resource are also a part of the meeting so that their observations and challenges may also be noted. Finally, the entire team moves towards a workable road map to reach the target. 


The role of a Supply and Operations Planner requires enormous hard work and dedication and is a fiercely competitive field. 

Enrolling in the Professional Supply Chain Management Certification course and Supply Chain Analytics Course at Imarticus will help you achieve your dream. This programme will assist you in learning about supply chain planning from the best in this industry. The course is perfect for professionals looking to switch roles and build a supply chain analytics career

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