What, Why, and How of Supply Chain Planning

Supply chain planning is a very important function of any business that deals with goods and services. The supply chain planning domain is growing and people want to be a part of this growing function. However, before you decide to get into supply chain planning, you need to understand what it is. 

Supply chain planning has a lot of significance in both modern and traditional companies. Let’s try to understand the nuances better. 

What is Supply Chain Planning?

Supply chain planning is not limited to inventory and logistics management, there’s much more to it. If your business is into manufacturing, the supply chain planning process begins right from the point where you need to bring in vendors who will supply the raw materials and it ends where the final delivery of the final product is made. 

However, the process has now become a recurring loop with reverse logistics and returns coming into the picture. Also, with supply chain planning, you get to keep a tab on the consumers at different levels and hence, you become more aware of their practices. 

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Components of Supply Chain Planning

There are different components and functions of supply chain planning. Let’s try to get a basic understanding of what these components are and the role they play. 

Demand Forecasting

Demand forecasting is the backbone of the supply chain planning process. If you plan on producing goods and selling them, it is important to plan. However, ascertaining the number of goods that you will sell in a week or a month is almost impossible. Here’s where demand forecasting comes into the picture. 

With demand forecasting, you can create a plan for last-mile delivery. As a company tends to produce goods based on the demand forecast, it is a very important function. Demand forecasting involves both qualitative and quantitative insights. 

Inventory Management

Inventory management is another important function of supply chain planning. Companies have dedicated manpower to manage inventory. Their job involves maintaining an adequate inventory that ensures that the product becomes available at the right place and at the right time. However, it also requires maintaining the optimum balance to avoid aging of the manufactured products. 

Today, inventory managers have access to cloud-based planning solutions that help them with a unified view of the inventory. It helps them in planning better. Several other predictive AI tools have also come into the picture to optimize the process. 

Sales and Operations Planning

Sales and operations planning is one of the most important components of supply chain planning. With the help of the S&OP process, you get to control the entire system. The process allows you to overview the existing situation and then make incremental decisions to improve sales and distribution. 

The process allows you to measure your performance against a pre-decided benchmark. Also, the entire process aims at better utilization of data to meet the distribution imperatives of the company. 

Supply Chain Monitoring

While you might have everything in place, it is important to ensure that everything is going as planned. Hence, monitoring the supply chain becomes a major activity. When you monitor the supply chain, it is most likely that you will have access to all the information through the control tower. You can use the tower to get a fair picture of how the supply chain of the company is working. 

Also, supply chain monitoring can give you a plethora of insights. You will get a chance to figure out what is working for the company and what is not. You can then use these learnings to improve supply chain planning.

Benefits of Supply Chain Planning

Supply chain planning offers a plethora of benefits to the business. It helps the company streamline the entire process and keep a tab of the places the goods go before they reach the final consumer. Also, if the planning is done efficiently, you can save a lot of money. 

Efficient supply chain planning improves customer delight as it enables the entire system to deliver the right products at the right time. Therefore, supply chain planning has now become an inseparable part of most businesses, especially those that deal with physical goods. 


If you are interested in getting into the supply chain function, it is important to understand how the function operates. While you might receive on-the-job training that will help you understand the supply chain better, you must have a basic understanding of the function. You can get enrolled in the IIMU Digital SCM course . The course is brought to you by IIM Udaipur in collaboration with Imarticus Learning.

The course will shed some light on the basics of the supply chain along with focussing on digitization of the entire process. The course will also allow you to work on different projects, giving you hands-on experience. Enrol now to ensure that you have a successful future in the field of supply chain planning. 

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