Direct selling : Producer sells product to Consumer without intermediaries Indirect selling : Product sold through Retailers, through Single tier, Multi-Tier or Hybrid tier supply chain.

Demand Planning

Used to plan resources for

It is of 2 type :

1. Quantitative : Using older data to predict future outcomes. Time Series Analysis and Regression Analysis used. Demand Pattern. Has patterns such as trend, seasonal, cyclical, random.
2. Qualitative : Based on intuition and informed opinion. Business trends, Expert Opinions, Market Research, Test Marketing. Done through Delphi, Game theory and Unaided judgement.

Demand and Demand forecast are responsible for planning, which give rise to production schedule and purchasing schedule.

Supply Chain Planning

Consists of predicting future, balance of supply and demand.

Execution requires : Order fulfillment, procurement, warehousing, transporting. Shipping requires : Planning optimization, Load optimization

Transportation planning

Assessment, Evaluation and Design required. Load Scheduling, Route Scheduling, Transport Planning softwares required.

Master Planning and Material Requirements Planning

Master Production Schedule.

Inputs to it are forecast demand, customer orders, capacity constraints, Lot size, Production lead times, production and inventory cost, time-phased plan of end items to be produced, quantity available to promise, projected available inventory balance.

This drives MRP.

Benefits :

1. Smooth demand signal, protects lead time and helps book future deliveries, single communication tool for business, prioritizing requirements, stabilizing production

Materials Requirement Planning(MRP)

Forecast Sales Order, Bill of materials, Current Inventory, Scheduled receipts are inputs. Outputs are Purchase order requisition and work order requisition.

Helps with managing exceptions, expedition, de-expedition and cancellations.

Benefits :

1. Reducing inventory levels
2. Reducing component shortages
3. Improved Customer Services
4. Reduced manufacturing cost and lead time
5. Less scrap
6. Improved plant efficiency
7. Reduced overtime
8. Improved productivity

Supply Planning : Capacity, Procurement, Supplier, Schedule, Inventory and Replenishment Planning

Capacity Planning

Capacity is the maximum amount of work that a system can do with the current setup. Planning requires Investment planning and effort planning, after encountering change in demand, and consequent discrepant production. Human resource and Factory capacity are required, and are complex and has various complexities.

1. Lead Strategy : Meet service levels and have less lead time
2. Lag Strategy : Wait till current capacity is exhausted
3. Match Strategy : Gradual change in capacity.

Procurement Planning

Questions this planning solves : When to buy, Which source, How much to buy, what to buy

Gives companies a realistic expectation of meeting requirements and by when.

Best practices :

1. Create a supplier pool
2. Have the right specifications
3. Ensure fair bidding
4. Mutual acceptance of onboarding

Supplier Management

Maintaining a strategic and collaborative relationship with suppliers.

1. Enables mutual benefit by leveraging strategic suppliers and driving innovation, ahead of competition

Schedule Planning

Arranging, Controlling, Optimizing workload for production and assembly. Takes account of lead times.

1. Forward scheduling
2. Backwards scheduling

Inventory Planning

Inventory can be finished goods, Work-in-progress(WIP) goods and Raw Materials.

1. Balance supply and demand, to minimize cost
2. Maintaining optimal inventory

Methods used :

1. Economic Order Quality : optimal quantity to reduce holding costs
2. Continuous Review Model : review stock level and replenish
3. Periodic Review : Place order on periodic basis

Replenishment Planning

1. Right quantity to maintain service levels
2. Inputs taken are safety stock and reorder levels