What is supply chain planning?

Supply chain planning is the process of managing and organising the various activities involved in sourcing, producing, and delivering goods and services to customers. It involves the strategic coordination of resources, information, and processes across the entire supply chain, from suppliers to manufacturers, distributors, retailers, and end consumers. The main goal of supply chain planning is to ensure that products and services are available at the right time, place, and quantity while minimising costs, optimising inventory levels, and improving overall efficiency.

What are supply chain planning systems?

Supply chain planning systems are software solutions or tools that organisations use to manage, coordinate, and optimise various aspects of their supply chain operations. These systems help companies to plan, execute, and monitor the flow of goods, information, and resources from the point of origin to the point of consumption in a cost-effective and efficient manner. By implementing a supply chain planning system, companies can gain better visibility and control over their supply chain operations, identify potential risks and bottlenecks, reduce costs, improve customer service, and enhance overall business performance.

What are the basic supply chain planning steps?

Demand planning: Forecasting customer demand to determine the necessary production levels, inventory requirements, and distribution strategies.Supply planning: Identifying and securing the resources needed to produce goods and services, including raw materials, labour, equipment, and transportation.Production planning: Scheduling and coordinating manufacturing processes, including capacity planning, resource allocation, and production sequencing.Inventory planning: Managing the levels of raw materials, work-in-process, and finished goods to meet customer demand while minimising costs associated with excess inventory or stockouts.Distribution planning: Optimising the transportation, warehousing, and distribution of goods from manufacturers to customers, including route planning, carrier selection, and shipment consolidation.Sales and operations planning (S&OP): Aligning the goals and objectives of various functional areas, such as sales, marketing, production, and finance, to create a unified and integrated plan for the entire supply chain.

How can supply chain planning be improved?

Effective supply chain planning requires a comprehensive understanding of the internal and external factors that can influence the supply chain, such as market trends, customer preferences, supplier capabilities, and regulatory requirements. It also involves the use of advanced planning software, analytical techniques, AI for process automation and optimisation, and collaboration among supply chain partners to optimise decision-making and adapt to changing conditions.

Supply chain planning

An integrated approach to planning helps you run a sustainable, risk-resilient supply chain in the face of constant change.

Orchestrate demand and supply with real-time insights and AI-driven automation

Adapt quickly to supply chain conditions

Improve forecasting and address potential constraints with predictive analytics. Automated alerts simplify decision-making and adaptation, ensuring resilience and profitability.

Supply chain planning software

Build an agile, sustainable, and risk-resilient supply chain with software from SAP.

Demand forecasting and management
Use demand sensing, statistical modelling, and machine learning algorithms to make accurate short- to long-term forecasts.

Multi-echelon inventory optimisation
Set inventory targets to maximise profits, while leaving a buffer to help you meet unexpected demand.

Sales and operations planning (S&OP)
Collaborate on a cross-departmental sales and operations plan that balances inventory, service levels, and profitability.

Response and supply planning
Optimise supply management with plans based on prioritised demands, allocations, and constraints, such as production capacity.

Explore integrated business planning

Priority-based order promising
Allocate the right stock to the right demand in a supply shortage situation, and speed up delivery for key customers.

Optimised stock allocation
Allocate stocks based on business priorities, considering suitable alternatives.

Analytics-driven decision support
Analyse supply and demand and product allocation to understand the influence of product availability constraints.

Explore available to promise

Master operational planning
Optimise supply chain operations toward service, cost, and capital for both short- and medium-term horizons.

Drive efficiency and agility in planning and scheduling
Manage changes to your operational plan in real time with feedback loops enabled by tight integration across ERP, business planning, and your MES system.

Leverage planning automation for all manufacturing environments
Use constraint modelling for discrete or process manufacturing and apply advanced algorithms to yield insight and solve problems.

Explore production scheduling

Trading partner collaboration
Assure materials supply through planning, inventory, PO, and quality visibility and collaboration with trading partners.

Planning collaboration
Share demand plans and forecasts with your trading partners to receive commits and cut planning cycle time.

Purchase order collaboration
Digitally exchange POs, ship notices, multi-tiered order confirmations, invoices, and more with trading partners.

Inventory collaboration
Connect with suppliers to detect disruptions and improve visibility into stock on hand, replenishment, and max/min levels.

Quality collaboration
Exchange quality notifications, inspections, and reviews with trading partners to quickly detect and resolve quality issues.

Explore supply chain collaboration

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Frequently asked questions

: Supply chain planning is the process of managing and organising the various activities involved in sourcing, producing, and delivering goods and services to customers. It involves the strategic coordination of resources, information, and processes across the entire supply chain, from suppliers to manufacturers, distributors, retailers, and end consumers. The main goal of supply chain planning is to ensure that products and services are available at the right time, place, and quantity while minimising costs, optimising inventory levels, and improving overall efficiency.
: Supply chain planning systems are software solutions or tools that organisations use to manage, coordinate, and optimise various aspects of their supply chain operations. These systems help companies to plan, execute, and monitor the flow of goods, information, and resources from the point of origin to the point of consumption in a cost-effective and efficient manner. By implementing a supply chain planning system, companies can gain better visibility and control over their supply chain operations, identify potential risks and bottlenecks, reduce costs, improve customer service, and enhance overall business performance.
: Demand planning: Forecasting customer demand to determine the necessary production levels, inventory requirements, and distribution strategies.
Supply planning: Identifying and securing the resources needed to produce goods and services, including raw materials, labour, equipment, and transportation.
Production planning: Scheduling and coordinating manufacturing processes, including capacity planning, resource allocation, and production sequencing.
Inventory planning: Managing the levels of raw materials, work-in-process, and finished goods to meet customer demand while minimising costs associated with excess inventory or stockouts.
Distribution planning: Optimising the transportation, warehousing, and distribution of goods from manufacturers to customers, including route planning, carrier selection, and shipment consolidation.
Sales and operations planning (S&OP): Aligning the goals and objectives of various functional areas, such as sales, marketing, production, and finance, to create a unified and integrated plan for the entire supply chain.
: Effective supply chain planning requires a comprehensive understanding of the internal and external factors that can influence the supply chain, such as market trends, customer preferences, supplier capabilities, and regulatory requirements. It also involves the use of advanced planning software, analytical techniques, AI for process automation and optimisation, and collaboration among supply chain partners to optimise decision-making and adapt to changing conditions.