What is Supply Chain Planning?

When it comes down to it, supply chain planning (SCP) is equal parts art and science. And it’s no wonder: supply chains are like shape-shifting, three-dimensional puzzles. Constantly evolving. Planning for what comes next in an ever-uncertain world is no small task. The good news is that you needn’t be a fortune teller to optimize for a future you can’t predict. 

Enter supply chain planning. At its best, SCP involves aligning and synchronizing the assets of one or many businesses with fluctuating market demands across an end-to-end supply chain. 

Manufacturing and delivering a product takes time, and the market waits for no one. The moment an item hits the shelves, demand for it may have drastically shifted. SCP is a tool designed to navigate these high stakes unknowns. 

Complicating matters further, the concept of a supply “chain” is nothing more than illusion. Taking the bird’s eye view, a company’s product portfolio consists of supply networks rather than chains. When not one individual within the organization has the pulse on each of these supply networks, there’s room for error.  

To make sense of supply chain networks, we find it helpful to pull out a magnifying glass and examine the three dimensions that comprise them. Once we’ve landmarked these three perspectives, SCP allows us to link them together and run simulations to forecast the future with a little help from the Internet of Things (IoT). 

Product Dimension

Product managers possess a deep well of knowledge. With a laser focus on their product, they have a handle on each step of the process, from sourcing raw materials to distributing the item to customers. 

Unfortunately, with both feet squarely in the product dimension, the product manager has a few blind spots. Without an accurate read on other nodes of the supply chain, this expert is left fumbling in the dark. 

Consider a manufacturing plant with limited capacity. The product manager is caught by surprise when a new product in high demand arrives at the plant she’s been relying on, resulting in scarce resources for the processing of her own product. Left unchecked, such blind spots can result in serious damage. 

When supply chain planning is in place, managers are always envisioning what’s happening beyond their corner of the network. While the product perspective is critical, it’s but one component of the system. If we zoom the lens in too close on events unfolding in this dimension, there’s risk we’ll be caught unprepared when other dimensions zigzag off their expected course. 

Warehouse & Plant Dimension

Next, put yourself in the plant or warehouse manager’s shoes. From where they stand, the view of the product portfolio in their domain is clear. 

Who supplies the materials and where must the finished goods be shipped? The plant manager can answer these questions. But ask them to take an end-to-end perspective on these same products, and the cracks begin to show. They haven’t run a stress test on the supply chain, so its vulnerabilities are an enigma. 

Inside the warehouse, these key members of the supply network are sheltered from the realities unfolding further up and down the chain. Such insulation often leads to critical (and costly) mistakes. 

That’s why SCP is so essential. It’s the tool that helps us fill in those “cracks” in the factory floor. The plant manager’s perspective is accounted for and synchronized with the product manager’s, and what’s revealed is a sweeping vista of the entire supply network. We can zoom our lens in and out, but no matter what, we have an appreciation for the big picture.

Time Dimension

Layer this perspective on top of the other two, and you’ve got a recipe for chaos. 

Nothing is static. The market is in constant flux, as new products arrive and old ones are swept off shelves. Even the supply network evolves; new suppliers sign contracts and partnerships are initiated, while previous supply lanes are cut off.

Handling a system of ever-evolving parts demands careful planning and attention to detail. When stakeholders on the product and warehouse teams are only vaguely aware of what’s happening outside of their own dimensions, the crucial element of time only amplifies confusion.

This dimension has the potential to radically destabilize individual pieces of a supply chain, and the result can be a domino effect. Each segment alters those it comes into contact with, and over the course of, say, a few months, the system as a whole is unrecognizable. Staying ahead of these kinds of seismic shifts is the work of supply chain planning.

Enhanced Supply Chain Planning with Digital Twins

So are we simply doomed to cast about aimlessly in these constantly changing tides? 

Certainly not. 

With proper supply chain planning, it’s possible to predict those tides and prepare for them, ensuring smooth sailing next week, next month, even next year. 

Digital twins enhance the capabilities of SCP, channeling data to run models at varying intervals of granularity. The result: optimized resources and increased efficiency across every dimension. 

Whether you want to test drive a series of disruption scenarios to see how your supply chain responds, or refine and optimize a specific process, supply chain planning is your go-to tool.

Ready to make SCP work for you and your organization? It’s time to put theory into practice. Attending a Patrick Rigoni webinar will equip you with the skills and insight necessary to transform your ambition into reality