The Role Of Supply Chain Planning In Supply Chain Management

While supply chain management (SCM) is often seen as one specific component of a business, there are actually two discrete and different components to consider. The first is supply chain planning (SCP) and the second is supply chain execution or SCE.

Think of supply chain planning as the precursor step, although it can occur at any time with an existing supply chain. It is the method and the software options that are used to model how a supply chain could be formed, to provide analysis of that supply chain as well as how to track, evaluate and manage the supply chain from end to end.

Make the Supply Chain Work for You

Many businesses approach their supply chain as a structure that is out of their control. They see the costs and want to make cuts, but without transparency in the system, it is impossible to know where reductions or alternative options are available.

Through the use of supply chain planning software, companies can visualize the entire supply chain including all the logistics, suppliers, partners and possible ways to collaborate with others to help to bring down costs, boost efficiency and make effective changes.

By using software to create models and explore options, the unwieldiness of the supply chain is eliminated. The models also allow a business to explore options and evaluate the cost-effectiveness of a proposed supply chain or change to an existing one.

Making the Connections

Depending on your business, the software for SCP has to be able to include the connections or the elements in your supply chain. For most companies, these will include marketing, sales, materials, engineering, warehouses, material suppliers and finally the end consumers and customer support.

When the SCP has the ability to analyze how each of these will be impacted by a change, it will become a key part of the decision making both now as well as in the future.

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