Exploring the Steps of Supply Chain Planning

Forecasting is one aspect of supply chain planning. Requirements from the past sales order quantities provide the basis to forecast future demands. Start the video to see the integration of these and other processes into the demand planning cycle.

In the Bike Company example, past sales order quantities are used to predict the future demand of 200 bikes. Market intelligence and events like trade fairs also contribute to the forecast. The demand plan is then derived into planned independent requirements, which guide procurement and production planning. These requirements can be consumed by current sales orders. By integrating forecasting into the demand planning cycle, the Bike Company can efficiently meet customer needs.

The following methods are available for including customer requirements into planning:

• Make-to-Order Production: Various make-to-order planning strategies support producing specifically for a sales order item, ensuring the production aligns with customer demands.
• Make-to-Stock Production: Make-to-stock production facilitates combining planned independent requirements and sales orders into a consolidated total requirement.
• Dynamic Consumption: In several planning strategies, it is possible to dynamically consume planned independent requirements with sales orders.

Scheduling of procurement for in-house products is derived from work centers and routing. To ensure smooth operations, it is essential to calculate the duration of each operation accurately. This is done using formulas that consider standard values and planned quantities.

The assemblies, given in the Bills of Materials (BOMs) of the finished product, must be available when the assembly of the finished product is started. To achieve this, it is necessary to initiate the procurement of these assemblies well in advance. For example, the Bike Company needs spokes and rims to assemble the tires.

In a first approach, the order dates of the assemblies are determined in backward scheduling using the in-house production time or the planned delivery time, taking the dependent requirements date as the desired availability date.

In simpler terms, backward scheduling works by starting from the desired availability date of the finished product and working backwards to determine when the assemblies must be procured. By doing so, the production process can be organized efficiently, ensuring that the required assemblies are available when needed.