Supply Chain Planning Basics: A Planning Paradigm

“If you can’t describe what you are doing as a process, you don’t know what you’re doing.”

(W. Edwards Deming)


In our first blog we looked at a general theory of supply chain planning, scheduling and execution in the context of daily life, in a way we can all relate to. Now let’s look at the planning process in more detail.

We plan so we can see how to accomplish a given objective, so we know what needs to be done and when, so we don’t overlook anything important along the way. The more complex our objective the more essential our plan, and the better we plan, the more likely we are to succeed.

The foundation of planning, especially in complex supply chain scenarios, lies in our ability to break down an objective into a series of steps we can follow to achieve it. Insufficient detail may confuse us, where we don’t know what’s next or we forget something; too much detail wastes time on things that should be obvious and that may change by the time we get there. Knowing how much detail to include in the plan is as much art as it is science; it’s dependent on context and often requires prior experience trying to achieve similar objectives.

To create a good plan, like a manufacturing plan, we need to identify the key steps needed to reach our goal, and we need to understand and respect any interdependencies between these steps. We need to estimate, aggregate and summarize key details supporting these steps so we can reasonably and quickly ensure plan feasibility. When there are multiple ways to produce goods for example, we need the ability to quickly evaluate our options and pick the best ones, and in dynamic or uncertain environments we need to plan for contingencies. We also need a way to measure how well our plan is achieving our objectives, a way to monitor how well we’re achieving our objectives as we execute, and an efficient way to re-plan when we’re getting off track.

Obviously, given the supply chain complexities we often face, such as forecast error and process instability in manufacturing planning, the above process is much easier said than done. Keeping our approach as simple as possible while achieving our objective is important, but taking time to automate certain kinds of repetitive tasks like data collection, reporting and optimization can free us up to do the things we do best — analyzing situations, segmenting our audience, making strategic decisions and managing our business.

In our next blog we’ll see how scheduling fits with planning and execution. For additional information, read the first blog in this series.

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