Supply chain planning turns expected demand into coordinated decisions about supply, inventory, capacity, purchasing, production and distribution. Good planning is not one forecast or one spreadsheet; it is a recurring decision process across strategic, tactical and operational horizons.
The Core Planning Questions
- What demand do we expect—and how uncertain is it?
- What inventory do we have and where?
- What supply and capacity are available?
- Which constraints will prevent the plan?
- What service level and working-capital trade-offs are acceptable?
- What actions must be executed now?
Planning Horizons
| Horizon | Typical Decisions |
|---|---|
| Strategic | Network, capacity, sourcing strategy, major investments |
| Tactical / S&OP | Demand-supply balance, inventory, capacity, financial alignment |
| Operational / S&OE | Near-term exceptions, allocation, expediting, schedule changes |
A Practical Monthly S&OP Cycle
- Data and performance review
- Demand review
- Supply/capacity review
- Scenario and gap analysis
- Pre-S&OP reconciliation
- Executive decisions
- Translate decisions into execution plans
Planning Is Constraint Management
A plan that ignores supplier capacity, lead time, labour, transport or storage constraints is not executable. Planners should therefore identify the limiting resource and create alternatives such as reallocation, alternate sources, overtime, substitute items or revised customer priorities.
KPIs
- Forecast accuracy/bias
- Service level / OTIF / fill rate
- Inventory days and stockout rate
- Capacity utilization
- Schedule adherence
- Expedite cost
- Plan attainment
Related SCMANA guides: MRP vs ERP, Cycle Stock vs Safety Stock and Scenario Planning.
