The 7 Core Elements of Supply Chain Planning in 2024

Karishma Shikalgar on January 16, 2024

Elements of Supply Chain Planning
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The Seven Core Elements of Supply Chain Planning in 2024

Jan 16, 2024 | 5 min read

Accurately streamlined supply chain planning is more critical than ever in today’s fast-paced business ecosystems. It plays a vital role in facilitating the smooth-running production and delivery of products, while ensuring that demand and supply are in equilibrium.  In this blog post, we will explore deep into the complex world of supply chain management. We will also discuss core elements that supply chain planners must consider when helping organizations compete in the global market.  And finally, we will show you how Avercast can enable you to mitigate supply chain discrepancies with our innovative solutions. 

What is supply chain planning? 

Supply chain forecasting is a forward-looking method aiming to optimize the adequacy of supply chain operations. The planning includes anticipating customer needs and then planning materials, production, components, marketing, distribution, and sales accordingly.  The overall focus of this method is to ensure that sales and profit-making opportunities are thoroughly utilized at the lowest possible cost and on time. This method is critical for businesses to effectively organize operations, reduce costs, enhance efficiency, and provide a delighted customer experience. 

Seven core elements of the supply chain planning system 

Every business needs supply chain planning software at every phase of its life cycle. And to accurately execute various business operations, you need effective planning. Below are some of the key elements of planning in supply chain management. 

  • Demand planning 

Precisely forecasting demand for your goods and services enhances your chances of producing and stocking just the right amount of inventory to meet your customers’ needs on time without maintaining excess inventory. Savvy supply chain planners scrutinize historical customer behavior, projected versus actual sales, market conditions, and many other factors. They utilize predictive analytics to effectively assess the demand for any particular product, like how much, when, and where it should reach according to the need. Then, planners estimate the internal demand for each link in their supply chain. 

  • Supply management 

Overall supply management includes procurement and source management of raw materials, components, and other required processing materials that go into manufacturing your products. Fusing your business with efficient supply chain planning software is the better way to control your supply management tasks. 

  • Production management  

Production management addresses your organization’s production lines in terms of required staff, machinery, and efficiency. These elements enable your business to prepare everything before manufacturing starts. Decision-makers need vital data on major components before evaluating their business according to the market. 

  • Inventory management 

How an organization orders, handles, and stores its stock can majorly impact operational efficiency, costs, and customer satisfaction. Businesses aim to manage inventory levels with their supply chain partners to keep enough items on hand while ensuring they maintain overall customer service.  Inventory management can also deliver other financial benefits, such as the capacity to capitalize on volume pricing from suppliers and accurately include the costs of inventory in assets listed in the company tax filings and balance sheet. More robust supply chain planning systems can identify low- and high-performing products and trigger reorders when stock is reduced. 

  • Pricing strategy 

Setting an optimal price for your products is half art and half science. An effective pricing strategy is vital to manage the balance between supply and demand. For instance, price slashes can stimulate sales during periods of low demand, enabling you to cover the fixed costs of your workforce and production lines. 

  • Scenario management 

This process is critical to every supply chain business. It involves locating all the unwanted possibilities, such as supply chain bottlenecks, breakages, and unforeseen delays at any point of a product’s journey. Scenario management facilitates the building of successful contingency plans, such as buffers, workarounds, and backups. 

  • Integrated business planning 

This approach connects your supply chain planning system with the rest of your business, from operations to sales via finance. Because integrated business planning collects information from across the whole enterprise, breaking down the departmental silos, it also can enable organizations to better perform predictive analysis to scale the business and manage risks. 

Effectively visualize your supply chain with Avercast 

Accurate planning and forecasting don’t have to be hard. Avercast, a division of TransImpact, provides highly efficient supply chain planning solutions to unlock complete visibility into your business operations. With 280+ algorithms, our pragmatic dashboard can deliver precise insights to improve decision-making and overall processing. To understand more about our solutions, schedule a demo or talk to one of our experts. 
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