Advanced planning

Balancing supply and demand in volatile markets

Companies have been using software to plan and schedule production based on available materials, labor and plant capacity for quite a while now. In the past, calculations usually drew on ‘static’ data from inventories, bills of material and databases, without taking into account today’s increasingly variable demand. The result: alternating between too much inventory and not enough, disrupted schedules, dissatisfied customers and, as a result, lower revenue.

That’s all changing now. Today’s planning tools use advanced algorithms and logic to simulate capacity scheduling, sourcing, resource planning, forecasting and demand management, and to optimize it for multiple criteria (e.g. profitability, service, inventory level). Moreover, they have a holistic, end-to-end view of the supply chain – from procurement all the way to sales.

Increasingly, advanced planning is done on three levels: 

• Operational: the basics, plan as efficiently as possible i.e. over a time span of 1 day to 1 week;
• Tactical: make the best planning decisions, considering what will happen within a couple of weeks to a few months.
• Strategic: keep the bigger, long-term company strategy in mind (several months or years).