TP 1: Text Page 152, Question 2
How are demand management and production planning linked to logistics planning?
Chpt 5 pg 105-114
Chpt 6 pg 134-136
Supply chain managers are constantly looking for smarter business practices to operate a more productive and efficient supply chain. A key element of the supply chain is supply chain planning which includes identifying requirements, managing production and coordinating movement of forecasted assets. These elements are familiar in most supply chain planning operations and are vital to reduce costs. In order to be effective, these applications must be completed in step by step order beginning with the demand planning phase. In demand planning, requirements are identified. As XXXX explains, “Each projected quantity might include some portion of future orders placed in anticipation of customer demand along with some portion of forecasted demand based on history” (p. 134). A current example would be as the NFL season draws closer to the playoff period of the season and Christmas approaches, a perfect gift for football fans is a player jersey. Demand for player jerseys will go up during the Christmas season. Knowing this, supply chain manager can use forecasting techniques to determine the amount of jerseys to produce. Forecasting is a very important process, forecasting too many of an item can lead to extensive cost associated with excess inventories and unsold goods. Producing too little of an item can lead to lost sales which relates to reduced profits.
Once the requirements for a good have been identified production must be planned which is accomplished in the production planning step. In production planning requirement needed to produce the goods are identified and coordinated. As XXXX explains, “Production planning use the statement of requirements obtained from demand management in conjunction with manufacturing resources and constraints to develop a workable manufacturing plan” (p.135). A key to production...