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Supply Vs Demand Planning

The document outlines the differences between supply planning and demand planning, highlighting their focus, purpose, key activities, data inputs, objectives, tools, challenges, and outputs. Supply planning aims to ensure resource availability and optimize costs, while demand planning focuses on accurately forecasting customer demand. Both processes are interdependent, with effective collaboration enhancing supply chain efficiency and customer satisfaction.

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Jitu Chaudhary
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2 views10 pages

Supply Vs Demand Planning

The document outlines the differences between supply planning and demand planning, highlighting their focus, purpose, key activities, data inputs, objectives, tools, challenges, and outputs. Supply planning aims to ensure resource availability and optimize costs, while demand planning focuses on accurately forecasting customer demand. Both processes are interdependent, with effective collaboration enhancing supply chain efficiency and customer satisfaction.

Uploaded by

Jitu Chaudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Supply Planning

VS
Demand Planning
Ismail Mohamed

Focus and Purpose


Supply Planning:
Focuses on ensuring the right resources are
available to meet anticipated demand.
Purpose: To optimize production, procurement,
and inventory levels while minimizing costs.

Demand Planning:
Focuses on forecasting future customer
demand for products or services.
Purpose: To predict demand patterns
accurately and ensure supply chain readiness.

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Ismail Mohamed

Key Activities
Supply Planning:
Capacity planning.
Inventory optimization.
Procurement planning (raw materials,
components).
Production scheduling and logistics
coordination.

Demand Planning:
Analyzing historical sales data.
Forecasting future demand using statistical
models or AI.
Collaborating with sales and marketing for
promotions and new product launches.

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Ismail Mohamed

Data and Inputs


Supply Planning:
Input: Demand forecasts, inventory levels,
production capacity, supplier lead times, and
resource availability.
Example: Planning how much raw material to
order and when based on anticipated
production needs.

Demand Planning:
Input: Historical sales data, market trends,
seasonality, customer feedback, and marketing
activities.
Example: Forecasting sales for the upcoming
holiday season based on previous years'
trends.

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Ismail Mohamed

Objectives
Supply Planning:
Avoid stockouts and overstock situations.
Optimize production schedules and minimize
costs.
Maintain a balance between supply and
demand.

Demand Planning:
Create accurate demand forecasts to reduce
uncertainty.
Support strategic decision-making in
production, marketing, and distribution.
Align supply chain activities with customer
demand.

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Ismail Mohamed

Tools and Techniques

Supply Planning:
Materials Requirements Planning (MRP).
Advanced Planning and Scheduling (APS)
systems.
Inventory management software.

Demand Planning:
Forecasting tools and software (e.g., statistical
models, AI-based analytics).
Collaboration tools for Sales and Operations
Planning (S&OP).

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Ismail Mohamed

Challenges

Supply Planning:
Supplier reliability and lead time variability.
Managing capacity constraints and unexpected
disruptions.

Demand Planning:
Demand unpredictability due to market
changes or external factors.
Balancing forecast accuracy with operational
flexibility.

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Ismail Mohamed

Output
Supply Planning:
A detailed plan for production, procurement,
and inventory.
Example: "Produce 10,000 units of Product X in
the next month."

Demand Planning:
A forecast of expected customer demand.
Example: "Anticipate selling 8,000 units of
Product X in the next month."

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Ismail Mohamed

Interdependence
Demand planning informs supply planning
by providing forecasts, while supply
planning ensures the resources and
infrastructure are in place to meet the
forecasted demand.
An effective collaboration between the two
minimizes inefficiencies and enhances
customer satisfaction.

8
FOLLOW
FOR MORE
GREAT TIPS!

Ismail Mohamed

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