From the course: Implementing Supply Chain Management

Plan the supply chain

From the course: Implementing Supply Chain Management

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Plan the supply chain

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- There is an old military saying, "Plans are useless, but planning is everything." And that's true for supply chains too. Implementing supply chain management starts with understanding how we want our supply chain to work. That's why plan is the first supply chain process group in the SCOR model. Let's look at the main elements to consider when planning your supply chain and some of the systems you can include in the process. There are four main elements at the heart of any supply chain. First, your customers. Naturally, this includes the people who buy your products or services directly, but it can also include your customers' customers and anyone else downstream who will be relying on you to deliver a product or service. The next element is your products or services. These are things that you make and deliver that have value to your customers. Third, your resources, including your suppliers, your facilities, and your staff. Basically, anything you need in order to make and deliver products. And the fourth element is your constraints. What are the deadlines you need to meet, and what capacity limitations do you have? To manage these elements of a supply chain effectively, we need systems. And when we talk about systems, we can actually mean two different but related things. First, we use the word system to describe a language and a set of rules that provide consistency across a process. The Toyota Production System is probably the most famous example. But we often use a system of language and rules to create a specialized computer program, and we call that program a system as well. Both kinds of systems, the rules and the software, are useful when you're planning a supply chain. You can implement a planning system for your products by using a product roadmap. To plan your resources, you can take advantage of tools like manufacturing resource planning and enterprise resource planning that plan your production schedules. Making a product is important, but you also need to plan your delivery systems. That's how customers will order and receive products from you. And you need to plan a return system to govern the reverse supply chain. Returns could be products that were damaged or defective, so you want a closed-loop system that provides feedback to the rest of your supply chain and can help you prevent those problems in the future. Effective supply chain management starts with the processes you use for planning all of your other processes. And that's why plan is the first process group in the SCOR model.

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