Chapter 6

Planning the Supply Chain


check Setting high-level targets for supply and demand

check Focusing on your customers’ needs

check Developing plans for source, make, deliver, and return

Before you can engineer and manage a supply chain, you need to plan what it’s supposed to do. Planning gives you an opportunity to set goals, evaluate options, and make decisions; it also helps ensure that you invest your time and money wisely.

Supply chain planning is not a one-time event; planning is an ongoing and iterative process that ensures your supply chain adapts to changes in your business.

This chapter covers how to plan a supply chain by looking at it as a complete system, which means thinking about it from several angles: what your resources, requirements, customers, and products are; how you’ll make and deliver your products; and how you’ll handle returns of used or defective products.

Balancing Supply and Demand

The fundamental question at the heart of every supply chain plan is “How are we going to balance supply with demand?” There are three main approaches to balancing supply and demand:

  • Make-to-stock
  • Make-to-order
  • Engineer-to-order

When your supply chain plan is based on a make-to-stock ...

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