Which planning system is right for me?

What planning system is suitable for me? | Imperia
Imperia Article
Published: 09/9/2020

Currently, one of the main focuses in supply chain management is the use of demand planning systems, which allow for accurate forecasting. This enables total chain management, from acquiring products from suppliers to selling finished products to customers.

Factors to Consider in Choosing a Demand Planning System

Below are some tips for choosing a planning system based on the organization's objectives and time horizons.

Firstly, it is important to note that there is no universal and perfect demand planning system. Therefore, the person in charge must understand the particular needs of the company and evaluate which mechanisms best suit the operational reality.

Additionally, while there may be a need for a customized solution in some cases, adapting standard software to the specific needs of each organization should be sufficient to achieve the desired results. It is essential that the chosen planning system accurately and rigorously considers demand in order to effectively manage it.

Furthermore, the demand planning system should be integrated into the hierarchical planning process of the company, allowing for effective long-term and short-term scheduling.

Hierarchy in Planning

It is important to start by considering that the organization should be structured hierarchically. However, it is crucial to understand that each of the four decision levels (long-term / medium-long-term / medium / short-term) has different perspectives. Therefore, attempting to plan everything in a single step is not sensible, as it would likely result in inaccuracies and create more problems than benefits.

1. Consistency

Ensuring consistency between levels and parts of the planning system is critical. Local optimizations lose their strength if their translation to other levels of detail is inconsistent, such as demand or capacity estimates.

2. Robustness

Furthermore, it is important to consider the robustness of the plan, meaning its ability to adapt to changes and contingencies that may arise along the way.

In this regard, a robust and quick planning process is preferable to a sophisticated but inflexible one, as plans cannot always be executed exactly as intended. Therefore, either the plan must be well-prepared for contingencies, or it should be easily and agilely adaptable.

3. Anticipation

In addition, anticipation should be taken into account as a key factor in the planning process. Demand planning systems should help anticipate decisions while also providing feedback. The impact of many incidents can be mitigated by anticipating relevant decisions. Therefore, the system should incorporate feedback mechanisms that allow for updates and continuous improvement over time.

Below is a summary of the operations planning process:

Objectives Decisions and Time Horizon Responsibility Tools and Approach

Strategic Operations Planning (Long-Term)

  • Aligning operations system with business strategy.
  • Defining service levels.
  • Ensuring system profitability and competitiveness.
  • Capacity structure (number of plants, location, specialization, etc.).
  • Process and resource typology and technology.
  • Multi-year horizon, quarterly-annual monitoring.
  • General management.
  • Approval by the board.
  • Qualitative trade-off analysis.
  • Long-term profitability analysis.
  • Impact on different stakeholders.

Aggregate Planning (Medium-Long-Term)

  • Ensuring service levels and delivery times.
  • Ensuring resource availability.
  • Sales forecasts.
  • Aggregate load and capacity planning.
  • Resource planning.
  • Annual horizon, monthly monitoring.
  • Sales, operations, finance, and cost accounting management.
  • Involvement of general management in case of conflicts.
  • Flexible decision support tools.

Operations Planning (Medium-Term)

  • Meeting deadlines.
  • Ensuring resource and material availability.
  • Balancing operating costs with service level.
  • Master production planning (MPP).
  • Material requirements planning (MRP).
  • Monthly-quarterly horizon, weekly monitoring.
  • Operations, procurement, and supply chain management.
  • Planning software systems.

Production Sequencing and Control (Short-Term)

  • Meeting deadlines.
  • Minimizing operating costs and inventory.
  • Flow control methods in production (e.g., JIT).
  • Sequencing.
  • Daily monitoring.
  • Operations personnel (e.g., planner).
  • Automated control and monitoring systems.

If you want to learn how our solution can help you plan in the short, medium, and long term, contact us and choose the day and time that works best for you!