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Dictionary / Supply planning

Supply planning

Last updated August 14, 2023

What is supply planning?

Supply planning is the process of determining how much of a product or raw material needs to be produced, purchased, or stored in order to meet demand. The goal is to guarantee the seamless provision of precisely the right products to customers, at the appropriate time, in optimal quantities, and with cost-efficient methods.

Why is supply planning important?

Supply planning ensures that a company can meet customer demand while minimizing costs, optimizing resources, and managing potential risks. It helps maintain a balance between supply and demand in a dynamic market environment.

What is the difference between supply planning and demand planning?

focuses on forecasting and predicting customer demand, while supply planning involves determining how much to produce or procure to meet that demand while considering various factors like inventory levels, capacity, and constraints.