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A supply plan is a company’s forecast of how to meet demand based upon manufacturing constraints and inventory targets.
The supply review determines the firm’s ability to meet the consensus-based demand, measures past performance and projects future performance. There is also comparative analysis of alternative supply plan scenarios. The supply review meeting typically involves reviewing:
- The company’s current performance, including inventories, backlog, assumptions, risks and opportunities.
- Changes in production plans.
- Changes in inventory plans and backlog.
- Changes in capacity plans.
- Any supplier issues.
- New process and equipment.
The supply review determines a company’s ability to meet the consensus-based demand, measures past performance and projects future performance, and serves as the main input into the senior management meeting. The supply review uses the following supply plan data to create a supply plan/rough-cut capacity plan:
- Constrained forecast by organization and item.
- Production plan by organization and item.
- Inventory plan by organization and item
- Resource (or rough-cut) capacity plan by organization and resource.
- Supplier capacity by supplier organization and critical component.
The stakeholders review consolidated demand, supply and inventory plans worksheet as well as production and inventory levels by product category or family.
At this point planners revise the production and capacity outside of the fixed time fence to meet inventory targets. If the strategic planner required a capacity increase within the fixed time fence, they would seek approval by escalating.
