A supply chain management (SCM) software system consists of many modules or applications. Those applications either support supply chain
planning or supply chain execution. Supply chain planning includes demand forecasting, inventory simulation, manufacturing planning and
transportation scheduling. Supply chain execution includes procurement, manufacturing and distribution. While supply chain planning is
part of enterprise strategic planning, supply chain execution is part of managerial and operational control.
Demand Forecasting
A critical success factor to supply chain management is accurate demand forecasting. Supply chain software systems utilize sophisticated
mathematical models for predicating future demand from historical data. The accuracy of the demand forecasting is largely dependent on
how abnormal data is treated in the demand forecasting. Demand forecasting is an ongoing process. Supply chain management software systems
can generate alerts at the frequencies of your preference on a weekly, or monthly basis.
Inventory Simulation
Inventory simulation estimates appropriate stock levels from historical inventory data. Items used for special events, roadshows,
or kitting are common causes that result count discrepancies, When a discrepancy occurs or the actual quantity physically counted doesn't
match the stock level in the computer system, inventory specialists need to reconcile the discrepancy in terms of cycle counting. A cycle
counting program can improve your business processes, and accuracy of estimating inventory levels.
Manufacturing Planning
Manufacturing planning details the coordination of all manufacturing activities. It tries to achieve the optimal use of raw materials,
manufacturing equipment and skilled labors based on orders placed by individual customers.
Transportation Scheduling
Transportation scheduling optimizes the use of resources in shipping raw materials from suppliers to manufacturers and in delivering of
finished goods from manufacturers to distributors and customers. Transportation planning module of SCM utilizes linear and/or non-liner
programming from Operations Research to ensure the delivery of materials and goods at right time, to right place at a minimal cost.
Related Topics
Supply Chain Management Overview - Participants and Processes
Supply Chain Management Definition - A Systems Perspective
Supply Chain News Portal
Supply Chain Execution
Supply Chain Collaboration
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