OpenReference

Plan is the macro process representing the processes associated with establishing an estimation of volumes and/or revenue for current and future periods (the plan) and determining the actions required to achieve 'the plan'. Planning is an iterative process, balancing supply and demand in order to position materials, products and/or capacity to achieve 'the plan'.

Balancing is a process of matching demand to supply. The output of balancing are three lists:

• Revenue or Volume estimation (supply and demand match)
• Demand shortage (no demand is found to match supply projection)
• Supply shortage (no supply is found to match demand projection)

The demand shortage and supply shortage lists typically drive initiatives to find additional volume/revenue opportunities (chasing supply or demand), allowing for the volume/revenue estimate to improve in subsequent iterations of the plan.

The scope and importance of Plan processes depends on the supply chain configuration. Make-to-Stock processes depend heavily on Plan processes; getting the mix of item numbers correct may make or break the ability to achieve the revenue goals. For non-Make-To-Stock processes (Make-to-Order, Engineer-to-Order, Reverse Logistics) getting capacity right is generally more important.

Use Cases

• Sales & Operations Planning
• Material Requirements Planning
• Production Planning, including weekly/monthly production meetings
• Distribution Requirements Planning
• Inventory reduction programs

Notes

Plan processes differ from scheduling processes in that Plan processes generally focus on a longer period (window), less detail (level) and takes place less often (frequency). Scheduling generally involves additional location, time and/or product specific constraints. OpenReference recognizes scheduling as a subset of Execution processes (Source, Make and Deliver for supply chain operations).

Plan processes by themselves do not generate revenue, but a lack of planning generally significantly reduces the likelihood of achieving revenue and/or performance goals. Perfect Order Ratio Order Cycle Time Order Fill Rate Supply Chain Costs Cash Conversion Cycle Fixed Asset Turns Forecast-to-Plan

Hierarchy

ID	Name	Level	x
SCO	Supply Chain Operations	0	SCO
P	Plan	1	P
P1	Plan Supply Chain Operations	2	P1
P2	Plan Source	2	P2
P3	Plan Make	2	P3
P4	Plan Deliver	2	P4

Metric(s)

ID	Name	Level	x
DP1	Perfect Order Ratio	1	DP1
RS1	Order Cycle Time	1	RS1
RS2	Order Fill Rate	1	RS2
CO1	Supply Chain Costs	1	CO1
AE1	Cash Conversion Cycle	1	AE1
AE2	Fixed Asset Turns	1	AE2

Term(s)

ID	Name	Clear	x
DRP	Distribution Requirements Planning		DRP
F2P	Forecast-to-Plan		F2P
MRP	Material Requirements Planning		MRP
S&OP	Sales & Operations Planning		S&OP

Workflow

From Input(s)	Process	Output(s) To
wf_process wf_arrow P Demand Forecast SSO Sales Forecast D Execution Data M Execution Data S Execution Data	P	wf_arrow wf_process Distribution Plan D Production Plan M Sourcing Plan S

Plan Supply Chain Operations 5100000 1 Plan, Estimate, Revenue, Volume, Supply Chain Macro process to describe the activities to develop plans to achieve supply chain volume and revenue goals