Over the last few years, the demand placed on the distribution and logistics departments of manufacturing and marketing organizations has been continuously intensifying due to pressures from increased competition, introduction of new manufacturing methods, and increased expectations from partners and consumers in terms of low price and high service levels. Corporations are looking to increase their customer service levels, while reducing inventory, working capital requirements and distribution costs.
While distribution and logistics planning is gaining importance within corporations, distribution planners and supply chain managers are still struggling to come to terms with the increased expectations. The bulk of their time is still spent on short-term operational problems related to meeting immediate demand requirements, without much consideration for longer-term costs or strategic issues.
Most of the issues faced by distribution planners
and supply-chain planners can be linked to:
The highly data-intensive, deterministic and repetitive nature of distribution planning lends itself well to the use of Decision Support Systems. These systems can leverage the latest advances in information technology and optimization techniques to manage inventories and plan dispatches to meet demand at minimum cost.
Distribution Planning systems can address the following operational issues faced by a supply chain manager
Distribution Planning solutions should reduce process variability, improve information visibility and co-ordination between departments, and optimize planning, while responding to demand and supply side variabilities in real time.
In addition to the above, Distribution Planning solutions can also aid in strategic decision-making in areas like network planning, warehouse capacity planning, vehicle capacity planning, and inventory and service level management. These systems facilitate long-term planning, and creation and analysis of various demand, supply and supply chain structure scenarios.
Distribution Planning should be led by Demand Planning and be a driver for Production Planning to ensure seamless supply chain integration.
Requirements of a good distribution planning
2000-10 DecisionCraft Inc.