Aggregate Planning In Supply Chain Management

7/26/19 10:30 AM

If your production facility is lacking in terms of production efficiency and effective planning, then utilizing aggregate planning for your overall supply chain may be a viable option. Aggregate Planning in supply chain management within a manufacturing facility is extremely important when attempting to boost operational efficiency within the operation. When you attempt to look months ahead to determine your supply chain needs, you can use the techniques of aggregate planning.

Aggregate Planning in Supply Chain Management

This approach enables you to have a comprehensive view of the supplies you will need in order to meet demand for your products. Through ordering for the entire planning period, you can quality for bulk discounts and ultimately avoid shortages. Before implementing aggregate planning into your supply chain, it is important to understand some of the components within aggregate planning and supply chain.  

Aggregate Planning in Supply Chain Management 

Aggregate planning in supply chain management include the following: 

  • Solid Demand Forecast - It is important to anticipate demand for your product before you can plan your supply ordering. Using historical data as well as industry trends and forecast, you are able to accurately predict demand for your products for upcoming months. Your forecast will tell you how much you need to product in order to meet demand in order for you to know that quantity of supplies you will need to maintain productivity. 
  • Production Capacity - The ability to produce depends on machinery, work staff and efficiency. You are able to evaluate your production department to accurately determine how many products you can reasonably produce during the period that you are planning for. This could end up being less than demand. Utilizing your production ability to set goals for producing products that are realistic. Allow for personnel shortages and machinery maintenance. 
  • Limitations on Capital - No matter what quantity of supplies you would like to order, you need to take your cash into account. You may be limited by what you can afford. If you plan to borrow to buy supplies, include the interest costs in your estimates of the profits you will make from the products you manufacture. In short, make sure you have the capital to purchase the supplies you need. 

Aggregate planning is crucial within a manufacturing operation that is seeking to improve production planning within the production process. Aggregate planning can be implemented with an Advanced Planning and Scheduling (APS) system and improve operational efficiency within your manufacturing operation. Advanced Planning and Scheduling (APS) software allows you to have a visual representation of your production plan and manipulate areas that are in need of efficiency enhancement. Ultimately this leads to profit increase, waste reduction, and overall enhancement of the entire operation as a whole. Aggregate planning and Advanced Planning and Scheduling (APS) Software is being implemented into manufacturing operations around the globe and operations are experiencing the benefits. 

Advanced Planning and Scheduling Software 

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

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Topics: aggregate planning

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