Supply Planning

Supply Planning

Supply planning is the process of determining how to best meet forecasted demand by aligning procurement, production, and distribution resources. While demand planning predicts what customers will want, supply planning ensures the supply chain can deliver it efficiently and cost-effectively.

Think of it as the “execution side” of planning: turning demand signals into concrete actions across sourcing, manufacturing, inventory, and logistics.

SCT Advisory supports these critical elements of supply planning:

• Supply Forecasting – Translating demand forecasts into supply requirements (materials, capacity, labor, transport).
• Inventory Planning & Replenishment – Deciding where and how much stock to hold across warehouses, plants, and distribution centers.
• Production Planning & Scheduling – Allocating manufacturing capacity and sequencing production runs to maximize efficiency.
• Procurement Planning – Ensuring suppliers can deliver raw materials or components on time and in the right quantities.
• Distribution Planning – Planning how finished goods move through the network to customers (transport modes, routes, hubs).
• Constraint Management – Factoring in limits like supplier lead times, production bottlenecks, or transportation capacity.

With SCT Advisory’s guidance, supply planning projects often deliver significant, measurable ROI, because they directly impact costs, service levels, and working capital. By improving how supply chains allocate production, inventory, and logistics, companies often see both hard savings (cost reduction) and soft benefits (better agility, resilience, and customer loyalty).

SCT observes the following ROI opportunities from supply planning initiatives:

• Inventory Reduction (10–25%)
  • Smarter supply planning reduces excess stock and balances inventory across plants, DCs, and retailers.
  • Frees up millions in working capital.  Example: A global industrial manufacturer reduced network-wide inventory by 18% while maintaining service levels.
• Production Efficiency Gains (5–15%)
  • Optimized production scheduling reduces downtime, changeovers, and overtime.
  • Better alignment with demand lowers costs per unit.
  • Example: A food & beverage company improved factory utilization and cut production costs by 12%.
• Logistics & Distribution Cost Reduction (5–20%)
  • Fewer emergency shipments, expedited freight, or unnecessary transfers.
  • More efficient routing and mode selection.  Example: A consumer durables firm cut distribution costs by 15% through better supply planning.
• Lower Obsolescence & Waste (10–20%)
  • Especially valuable in industries with short product lifecycles (electronics, fashion, CPG).
  • Smarter supply allocations prevent overproduction of low-demand SKUs.
• Improved Service Levels (2–10% increase in OTIF)
  • On-time, in-full (OTIF) delivery improves because supply is positioned closer to demand.
  • Direct impact on customer satisfaction and retailer compliance penalties.
• Better Financial Alignment
  • Supply plans tied to S&OP and IBP (Integrated Business Planning) create tighter links between operations and P&L.
  • Reduces forecast-to-plan variance, leading to more predictable financial performance.
• Productivity Gains (20–40% faster planning cycles)
  • Modern supply planning systems automate constraint-based planning and scenario modeling.
  • Planners spend less time firefighting and more on strategic optimization.

Overall ROI:

Most companies see 2–5x ROI within 18–36 months of a supply planning investment. In industries with high inventory costs or complex networks (like CPG, automotive, or industrial manufacturing), ROI can be even higher.