How are demand management and production planning linked to logistics planning?
A customer’s demand for a good is very important in the supplier’s plans for meeting the needs of his client. The nature and urgency of the client’s needs are evaluated and this helps the supplier in coming up with plans to meet the requirements of the customer. Proper management of demand dictates the success of the supplier and thus demand needs to be carefully analyzed to come up with proper logistics plans. The demand dictates the supply chain option to be adopted to meet the requirements of clients. The supplier needs to put strategies in place to ensure smooth supply of services (Bowersox, Closs & Cooper, 2009). The time for reacting to the needs of the clients need to be evaluated. Also time reliability in the course of the delivery process need be looked at and emergency plans put in place to counter any delays that may arise in the course of the delivery process.
The supply route adopted will lead to a wide range of logistics plans being put in place to meet the demands of the customers. The logistics plans may include need for a warehouse, fast delivery vans, bulk good haulers. In logistics planning the urgency and type of service needed will dictate the manpower required to accomplish the task at hand. Also the demand will help the supplier in making logistic plans for ordering of the goods being demanded by the customers. Good logistics plans will ensure efficient ordering of goods whereby cases of shortage of goods or supply in excess of the required amount will not occur (Burbidge, 2008). Logistic plans need to be well thought out and analyzed in accordance with the selected supply chain so as to ensure efficient completion of the tasks. Management of the demand and the plans put in place usually determine the efficiency and effectiveness of the supply system. The two go in handy and a poor management of demand or poor logistics plan will undermine the efficiency of the supply system.
Proper production plans need to be put in place to ensure a smooth running of the production process. The space available for storage of raw materials need to be looked at and compared to the rate of production. This helps in coming up with logistic plans to maximize on the storage space of raw materials. The choice of the production method can also help in maximizing the storage space for raw materials. Logistics are very essential in the production process more so on the ordering and delivery of raw materials since this ensures timely and efficient production process (Argoneto, et al. 2008). Proper planning of the production process also ensures that the storage space for finished goods is available. Proper production planning will ensure that the production of goods is dictated by the demand in the market. In the production process, logistic planning helps in ensuring that the production meets the demand (Bowersox, Closs & Cooper, 2009). It helps in avoiding under production or over production and ensures satisfaction of the needs of the consumers. The logistic planning helps in ensuring that the firm is well equipped in terms of workers, storage space for both finished goods as well as raw materials. The technology employed in the production process and the available workforce, as well as the size of the warehouse usually help in determining the logistic plans to be adopted in the production process. Demand management combine with production planning and proper logistics planning in order to ensure efficient and proper running of the supply system (Argoneto, 2008). Those three if well utilized do also help in building the image and success of the firms involved in the process.
In conclusion the success or failure of a firm depends on how well analyzed and thought out the three processes are carried out. Demand is the principal factor in the process since it dictates the approach to be employed in the production planning and the logistics planning. Poor management of demand will lead to poor production planning and consequently the wrong logistics plans are implemented.
Bowersox,D., Closs,D. & Cooper,M.B. (2009). Supply Chain Logistics Management.3rd Ed. New York: McGraw-Hill/Irwin.
Argoneto,P. et al.(2008). Production Planning in Production Networks: Models for medium and short term planning. New York: Springer.
Burbidge, J.L.,(2008) Production: The Heinemann accountancy and administration series. New York: University of Winconsin.