If you are just starting out, supply chain planning can seem like an enormous task. Sometimes, more mature businesses also find themselves in a spot where what they’ve been doing is no longer working. Either way, managing supply chains can be broken down into three essential steps.
Strategic Level Questions
Using a strategy for supply chain planning means answering some of the big questions. It goes beyond simple questions like “Where are we going?” or “How are we going to get there?” Strategic questions include:
- Where will we place our facilities and what will each one do?
- Will functions be done in-house or will they be outsourced?
- Who will we partner with? And why?
- What are our long-term goals for customers?
Tactical Level Questions
After you identify the hows and whats at a strategic level, you know more about what you are doing. The tactical level helps you figure out how you will get there. Some of the decisions to be made at this level include:
- Detailing contracts with partners along the supply line
- What are your capacity needs and production schedules to meet them
- Develop guidelines for safety, quality, compliance and sustainability
- Establish goals and metrics for measuring them
- Choosing what technology you’ll invest in
Operational Level Plans
The other levels of supply chain planning help determine strategies and tactics. This level focuses on how to perform them. This is the everyday, nitty-gritty work. A small business might be able to jump to this level, but larger, complex models can become a huge mess if the strategic and tactical levels are not done first. Functions of the operational level include:
- Daily, weekly and monthly forecasting
- Scheduling labor and processes
- Reporting processes
- Compliance with vendor contracts
- Managing general functions like inventory, shipping, receiving and returns