5 Steps Of Supply Chain Management Planning

Proper planning and execution make supply chain management cost-effective, efficient, and competitive. It affects the entire business’s productivity and delivery capabilities. With proper data analysis, supply chain management can cover the entire process from receiving orders to production and delivery.

Supply chain management encompasses a broad range of activities. But it all comes down to how good the planning is. There are five steps of planning for effective management.

  1. Production planning
  2. Sourcing
  3. Execution
  4. Delivery
  5. Return handling

Each stage of planning requires deep study and data analysis to make the process efficient and productive. Let’s explore how it’s done.

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Production Planning

Production planning includes the complete framework of all the procedures of the operation. It starts from procuring raw materials to manufacturing and finally distribution. It brings forth all the vendors and supply partners under one system and creates plans of execution. Production planning networks the production facilities, warehouses, logistics, transportation vehicles, etc.


Manufacturing products is incomplete without sourcing materials. Each production house needs to plan the raw material producers, suppliers, and wholesalers. Planning the sourcing means gathering information from all the concerned parties and checking the qualities. It consists of stringent selection and negotiation. Businesses need a network of suppliers as backups too in case the items are unavailable from one source. Sourcing plans have to coordinate between the various vendors and providers.


Execution planning procedures determine how the whole system needs to work as a whole. Each stage needs an individual plan of action. Preparing guidelines on the execution strategies can help the supply chain managers to go by the book strategically. Data can be utilized to optimize production and delivery times. Execution planning can also figure out possible troubles down the line, which can be avoided.


Delivery planning determines that the right products get to the right buyers. Logistics providers play an important role in delivery. The supply chain managers can plan out the type of vehicles for each product category, route maps, invoicing, payment receipts, inventory allocation, warehousing, and much more. Technologies like AI, machine learning, data analytics, connected vehicles, and advanced mapping and tracking can be utilized for delivery planning.

Return Handling

Return of products is a major concern too for supply chain management professionals. IT platforms can combine inventory management and logistics management to plan the return of goods facilities. As a value-added service, return handling planning can deal with things like authorized returns, schedules for shipment, product replacement, and possible refunds.

Top-tier enterprises always keep backup plans for all situations and constantly refine the execution plans. Depending on the conditions and market situations, supply chain management systems need to be updated and have real-time access to increase efficiency.

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