In this article, learn about:
What supply planning is
The difference between supply planning and demand planning
Why supply planning is essential
How to create a supply plan
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Maintaining a healthy supply chain requires more than just reacting to stockouts or overages. It is about following the links to discover pain points and identify what is impacting your sales and inventory. Mapping out your supply chain can be a game-changer. This process is called supply planning (also known as supply chain planning or SCP).
What is a Supply Plan?
A supply plan is a strategic forecast of how much product is needed and when it should be produced, warehoused, shipped, and stocked to meet anticipated demand. It covers the end-to-end logistics of moving goods through the supply chain and aligns operations with expected customer orders.
Suppliers typically use supply planning in tandem with warehouse, production, and procurement strategies. Supply planning helps determine how much to manufacture, when to order raw materials, and where to position inventory based on historical data, current stock levels, and projected demand.
Supply planning can be short-term, medium-term, or long-term. Short-term planning occurs on a daily to weekly basis. Short-term planning may come into effect when unaccounted issues arise. For example, tariffs could suddenly change, impacting your supply, causing your team to make short-term pivots. Modern supply planning generally looks 6 to 12 months ahead. Long-term planning horizons (3–5 years) are becoming more common for strategic goals. Some retailers, like Walmart, maintain a rolling 13-week projection for enhanced responsiveness and real-time forecasting accuracy.
Supply Planning vs. Demand Planning
While supply planning focuses on operational readiness (production, logistics, and inventory), demand planning forecasts customer demand based on trends, historical sales, promotions, and market conditions.
Demand planning is outward-facing—what consumers are likely to buy.
Supply planning is inward-facing—how you'll meet that demand with available resources.
Demand forecasts inform supply plans, while supply constraints (like limited materials or production capacity) can influence demand strategies. The best supply chains use an integrated planning model that balances both sides to reduce excess stock and avoid out-of-stocks.
Related Reading: What is Demand Planning?
Supply planning is most effective when it's fueled by accurate, forward-looking data. In Walmart's Scintilla platform, suppliers can pull two key datasets to inform their supply plans:
Store Demand Forecast which predicts what Walmart expects to sell to customers.
Order Forecast which estimates what Walmart plans to order from suppliers in the coming weeks.
While the Store Demand Forecast provides visibility into consumer-driven demand, the Order Forecast shows anticipated inventory replenishment needs from Walmart’s perspective. Both datasets include detailed business elements—such as forecasted quantities, scheduled arrival dates, and order lead times—that help suppliers plan production and shipping with precision.
By regularly pulling and analyzing these reports through Scintilla’s Report Builder, suppliers can align their supply planning strategies with real-time retail expectations, reduce guesswork, and improve OTIF compliance.
Related Reading: How to Pull Reports in Scintilla?
How Do I Create a Supply Plan?
First, create a target. Determine whether you are planning for a number of weeks’ supply or a number of units to keep in inventory. There are other targets you can use. Look into calculating how long your stock will last in the stores and go from there.
Then, decide how far you wish to forecast.
A further forecast horizon may increase your safety stock, as a longer view of your procurement strategy can lead to uncertain forecasts and a need for a buffer against stockouts.
The deeper you go into your supply chain, the harder it is to forecast accurately. That’s because there are more steps involved, like when you ship to a distributor, who then ships to a wholesaler, who sends it to a retailer, who finally sells to the customer. Each extra link adds more uncertainty.
It is critical to assess how much each level in your supply chain is holding in stock and compare that to how much the consumer ends up buying.
Related Reading: How Do I View My Walmart Instocks?
Next, determine how much inventory your stores have. Calculate the number of items “in pipe” (on hand, in transit, in the warehouse, and on order).
Then, create a store-level demand forecast to estimate how many units each store will order in a particular period. Again, there are two forecasting methods: weeks of supply versus a static number of units or cases per store. You can select a forecasting method by analyzing the historical point-of-sales information for each store.
Finally, step through each store’s demand forecast and subtract the store’s inventory from the number of units that you have forecasted the store will sell. When that number drops below your target, you’ll know it’s time to create more inventory.
Why is a Supply Planning Essential?
Creating an effective supply plan can solve a great deal of inventory and replenishment issues. Supply planning can decrease production costs due to fewer changes in manufacturing methods, procurement costs due to reduced last-minute purchasing, and logistics costs due to fewer expedited orders.
Without a supply plan, production planning may place your focus just on your inventory levels, meaning you may be missing the bigger picture. Low inventory levels can lead to out-of-stocks, which will increase expediting costs. Additionally, focusing on inventory levels alone can increase logistical costs as your stock moves from one warehouse to another.
Supply planning reduces the bullwhip effect. Sudden supply and demand changes near the consumer level can significantly affect production. Even a small bullwhip event can have a massive impact on the supply chain, as far upstream as the manufacturer.
Having a proper supply plan allows you to put the right amount of inventory into the right place at the right time. Supply planning, consequently, increases customer service and, by proxy, consumer happiness.
Good supply planning will also lead to better compliance with customer standards. In Walmart’s case, the retailer now requires suppliers to be 98% on time for collect ready cases, 90% on time for prepaid cases, and 95% in full for all cases ordered. Without a supply plan, these OTIF goals can be daunting
A supply plan helps you get your inventory ready to go so that you can meet collect ready appointments, ship products within the delivery window, and deliver all of the items ordered.
Sound Complicated? SupplyPike Can Help.
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