A methodology employed in business management focuses on strategically planning the allocation of resources across a supply chain. This process aims to optimize the flow of goods from the manufacturer to the end customer. It incorporates forecasting, inventory control, and logistical planning to ensure product availability at various distribution points. For instance, a consumer goods company may utilize this approach to determine the optimal stock levels at regional warehouses, considering factors like anticipated demand, lead times, and transportation costs.
The value lies in its capacity to minimize stockouts, reduce holding costs, and improve overall customer service. By integrating demand forecasts with resource availability, organizations can make informed decisions about inventory deployment and transportation scheduling. Its origins trace back to the evolution of manufacturing resource planning (MRP) and enterprise resource planning (ERP) systems, expanding the scope to encompass the complexities of distribution networks.
