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4.1 - Plan for and align supply chain resources

PCF ID: 10215 | Elements: 56 | Metrics Available: Y | Benchmarkable: 2

Definition

Creating strategies for production and materials. Handle the demand for the products of the organization. Develop plans for handling materials. Develop and administer the schedule for master production. Plan for distribution requirements and its constraints by reviewing and assessing distribution policies and performance and by establishing quality standards and procedures.

Overview

This process group covers plan for and align supply chain resources within the broader context of Deliver Physical Products.

Process Hierarchy

Processes

IDProcessPCF IDSub-elementsMetrics
4.1.1Develop production and materials strategies102219N
4.1.2Manage demand for products102227N
4.1.3Create materials plan102236N
4.1.4Create and manage master production schedule102243N
4.1.5Plan distribution requirements1704212N
4.1.6Establish distribution planning constraints102264N
4.1.7Review distribution planning policies102273N
4.1.8Develop quality standards and procedures103683N

4.1.1 - Develop production and materials strategies

PCF ID: 10221

Definition: Creating strategies for production processes, as well as the process of managing materials. Define production and supply constraints. Design a blueprint of the workplace. Establish rules and regulations regarding the employees, outsourcing of services, and the expenditure to be incurred on the manufacturing capital.

IDActivityPCF IDTasksMetrics
4.1.1.1Define manufacturing goals102290N
4.1.1.2Define labor and materials policies102300N
4.1.1.3Define outsourcing policies102310N
4.1.1.4Define capital expense policies102320N
4.1.1.5Define capacities102330N
4.1.1.6Define production network and supply constraints102340N
4.1.1.7Define production process141930N
4.1.1.8Define standard operating procedures195510N
4.1.1.9Define production workplace layout and infrastructure141940N
4.1.1.1 - Define manufacturing goals

Definition: Creating quantifiable strategic objectives for each manufacturing segment in conjunction with sales projections.

4.1.1.2 - Define labor and materials policies

Definition: Setting up internal rules and regulations regarding the employees and the materials.

4.1.1.3 - Define outsourcing policies

Definition: Creating rules and regulations regarding contracting out of a business process to another party in order to reduce costs.

4.1.1.4 - Define capital expense policies

Definition: Designing rules and regulations pertaining to the expenditure incurred in acquiring or upgrading the existing stock of manufacturing capital.

4.1.1.5 - Define capacities

Definition: Outlining the manufacturing and processing capacities of the organization. Delineate the capabilities required for optimizing output with available resources. Analyze capabilities possessed by the organization concerning the raw materials required and the process necessitated for producing finished products.

4.1.1.6 - Define production network and supply constraints

Definition: Defining limitations in the ability of the organization's supply chain to deliver a new stock, and creating a network of production stakeholders. Frame and manage relationships within the flow of manufacturing and processing operations. Identify probable supply issues.

4.1.1.7 - Define production process

Definition: Outlining the scheme of processing inventory into finished products/services. This includes the use of raw materials, machinery, skill sets, and knowledge to create new offerings.

4.1.1.8 - Define standard operating procedures

Definition: Establishing or prescribing methods to be followed routinely for the performance of designated operations or in designated situations. This may include step-by-step instructions to help workers carry out complex routine operations. The goal is to improve efficiency, quality, and uniformity of performance, while reducing miscommunication, failure, or rework.

4.1.1.9 - Define production workplace layout and infrastructure

Definition: Determining the floor plans for the processing facility that is meant for delivering finished products/services. Identify the totality of infrastructure needed for using this space in the manufacturing process, including machinery, factory floors, offices, and furniture.

4.1.2 - Manage demand for products

PCF ID: 10222

Definition: Forecasting demand for products using secondary research and customer feedback. Refine these forecasts. Inspect the approach used in creating forecasts, and determine its accuracy.

IDActivityPCF IDTasksMetrics
4.1.2.1Develop baseline demand forecasts102350N
4.1.2.2Collaborate demand with customers102360N
4.1.2.3Develop demand consensus forecast102370N
4.1.2.4Determine available to promise102380N
4.1.2.5Monitor activity against demand forecast and revise forecast102390N
4.1.2.6Evaluate and revise demand forecasting approach102400N
4.1.2.7Measure demand forecast accuracy102410Y
4.1.2.1 - Develop baseline demand forecasts

Definition: Identify the bedrock levels of market demand anticipated for the organization's products/services. Estimate future demand for product and services using historical data, analysis of the market environment and any externalities, etc. to create ex ante approximations.

4.1.2.2 - Collaborate demand with customers

Definition: Working closely with the organization's customers to understand their drives and behavior, with the objective of estimating future demand. Reach out to customers through various means to understand their behavior patterns, usage elasticity, and degree of variability--and ultimately determine demand for each offering.

4.1.2.3 - Develop demand consensus forecast

Definition: Arriving at a consensus over the forecasted levels of demand for products/services. Consensus is achieved by juxtaposing decisions developed in the baseline forecast with those reached at by collaborating with customers. Enlist senior-level decision makers of the sales and marketing functions.

4.1.2.4 - Determine available to promise

Definition: Identify the volume of products/services that may be committed for delivery to fulfill sales. Figure out the amount of stock available. Forecast its volumes.

4.1.2.5 - Monitor activity against demand forecast and revise forecast

Definition: Picking out any activity that deviates from the forecast, and adjusting it. Closely track and study the levels of demand as they emerge. Refine the consensus forecast as needed.

4.1.2.6 - Evaluate and revise demand forecasting approach

Definition: Examining the methodology used to estimate future demand. Refine it in light of current market realities and demand.

4.1.2.7 - Measure demand forecast accuracy

Definition: Calculating and inspecting the accuracy of demand forecasts. Use metrics to check the reliability of the forecasts created.

4.1.3 - Create materials plan

PCF ID: 10223

Definition: Developing a scheme that allows for advance planning for the availability of raw materials and spares. Start with an unconstrained plan, and refine based on supply chain realities by identifying critical materials required for production, checking material specifications, and collaborating with all vendors over the supply.

IDActivityPCF IDTasksMetrics
4.1.3.1Create unconstrained plan102420N
4.1.3.2Collaborate with supplier and contract manufacturers102430N
4.1.3.3Identify critical materials and supplier capacity102440N
4.1.3.4Monitor material specifications102450N
4.1.3.5Generate constrained plan102460N
4.1.3.6Define production balance and control141960N
4.1.3.1 - Create unconstrained plan

Definition: Developing a plan for raw materials and other inventory items in order to meet market demand. Ensure the availability of all inventory items such as raw materials and spares. Create a blueprint in line with Define labor and materials policies [10230].

4.1.3.2 - Collaborate with supplier and contract manufacturers

Definition: Collaborating with vendors and contractual manufacturers with the objective of ensuring a continual supply of raw materials and spares. Leverage long-term connections/relationships with various suppliers, and cultivate new ones. Track the activities of all vendors. Receive regular updates to prepare for any fluctuations in supply.

4.1.3.3 - Identify critical materials and supplier capacity

Definition: Identifying principal materials needed for the manufacturing process and the levels of supply that may be ensured for them. Determine the essential and crucial inventory items required for the smooth functioning of all manufacturing processes. Estimate the average, peak, and baseline capacities of various vendors and suppliers. Establish the capability of individual suppliers from the market and the vendors.

4.1.3.4 - Monitor material specifications

Definition: Observing and surveying all inventory items in order to check for the veracity of their specifications. Monitor various attributes and characteristics for respective inventory items such as density, volume, and size, as well as contextualized specifications particular to the respective materials.

4.1.3.5 - Generate constrained plan

Definition: Generating a bounded plan that takes stock of the actual supply chain scenario. Take stock of all information collected while creating an inventory supply plan.

4.1.3.6 - Define production balance and control

Definition: Defining an equitable volume for the production of products/services that adheres to an equilibrium value, and creating a scheme of control for processing items. Create schematics for systematically planning, coordinating, and directing the manufacturing activities in line with the production balance determined.

4.1.4 - Create and manage master production schedule

PCF ID: 10224

Definition: Taking care of the master production plan. The master production includes creation and implementation of the site-level production plan, as well as management of the inventory that is currently in the production process.

IDActivityPCF IDTasksMetrics
4.1.4.1Model production network to enable simulation and optimization200230N
4.1.4.2Create master production schedule200240N
4.1.4.3Maintain master production schedule170410N
4.1.4.1 - Model production network to enable simulation and optimization

Definition: Create representative logical system that provides the framework to attain strategic objectives based on resources, product volumes, and processes. Provides the general sequential flow and capacity requirement relationships among raw materials, parts, resources, finished products, and product families.

4.1.4.2 - Create master production schedule

Definition: Creating the plan for internal activities such as production, inventory, and staffing. Include forecasted quantity of items to produce based on inputs from sales planning, demand planning/forecasting, and supply chain partners.

4.1.4.3 - Maintain master production schedule

Definition: Supervising and overseeing the plan for internal activities such as production, inventory, and staffing. Set the quantity of items to produce each week of a short-range planning horizon.

4.1.5 - Plan distribution requirements

PCF ID: 17042

Definition: Maintaining master data of finished products and inventory. Identify the requirements of finished products at the destination, as well as partner requirements. Calculate the consolidation at source. Manage replenishment planning. Create and administer a dispatch plan. Calculate load plans for destinations and partners. Manage the cost of supplying these products. Ensure effective utilization of capacity.

IDActivityPCF IDTasksMetrics
4.1.5.1Maintain master data102520N
4.1.5.2Determine finished goods inventory requirements at destination102530N
4.1.5.3Determine product storage facility requirements195550N
4.1.5.4Calculate requirements at destination102540N
4.1.5.5Calculate consolidation at source102550N
4.1.5.6Manage collaborative replenishment planning102560N
4.1.5.7Calculate and optimize destination dispatch plan102580N
4.1.5.8Manage dispatch plan attainment102590N
4.1.5.9Calculate and optimize destination load plans102600N
4.1.5.10Manage partner load plan102610N
4.1.5.11Manage cost of supply102620N
4.1.5.12Manage capacity utilization102630N
4.1.5.1 - Maintain master data

Definition: Maintaining and preserving the master data plan for distribution requirements. Create a systematic collection of facts and figures regarding the distribution of the inventories. Maintain policies, processes, and tools covering the distribution function.

4.1.5.2 - Determine finished goods inventory requirements at destination

Definition: Interact with the concerned person at the destination to validate the requirements and to avoid any miscommunication of information.

4.1.5.3 - Determine product storage facility requirements

Definition: Evaluate constraints, needs, parameters, and conditions for physical storage and retrieval of components or products for future use or shipment in a storage facility within a certain timeframe.

4.1.5.4 - Calculate requirements at destination

Definition: Interact with the concerned authority at the destination to reach a specific figure that correctly represents requirements.

4.1.5.5 - Calculate consolidation at source

Definition: Determining the aggregate volume of products/services consolidated at the source. Calculate the number of finished products that are ready to be delivered to the customers, particularly at one date.

4.1.5.6 - Manage collaborative replenishment planning

Definition: Administering the plan for collaborative replenishment of goods. Replenish inventory by creating a plan in case of faulty production.

4.1.5.7 - Calculate and optimize destination dispatch plan

Definition: Estimating the timing and duration of the delivery of the inventory from the source to the destination. Plan the logistic details of all the distribution routes and activities.

4.1.5.8 - Manage dispatch plan attainment

Definition: Accomplishing the dispatch plan. Strictly follow the schedule, and adjust for deviations. Coordinate with the concerned authorities at various destinations.

4.1.5.9 - Calculate and optimize destination load plans

Definition: Evaluating the plans for delivering loads to destinations. Create a systematic plan that specifies the load plans for every single destination.

4.1.5.10 - Manage partner load plan

Definition: Administering the load plan for partners. Manage the delivery, and dispatch from the source to the partners.

4.1.5.11 - Manage cost of supply

Definition: Managing all expenses to provide products/services in the market. Estimate the overall cost of supplying of products/inventory, including the cost distributing it through various partners and channels. Consider the cost of all the logistical processes that occur from the moment a product is ready to be dispatched to the time it reaches the destination.

4.1.5.12 - Manage capacity utilization

Definition: Determining the capacity utilization of the organization's production process. Realize the extent to which an enterprise uses its installed productive capacity (i.e., the relationship between output and the potential output if capacity was fully used).

4.1.6 - Establish distribution planning constraints

PCF ID: 10226

Definition: Instituting the constraints for planning of distribution process. Create a plan that specifies every element in the distribution process from the blueprint of the distribution centers to how and when the inventory would reach the distribution centers.

IDActivityPCF IDTasksMetrics
4.1.6.1Establish distribution center layout constraints102670N
4.1.6.2Establish inventory management constraints102680N
4.1.6.3Establish transportation management constraints102690N
4.1.6.4Establish storage management constraints195580N
4.1.6.1 - Establish distribution center layout constraints

Definition: Instituting the constraints for creating a layout for distribution center. Consider factors such as the number of customers, demand forecasting, product groups, condition of product conservation, warehousing, and transportation management.

4.1.6.2 - Establish inventory management constraints

Definition: Determining any problems that might be faced while managing inventory. Identify problems and possible issues in managing the warehousing of the raw materials, spares, and other items of inventory. Take stock of inventory needs, and determine the exact quantity of the inventory needed in the near future.

4.1.6.3 - Establish transportation management constraints

Definition: Identifying any potential constraints while deciding on the dispatch and delivery plan from the source to the various distribution centers. Decide how the inventory will be transported , which and how many transportation means to use, what route to take, etc.

4.1.6.4 - Establish storage management constraints

Definition: Determining potential constraints for physical storage and retrieval of components or products in a storage facility within a certain timeframe. Consider factors such as the building shape, height, capacity, door locations, lift equipment, automation, etc.

4.1.7 - Review distribution planning policies

PCF ID: 10227

Definition: Revisiting and refurbishing the policies for planning the distribution process. Asses the distribution strategies, including how the products are to be made available and sent to different distributors. Set guidelines regarding relationships between the sources and the distribution centers.

IDActivityPCF IDTasksMetrics
4.1.7.1Review distribution network102640N
4.1.7.2Establish sourcing relationships102650N
4.1.7.3Establish dynamic deployment policies102660N
4.1.7.1 - Review distribution network

Definition: Evaluating the system that defines how the products/inventory would reach from the source (i.e., manufacturer) to the destination (i.e., retailer/distributer).

4.1.7.2 - Establish sourcing relationships

Definition: Establishing relationships with transportation/distribution sources in order to ensure an effective distribution network and strategy. Screen and evaluate various sources available to pick out the best among them.

4.1.7.3 - Establish dynamic deployment policies

Definition: Creating strategic guidelines on the availability of the products at all the distribution centers. Create a dynamic network to ensure availability at all times, even in cases of defaults.

4.1.8 - Develop quality standards and procedures

PCF ID: 10368

Definition: Developing standards and procedures for maintaining the quality of products/services. Establish desired quality targets. Create standardized procedures for the quality. Ensure quality specifications are effectively communicated.

IDActivityPCF IDTasksMetrics
4.1.8.1Establish quality targets103710N
4.1.8.2Develop standard testing procedures103720N
4.1.8.3Communicate quality specifications103730N
4.1.8.1 - Establish quality targets

Definition: Defining specific qualitative and quantitative target figures.

4.1.8.2 - Develop standard testing procedures

Definition: Creating standard procedures for testing the quality of products/services. Describe the steps of key processes to help ensure consistent and quality output. Define the routine instructions for performing the quality testing activity.

4.1.8.3 - Communicate quality specifications

Definition: Communicating the desired quality specifications to the manufacturing units, as well as the distribution centers, to avoid any misunderstanding or misinterpretation.

Change Summary (v7.2.1 vs v6.1.1)

Changes indicated by:

  • +XXXXX - New element added
  • -XXXXX - Element removed
  • cXXXXX - Element changed
  • NEW - Newly introduced

Complete Element List with Definitions

All 56 elements
IDNameDefinition
4.1Plan for and align supply chain resourcesCreating strategies for production and materials. Handle the demand for the products of the organiza...
4.1.1Develop production and materials strateg...Creating strategies for production processes, as well as the process of managing materials. Define p...
4.1.1.1Define manufacturing goalsCreating quantifiable strategic objectives for each manufacturing segment in conjunction with sales ...
4.1.1.2Define labor and materials policiesSetting up internal rules and regulations regarding the employees and the materials.
4.1.1.3Define outsourcing policiesCreating rules and regulations regarding contracting out of a business process to another party in o...
4.1.1.4Define capital expense policiesDesigning rules and regulations pertaining to the expenditure incurred in acquiring or upgrading the...
4.1.1.5Define capacitiesOutlining the manufacturing and processing capacities of the organization. Delineate the capabilitie...
4.1.1.6Define production network and supply con...Defining limitations in the ability of the organization's supply chain to deliver a new stock, and c...
4.1.1.7Define production processOutlining the scheme of processing inventory into finished products/services. This includes the use ...
4.1.1.8Define standard operating proceduresEstablishing or prescribing methods to be followed routinely for the performance of designated opera...
4.1.1.9Define production workplace layout and i...Determining the floor plans for the processing facility that is meant for delivering finished produc...
4.1.2Manage demand for productsForecasting demand for products using secondary research and customer feedback. Refine these forecas...
4.1.2.1Develop baseline demand forecastsIdentify the bedrock levels of market demand anticipated for the organization's products/services. E...
4.1.2.2Collaborate demand with customersWorking closely with the organization's customers to understand their drives and behavior, with the ...
4.1.2.3Develop demand consensus forecastArriving at a consensus over the forecasted levels of demand for products/services. Consensus is ach...
4.1.2.4Determine available to promiseIdentify the volume of products/services that may be committed for delivery to fulfill sales. Figure...
4.1.2.5Monitor activity against demand forecast...Picking out any activity that deviates from the forecast, and adjusting it. Closely track and study ...
4.1.2.6Evaluate and revise demand forecasting a...Examining the methodology used to estimate future demand. Refine it in light of current market reali...
4.1.2.7Measure demand forecast accuracyCalculating and inspecting the accuracy of demand forecasts. Use metrics to check the reliability of...
4.1.3Create materials planDeveloping a scheme that allows for advance planning for the availability of raw materials and spare...
4.1.3.1Create unconstrained planDeveloping a plan for raw materials and other inventory items in order to meet market demand. Ensure...
4.1.3.2Collaborate with supplier and contract m...Collaborating with vendors and contractual manufacturers with the objective of ensuring a continual ...
4.1.3.3Identify critical materials and supplier...Identifying principal materials needed for the manufacturing process and the levels of supply that m...
4.1.3.4Monitor material specificationsObserving and surveying all inventory items in order to check for the veracity of their specificatio...
4.1.3.5Generate constrained planGenerating a bounded plan that takes stock of the actual supply chain scenario. Take stock of all in...
4.1.3.6Define production balance and controlDefining an equitable volume for the production of products/services that adheres to an equilibrium ...
4.1.4Create and manage master production sche...Taking care of the master production plan. The master production includes creation and implementatio...
4.1.4.1Model production network to enable simul...Create representative logical system that provides the framework to attain strategic objectives base...
4.1.4.2Create master production scheduleCreating the plan for internal activities such as production, inventory, and staffing. Include fore...
4.1.4.3Maintain master production scheduleSupervising and overseeing the plan for internal activities such as production, inventory, and staff...
4.1.5Plan distribution requirementsMaintaining master data of finished products and inventory. Identify the requirements of finished pr...
4.1.5.1Maintain master dataMaintaining and preserving the master data plan for distribution requirements. Create a systematic c...
4.1.5.2Determine finished goods inventory requi...Interact with the concerned person at the destination to validate the requirements and to avoid any ...
4.1.5.3Determine product storage facility requi...Evaluate constraints, needs, parameters, and conditions for physical storage and retrieval of compon...
4.1.5.4Calculate requirements at destinationInteract with the concerned authority at the destination to reach a specific figure that correctly r...
4.1.5.5Calculate consolidation at sourceDetermining the aggregate volume of products/services consolidated at the source. Calculate the numb...
4.1.5.6Manage collaborative replenishment plann...Administering the plan for collaborative replenishment of goods. Replenish inventory by creating a p...
4.1.5.7Calculate and optimize destination dispa...Estimating the timing and duration of the delivery of the inventory from the source to the destinati...
4.1.5.8Manage dispatch plan attainmentAccomplishing the dispatch plan. Strictly follow the schedule, and adjust for deviations. Coordinate...
4.1.5.9Calculate and optimize destination load ...Evaluating the plans for delivering loads to destinations. Create a systematic plan that specifies t...
4.1.5.10Manage partner load planAdministering the load plan for partners. Manage the delivery, and dispatch from the source to the p...
4.1.5.11Manage cost of supplyManaging all expenses to provide products/services in the market. Estimate the overall cost of suppl...
4.1.5.12Manage capacity utilizationDetermining the capacity utilization of the organization's production process. Realize the extent to...
4.1.6Establish distribution planning constrai...Instituting the constraints for planning of distribution process. Create a plan that specifies every...
4.1.6.1Establish distribution center layout con...Instituting the constraints for creating a layout for distribution center. Consider factors such as ...
4.1.6.2Establish inventory management constrain...Determining any problems that might be faced while managing inventory. Identify problems and possibl...
4.1.6.3Establish transportation management cons...Identifying any potential constraints while deciding on the dispatch and delivery plan from the sour...
4.1.6.4Establish storage management constraintsDetermining potential constraints for physical storage and retrieval of components or products in a ...
4.1.7Review distribution planning policiesRevisiting and refurbishing the policies for planning the distribution process. Asses the distributi...
4.1.7.1Review distribution networkEvaluating the system that defines how the products/inventory would reach from the source (i.e., man...
4.1.7.2Establish sourcing relationshipsEstablishing relationships with transportation/distribution sources in order to ensure an effective ...
4.1.7.3Establish dynamic deployment policiesCreating strategic guidelines on the availability of the products at all the distribution centers. C...
4.1.8Develop quality standards and proceduresDeveloping standards and procedures for maintaining the quality of products/services. Establish desi...
4.1.8.1Establish quality targetsDefining specific qualitative and quantitative target figures.
4.1.8.2Develop standard testing proceduresCreating standard procedures for testing the quality of products/services. Describe the steps of key...
4.1.8.3Communicate quality specificationsCommunicating the desired quality specifications to the manufacturing units, as well as the distribu...

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