In the previous article (“Logistyka” 3/05), general considerations regarding distribution planning were presented. Now, let us take a closer look at the calculations performed at individual stages of the planning process. We will analyze two scenarios which, together, seem to roughly correspond to most situations encountered in practice.
In both cases, we assume a two-stage distribution: a certain product is first transported from the Production Plant (PP) to Main Distribution Centers (MDC), and from there to Local Distribution Centers (LDC). These scenarios differ in the response time for deliveries between the MDC and LDC. In the first one, we are dealing with a long response time – say, several weeks, while in the second, it is a short response time: at most a few days. Consequently, different approaches to planning will be applied at this stage of distribution: a focus on medium-term planning in the case of the first scenario, whereas in the case of the second scenario, a focus on short-term planning.
Calculations in logistics planning are generally carried out using appropriate tables, which can be implemented based on spreadsheets or with the help of specialized software. In order not to overcomplicate the descriptions, the planning tables presented below are quite simplified. In practice, a number of additional data and more complex calculations are needed to ensure the proper quality of the plans.
Scenario 1
As noted above, the first scenario assumes that LDCs send their forecasted medium-term demand to the MDCs. Based on this, the MDCs calculate their requirements and send them to the PP. Next, production planning takes place, followed by planning shipments from the PP to the MDCs, and finally, planning shipments from the MDCs to the LDCs, which closes the planning cycle.
In both cases, we assume a two-stage distribution: a certain product is first transported from the Production Plant (PP) to Main Distribution Centers (MDC), and from there to Local Distribution Centers (LDC). These scenarios differ in the response time for deliveries between the MDC and LDC. In the first one, we are dealing with a long response time – say, several weeks, while in the second, it is a short response time: at most a few days. Consequently, different approaches to planning will be applied at this stage of distribution: a focus on medium-term planning in the case of the first scenario, whereas in the case of the second scenario, a focus on short-term planning.
Calculations in logistics planning are generally carried out using appropriate tables, which can be implemented based on spreadsheets or with the help of specialized software. In order not to overcomplicate the descriptions, the planning tables presented below are quite simplified. In practice, a number of additional data and more complex calculations are needed to ensure the proper quality of the plans.
Scenario 1
As noted above, the first scenario assumes that LDCs send their forecasted medium-term demand to the MDCs. Based on this, the MDCs calculate their requirements and send them to the PP. Next, production planning takes place, followed by planning shipments from the PP to the MDCs, and finally, planning shipments from the MDCs to the LDCs, which closes the planning cycle.
The article comes from the magazine “Logistyka” no. 4/2005.