Supply planning plans within the constraints, while S&OP and strategic planning generally plan for demand, observe limitations, and then determine if it is profitable to increase the system’s capacity through investment. Sensitivity analysis is one of the major benefits of optimization, but it is not part of the supply planning process. Instead, companies show a strong preference for using optimizers by feeding them unchanging constraints. The objective is to find ranges of change where the solution is “sensitive” to changes in the variables – which is not often performed in supply chain optimization. Introduction to ConstraintsĪs is discussed in other articles on this blog, sensitivity analysis – which is the study of how the solution changes depending upon changes to different variables. This definition is taken from my book Supply Planning with MRP/DRP and APS Software. Simulation is sometimes performed on different hardware, or on different instances of the application but on the same hardware. The results are analyzed within the planning system, and the planning run is frequently performed with repetitive checks to the results and often changes to master data parameters.
Simulation is a planning run, which may be performed on the production system (in a simulation version, or in a separate simulation environment–in the same software or in different software), which is not intended to have its recommendations sent to the ERP system for execution.
The Definition of Supply Chain Simulation?