Aggregate planning is usually a capacity arrangement that typically covers a time zone of between two to 18 months. This is useful to organizations that are experiencing seasonal or other variations in demand. It is aimed at getting a production plan which utilizes the resources of the company towards the satisfaction of the overall demand. Companies use aggregate planning because it requires a lot of time. For example, hiring takes time. Besides, it is hard to predict the timing and volume of demand for individual products. Aggregate planning also helps the company in synchronization of flow in the entire supply chain process. It affects the use of equipment, their cost, the level of employment and the avenues to be pursued in satisfaction of customer needs. Those charged with the responsibility of aggregate planning exercise caution on the demand quantity and timing. If the demand surpasses the limit, companies try to achieve a balance through alteration of the capacity, demand or both. In the event that the demand and quantity are equal, planners handle the uneven demand within the period of planning. This is done to ensure equality in capacity and demand over the period of planning while keeping the operational costs on the low.
This paper summarizes the article, ‘Supply Chain Management degrees a hot commodity’ and relate it with the latter concept of aggregate planning.
The article shows how colleges are apparently involved in the scramble for combining programs that are correlated to the management of supplies. The field of Supply Chain management is rapidly growing as a result of the desire of companies to internalize. Levels of supply chain management require huge salaries since those who specialize in the field demand so. The levels will become more valuable with time as the technologies will impact new modes of transportation, and warehousing. Global organizations will thus, employ people with such qualifications. Increased specialization has been impacted by the high population and complexity of industries that keeps changing. Many firms outsource various supply chain services like tracking, logistics among others. This is because their own employees are unable to handle such responsibilities. Resources and training, costs companies a lot more compared to outsourcing such services. Various organizations like Total Quality logistics and Chicago’s own Coyote logistics have been able to experience exponential growth mainly due to the third party logistics firms that they outsource. The two companies have the ability to combine resources for handling the companies’ freight needs across the world.
The article is related to the concept of aggregate planning since colleges are struggling to combine programs that deal with supply chain management. This enables the student to be prepared and enables them to deal with the expected rise in the demand for supply chain management jobs. Besides, the two firms have been successful because of their aggregate planning and effective timing of the demands for freight services. They have been able to aggregate the services because they are unable to predict the future freight changes. They continue to accumulate labor that is able to effectively handle freights whenever there is need.