What is a general rule for planning horizons in distribution?

The concept of planning horizons in distribution is closely linked to the need to account for lead times throughout the supply chain. When effective planning is conducted, organizations must project their inventory and distribution needs into the future based on various factors, including both demand forecasts and how long it takes to receive goods from suppliers.

Planning horizons extend into the future to ensure that all elements of the supply chain are considered, from the initial order point to the eventual delivery of goods to customers. By including lead times in these horizons, organizations can proactively manage inventories, align production schedules, and ensure timely deliveries. This approach allows for better decision-making regarding inventory levels and helps prevent stockouts or excess inventory, which can disrupt the flow of goods and compromise customer satisfaction.

This perspective prioritizes a comprehensive view of the supply chain's operations, emphasizing the importance of anticipating future demand while factoring in the complexities of sourcing and distribution lead times. Thus, recognizing and utilizing this perspective is essential for effective distribution planning.