What does interplant demand refer to?

Interplant demand refers to the requirement for a part or good produced by one plant to be supplied to another plant within the same organization. This concept is crucial in supply chain management because it emphasizes the interactions and dependencies among various facilities within a company. When one plant needs a component or finished good produced by another facility, it reflects the internal supply chain dynamics and highlights the importance of coordination between plants to ensure efficient operations and meet production goals.

Understanding interplant demand allows organizations to optimize inventory levels, reduce lead times, and improve production planning. It is different from external demand, which involves sales to customers or clients outside of the organization, and distinguishes itself from supplier demand or market trend forecasting, as it focuses on internal resource allocation rather than external market influences. This comprehension of interplant dynamics is essential for achieving a seamless flow of materials and information across the enterprise.