Supply Driven Planning
Production planning can be driven by either demand or supply requirements. Demand is the more common of the two methods, as most production activities are performed to meet existing needs.
Sometimes, a supply driven planning process can be the preferable method. This is particularly true in environments in which raw materials enter the inventory regardless of existing demand conditions. An example of this is a company that grows, harvests, and processes produce. In this type of scenario, demand does not have any impact on the quantity of raw materials that enter the inventory; high or low demand will not change the amount of available produce that can be harvested from the fields.
In a demand planning environment, the primary focus of the production planner is what needs to be manufactured. Once this question is resolved, the next issue becomes figuring out what materials must be gathered in order to complete the necessary production requirements. In a supply driven location, these priorities are reversed. With a steady stream of raw materials entering the inventory, the production planner's key concern becomes the current on hand quantity of these materials, and how they can be processed.