Supply Chain Planning

Safety stock

quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. Over planning supply versus demand can be used to create safety stoc

Firmed Planned Order

A planned order that can be frozen in quantity and time so that the MRP computer logic cannot automatically change when conditions change. Established by the Planner or Supply Chain Manager to prevent system nervousness. This can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders

closed loop mrp

feedback feature aggregate production planning master production planning materials requirement planning

Supply chain planning

he element to determining how to satisfy requirements created by the Demand Plan - Aggregate Production Planning (APP) - Master Production Scheduling (MPS) - Materials Requirement Planning (MRP) - Distribution Requirements Planning (DRP) - Capacity Planning Hierarchical and divided into 3 categories: Long range (top management), intermediate (middle management) , short range (managers, supervisors)

implementing ERP

1. Best-of-breed- pick the best application for each individual function. Disadvantage - software may not integrate well but this may not be a major issue in future 2. Single integrator solution - pick all the desired applications from a single vendor

Capacity Planning

1. Resource requirement planning: A long-range capacity planning module to check if aggregate resources (i.e., labor and manpower) are capable of satisfying the Aggregate Production Plan. 2. Rough cut capacity planning: edium-range capacity planning to check feasibility of the Master Production Schedule. Converts MPS from the production needed to the capacity required, then compares it to capacity available 3. Capacity Requirement planning: A short-range capacity planning module used to check the feasibility of the Material Requirements Plan.

Basic production Strategies

1. level production strategy: constant output rate while varying inventory and backlog according to a fluctuating demand. Firm relies on fluctuating finished goods and backlogs to meet demand. Works well for make-to-stock firm 2. Chase production strategy: Adjusts capacity to match demand. Firm hires and lays off workers to match finished output to demand. Works well for make-to-order firms 3. Mixed production strategy: Maintains stable core workforce while using other short-term means, such as overtime, subcontracting and part time helpers to manage short-term demand.

Sales & operations planning S&OP

A process that brings all the demand and supply plans for the business(sales, marketing, development, production, sourcing, and finance) together to provide management with the ability to strategically direct the business to achieve a competitive advantage

Distribution requirement planning

A time-phased finished good inventory replenishment plan in a distribution network. The function of determining the need to replenish inventory at branch warehouses

Distribution Requirement Planning

DRP is the function of determining the need to replenish finished product inventory at branch warehouses, when there are multiple warehouses in the network

Aggregate production plan

Planning process translating annual business, marketing plans, and demand forecasts into a production plan for a product family* in a plant or facility. Purpose to establish production rates to achieve management's objective to satisfy customer demand by maintaining, raising, or lowering inventories, while attempting to keep the workforce relatively stable. change inventory levels or change capacity

Pegging

Relates the gross requirements for a component part to the planned order releases of the parent item, so as to identify the source(s) of the item's gross requirements. Pegging can be thought of as active where-used information

Business Planning

Strategic & financial plans The Business Plan, with its long-term focus, provides the company's direction and objectives for the next two to ten years.

Bill of Materials

document that shows an inclusive listing of all component parts and assemblies making up the final product. single or multiple layer (finished products, components, raw materials)

explosion

The process of converting a parent item's planned order releases into component gross requirements

major erp includes

accounting, finance, hr, customer relations, scm, Major providers: SAP, Oracle, Microsoft

Problems of implementing erp

ack of top management commitment Lack of adequate resources Lack of proper training Lack of communication incompatible system e

Material Requirement planning MRP

computer-based materials management system that calculates the exact quantities, need dates, and planned order releases for subassemblies, component parts and materials required to manufacture a final product. Requires: 1. The independent demand information i.e., finished product forecast 2.Parent-component relationships from BOM 3.Inventory status of final product and each of the components and materials. 4.Planned order releases (output of MRP

manufacturing resource planning

computerize coordinates the arrival of materials with the availability of machine and labor.

Master Production Schedule

detailed production plan, listing the exact end items to be produced by a specific period Under app

Enterprise Resource planning ERP

nformation system connecting functional areas and operations of an organization, and in some cases suppliers and customers, via common software infrastructure and database

Time Fencing

to minimize the impact of changes in the MPS, many companies have adopted a time fencing policy separating the planning horizon into a firmed time period and a planned time period Firmed Time Period: From the current date out several weeks into future. —A Firm Time Fence is established at the outer limit of that period when changes can no longer be made automatically by the planning system. —Recommended changes must be reviewed and approved by the Master Production Scheduler or an authorized person(s) Planned Time Period: rom the end of the Firmed Time Period to the end of the planning horizon.—The planning system is free to create or make changes to planned orders in this time period based on the data and planning logic determined by the company