Supply Chain Exam 3

ERP (Enterprise Resource Planning) System

A software system made up of related databases that shares information across departments

Key Features of ERP

Modular (modules can be added or removed), integrated (updating one modules updates all system information), planning and control (reporting, tracking, forecasting)

Key ERP Databases

Address book (stores accurate customer, supplier, and delivery addresses), item master (stores accurate product info and specifications), system settings (processes, status levels, system operations)

Status Levels

Track a product’s location, status, and who last handled it

Bolt-Ons

Third-party software that enhances ERP functionality

Data Warehousing

Stores historical data outside the ERP to improve performance

Cloud Computing

Remotely hosted applications and storage accessed through the internet

Logistics

Getting products to the right place, at the right time, in the right condition, for the right cost

Distribution Center

Recieves and distributes products in large batches

Fulfillment Center

Picks individual products and prepares customer orders

Warehouse

Stores products, typically for longer periods

3PL Center

Third party company that manages logistics and inventory for other businesses

High-Cube Center

Warehouse designed for high-density storage

Cross-Dock

Quickly transfers products from incoming to outgoing transportation

DSD (Direct Store Delivery)

Products delivered directly to retail stores

LTL (Less than Truckload)

Combines shipments from multiple companies

OTR (Over the Road)

Full truckload transportation, usually long distance

Brown Water Shipping

Shipping through rivers and inland waterways

Blue Water Shipping

Shipping through oceans, usually internationally

Intermodal Shipping

Using multiple transportation methods without unloading container contents

TEU

Twenty Foot Equivalent Unit, one 20 foot container

FEU

Forty foot equivalent unit, one 40 foot container

Piggybacking

Transporting a truck trailer on a railroad car

Airfreight

Fast but expensive transportation using airplanes

Pipelines

Fixed transporation routes for liquids and gases

Final Mile

Last stage of transportation when a product reaches the consumer

Centroid Method

Finds an ideal facility location using weighted average GPS coordinates

Stem Miles

Distance between a distribution center and its customers

Factor Rating

Compares facility locations by assigning points to important factors

MRP (Material Requirements Planning) InSystem

Determines what materials are needed, how much, and when for production

Key MRP Databases

Inventory (available materials and products), master schedule (what needs to be produced when), bill of materials (BOM, all components and materials needed to make a product)

Aggregate Demand

Forcasted demand + actual demand + intra-company demand

Forecasted Demand

Expected future customer demand

Actual Demand

Customer orders already placed

Intra-Company Demand

Demand from other departments or locations within a company

Time Fences

Deadlines that limit production schedule changes

Available to Promise

Quantity available to promise customers after considering inventory, production, shipments, and commitments

Low-Level Coding

Identifies the lowest level where a component appears in a product structure

Chase Strategy

Adds or removes employees based on demand

Stable Workforce/Variable Hours

Keeps the same employees but ajusts their working hours

Leveling Strategy

Maintains stable employees and hours while building inventory for busy seasons

Random Staffing

Floor managers assign employees based on daily needs

Lot

Production run, recieved order, or grouping of similar products

Lot Sizing

Determines how much to produce or order at one time

L4L (Lot for Lot)

Produces exactly what is needed, minimizes holding costs but increases setup costs

EOQ (Economic Order Quantity)

Finds the optimal order quantity by balancing holding and setup costs

LTC (Least Total Cost)

Finds the lot size with the lowest total setup costs. When you want to find the least total cost

LUC (Least Unit Cost)

Finds the lowest combined cost per unit at a particular point in time. Market pricing and one-time sales

Inventory

Products, materials, and supplies a company owns but has not sold or used

Inventory Systems

Processes and equipment used to monitor inventory quantities, locations, and status

Decoupling Point

Location where inventory is held between supply chain stages

Inventory Risks

Damage, Loss, Theft, Perishability, Obsolescence, Market Variations

Reorder Point

Inventory level at which a company should place another order

Fixed Period

Orders placed on a regular schedule with varying quantites

Fixed Quantity

Same quantity ordered whenever inventory reaches a certain level

Single Period

One time purchase with no regular replenishment

Holding Costs

Costs of storing, protecting, handling, and insuring inventory

Ordering Costs

Costs of purchasing, recieving, counting, and replenishing inventory

Shortage Costs

Costs caused by not having enough inventory to meet demand

Stock Out / Re-Select

Product is unavailable now but may arrive shortly

Backorder

Order cannot be filled now but will ship when inventory arrives

Even Breaks

Adjusting quantities to practical amounts for counting and transportation

TI

Number of cases per layer on a pallet

HI

Number of layers per pallet

Weigh-Out

Maximizing available truck weight capacity

Cube-Out

Maximizing available truck space or volume

Safety Stock

Extra inventory kept to product against unexpected demand or delays

A Items

Highest value or most important inventory

B Items

Moderate value inventory

C Items

Lowest value inventory

RFID

Uses radio waves to identify and track products

Cycle Counting

Regularly counts physical inventory to ensure it matches the system

Inventory Security

Uses locks, cameras, fences, RFID gateways, and status levels to protect inventory