Ch 03 - Supply Chain Planning

supply chain planning

element of supply chain management responsible for determining how best to satisfy the requirements created by the demand plan

supply chain planning process

a hierarchy of planning processes executed in sequence to produce the right product at the right time to satisfy customer demand

supply chain planning - long-range

involves planning for actions such as the construction of facilities and major equipment purchase

supply chain planning - intermediate range

shows the quantity and timing of end items

supply chain planning - short range

detailed planning process for components and parts to support the master production schedule

aggregate production plan (APP)

hierarchical planning process that translates annual business plans, marketing plans, and demand forecasts into a production plan for a product family in a plant or facility

sales and operations planning (S&OP)

a process to develop tactical plans that allows management to strategically direct the business to achieve a competitive advantage continuously by integrating customer-focused marketing plans for new and existing products with the management of the supply chain

master production scheduling (MPS)

represents what the company plans to produce, expressed in specific product configurations, quantities, and dates

level production strategy

maintains a constant production rate and allows inventory and backlog to vary according to fluctuating demand

chase production strategy

adjusts the production rate and capacity to match demand

hybrid production strategy

sets a baseline production rate based on a stable core workforce and then uses other short-term means, such as overtime, subcontracting, and part-time labor, to manage short-term fluctuations in demand

bill of materials

document that shows an inclusive listing of all raw materials, component parts, and assemblies making up the final product

single level bill of materials

display of components that are directly used in a parent item, together with the quantity required for each component (i.e., planning factor) - shows only the relationship one level down

multilevel bill of materials

display of all the components directly or indirectly used in a parent, together with the quantity required for each component (i.e., planning factor) - if a component is in subassembly, blend, intermediate, etc, all its components aand all their components will also be exhibited, down to purchased parts and raw materials

gross requirement

time-phased requirement before netting out on-hand inventory and lead time

net requirement

unsatisfied item requirement for a specific period - gross requirement for the period minus gross requirement, plus scheduled receipts, plus planned receipts from planned order releases

planned order release

specific order for a particular item and qty to be released to the shop or supplier

firmed planned order

planned order that can be frozen in qty and time so that the MRP computer logic cannot automatically change when conditions change - establish by the planner or supply chain manager to prevent system nervousness - can aid planners working with MRP systems in responding to material and capacity problems by firming up selected planning orders

scheduled receipt

committed order awaiting delivery for a specific period

lead time

time it takes to process and prepare material, produce the product, and transport it to the customer

time bucket

unit of time/period used in MRP

parent

item generating demand for lower-level components

planning factor

number/qty of each component or material needed to produce a single unit of the parent item

MRP explosion

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

pegging

relates the gross requirements for a component part to the planned order releases of the parent item to identify the sources(s) of the item’s gross requirements - active where-used info

lot size

order size for MRP logic

safety stock

qty 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 this

capacity

maximum amount of work an organization can complete in a given period

capacity planning

determines the production capacity needed by an organization to produce the g/s its customers require

resource requirement planning (RRP)

long-range capacity planning module used to check whether aggregate resources (i.e., labor and manpower) are capable of satisfying the aggregate production plan

rough-cut capacity planning (RCCP)

medium-range capacity planning module used to check the feasibility of the master production schedule - converts MPS from the production needed to the capacity required and then compares it to the capacity available

capacity requirement planning (CRP)

short-range capacity planning module used to check the feasibility of the material requirements plan

distribution requirements planning (DRP)

time-phased finished good inventory replenishment plan in a distribution network

enterprise requirement/resource planning (ERP)

an information system connecting an org’s functional areas and operations via a common software infrastructure and database

data management

provides the foundation for data analytics - collecting, storing, organizing, and securing data, ensuring that data is accurate, complete, and accessible

data analytics

process of analyzing, exploring, and transforming data to find patterns and trends that can provide insights and help decision-making - it can also help orgs and systems act based on automated analytics in real time

supply chain digital information

starts with aligning all processes and data on one platform, automating key processes, and using technologies such as artificial intelligence to collect and analyze massive amounts of data to identify, predict, and prevent problems