(Chapter 1) Supply and Demand Alignment

Resource planning

The process of establishing, measuring, and adjusting limits or levels of long-range capacity.

Sales and operations planning

A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain.

Make-to-stock (MTS)

A production environment where products can be and usually are finished before receipt of a customer order.

Make-to-order (MTO)

A production environment where a good or service can be made after receipt of a customer’s order.

Master planning

A group of business processes that includes the following activities: demand management (which includes forecasting and order servicing); production and resource planning; and master scheduling (which includes the master schedule and the rough-cut capacity plan).

Backlog

All the customer orders received but not yet shipped. Sometimes referred to as open orders or the order board. See: order backlog, past due order.

Engineer-to-order (ETO)

Products whose customer specifications require unique engineering design, significant customization, or new purchased materials.

Level production method

A production planning method that maintains a stable production rate while varying inventory levels to meet demand.

Package to order

A production environment in which a good or service can be packaged after receipt of a customer order.

Quality

Conformance to requirements or fitness for use.

Product family

A group of products or services that pass through similar processing steps, have similar characteristics, and share common equipment prior to shipment or delivery to the customer.

Executive sales and operations planning (executive S&OP)

The portion of sales and operations planning that defines executive decision-making processes to balance supply and demand at the volume level in families, fully integrates financial planning and operational planning, and provides a forum for establishing and linking high-level strategic plans with day-to-day operations.

Chase production method

A production planning method that maintains a stable inventory level while varying production to meet demand.

Assemble-to-order (ATO)

A production environment where a good or service can be assembled after receipt of a customer’s order.