Capacity Planning

Capacity planning: determining the amount of capacity required to produce g/s in the future

  • Resource Requirement Planning: long range capacity planning module used to check whether aggregate resources are capable of satisfying the APP

  • Rough-cut capacity Planning: a medium range capacity planning module used to check the possibility or feasibility of the MPS. Converts MPS from the production needed to the capacity required, then compares it to capacity available.

  • Capacity Requirement Planning: A short range capacity planning module used to check the feasibility of the Material Requirements Plan

Distribution Requirements 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.

  • DRP is a logical extension of the MRP system and ties physical distribution to the manufacturing planning and control system

Key elements necessary for DRP: forecast demands by Distribution center, current inventory levels by distribution center, target safety stock by distribution center, recommended replenishment quantities, replenishment lead times (amount of time it takes to restock inventory once you place an order)

Enterprise Requirements Planning Systems: info system connecting all functional areas and operations of an organization, and in some cases suppliers and customers, via common software infrastructure and database

  • ERP provides a means for supply chain members to share info so that scarce resources can be fully utilized to meet demand, while minimizing supply chain inventories

Two types of ERP implementation:

  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 (disadvantages: lack of top management commitment, lack of adequate resources, lack of proper training, lack of communication, incompatible system environment)

Advantages of ERP systems: added visibility leads to reduced supply chain inventories, helps to standardize manufacturing processes, measure performance and communicate via a standardized method

Disadvantages of ERP systems: substantial time and capital investment, complexity, firms adapt processes to meet ERP system

Major ERP applications: accounting and finance, customer relationship management, human resource management, manufacturing, supplier relationship management, supply chain management

The 3 major ERP providers are: SAP, Oracle, Microsoft

Small software firms provide applications (e.g., Sage’s MAS 90) as well as full ERP solutions, but lack applistructure