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Supply Chain > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

What is supply chain planning

A

the function responsible for determining how best to satisfy the requirements created by the demand plan

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2
Q

What is the objective of supply chain planning

A

To balance supply and demand in a way that realizes the financial and service objectives of the company

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3
Q

Long Range Supply Chain Planning

A

involves planning for actions such as the construction of facilities and major equipment purchase
- Aggregate Production Plan

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4
Q

Intermediate Range Supply Chain Planning

A

Shows the quantity and timing of end items (products) in 3-18 months
- Master Production Schedule

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5
Q

Short-Range Supply Chain Planning

A

detailed planning process for components and parts to support the master production schedule in 1-3 months
- Materials Requirement Planning

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6
Q

What does the Business Plan do

A

with its long term focus, provides the company’s direction and business goals for the next 1-5 years
- Normally stated in Financial terms and states objectives for profitability, revenue growth rate, gross margins and ROI
- Typically updated and re-evaluated annually usually during the annual planning and budgeting cycle
- Typically used as the starting point for developing Production or Aggregate Production Plan

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7
Q

What is included in the business plan

A

Executive summary, business description, market analysis, products and services, marketing plan, logistics and operations plan, financial plan

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8
Q

Aggregate Production Plan (APP)

A

Hierarchical planning process that translates business plans, marketing plans, and demand forecasts into a production plan for a product family in a plant or facility
- Planning horizon of APP is at least one year and is usually rolled forward by three months every quarter, includes costs relevant to aggregate planning

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9
Q

What is the purpose of the aggregate production plan

A

To establish production rates that will achieve managements objective of satisfying customer demand by maintaining, raising, or lowering inventories, while attempting to keep the workforce relatively stable

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10
Q

What are the goals of aggregate production planning

A

Meet demand, use capacity efficiently, meet inventory policy, minimize costs of labor, inventory, plant and equipment, subcontractors

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11
Q

What are the steps to develop the aggregate production plan

A
  1. Determine the demand for each period
  2. Determine the available capacity for each period
  3. Identify constraints
  4. Determine direct labor and material costs and indirect manufacturing costs for each product or product family covered by the APP
  5. Identify and develop strategies and contingency plans to manage the potential upside or downside in the market
  6. Agree on a plan that best meets the planning goals and objectives
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12
Q

APP Strategies Demand Adjustments include

A
  1. Influencing demand- advertising, promotions, pricing
  2. Backordering during high demand periods
  3. Counter-seasonal product mixing
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13
Q

APP Strategies Supply Adjustments

A
  1. Change inventory levels
    - increase inventories (build in advance of demand)
  2. Change capacity
    - vary production output through overtime or idle time
    - vary work force size by hiring/layoffs
    - using part-time workers
    - subcontracting
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14
Q

What is Sales & Operations Planning (S&OP)

A

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

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15
Q

Sales & Operations Planning brings together ______________

A

all the plans for the business into one integrated set of plans (sales plan, marketing plan, demand/supply plan, financial plan)

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16
Q

S&OP is typically performed ___________ and is reviewed by management at an _______________________, and it is the ___________________

A

once a month, aggregate (product family) level, definitive statement of the companys plans for the near-term to immediate term

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17
Q

If capacity and demand are nearly equal…..

A

emphasis should be placed on meeting demand as efficiently as possible

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18
Q

If capacity is greater than demand…..

A

the firm might choose promotion and advertising in order to increase demand or produce off-brand items

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19
Q

If capacity is less than demand…

A

the firm might consider subcontracting a portion of the workload to an outside 3rd party

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20
Q

Monthly S&OP Cycle is

A

Sales & Operations planning meeting -> week 1 -> Demand Management Meeting(s) -> week 2 -> Supply management meeting(s) -> week 3 -> Supply & Demand reconciliation meeting -> week 4

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21
Q

What is Master Production Scheduling (MPS)

A

represents what the company plans to produce expressed in specific product configurations, quantities, and dates
- the plan that drives the business
- a detailed disaggregation of the APP
- a set of planning numbers that provides the major input for material requirements planning

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22
Q

MPS is a statement of ____ and not a statement of ______

A

production, demand
- It represents what the business plans to achieve, not necessarily what the customer wants

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23
Q

What is Available-to-Promise

A

Represents the uncommitted portion of a company’s projected available inventory to support customer order promising (on hand + supply - ordered) per period

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24
Q

Time Fencing

A

Separating the planning horizon into a firmed time period and a planned time period

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25
Firmed Time Period
From the current date out several weeks into future - Established at the outer limit of this up-front immediate time period to signify the point when changes can no longer be made automatically by the planning system
26
Planned Time period
From the end of the Firmed Time Period to the end of the planning horizon
27
What is the Master Production Schedule
A production planning tool that outlines which products need to be manufactured, in which quantity, and when
28
Level Production Strategy
Maintains a constant production rate and allows inventory and backlog to vary according to fluctuating demand - works well for Make-to-Stock items
29
Chase Production Strategy
adjusts the production rate and capacity to exactly match demand - Used when the skill level, training required, or cost of hiring/terminating people is low - Works well for Make-to-Order items
30
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
31
Independent Demand example
Bicycle & Related spare parts (for repair)
32
Dependent Demand example
Frame (1), Seat (1), Handlebar (1), Wheels (2), Tires (2), Pedals (1) [Component Parts]
33
Material Requirements Planning (MRP)
A computer-based materials management tool that calculates the exact quantities, need dates, and planned order releases for all the component parts and materials required to manufacture a product
34
Bill of Materials
An inclusive list of all raw materials, component parts, and sub-assemblies making up the final product
35
Single Level Bill of Materials-
Display of components that are directly used in a parent item, together with the quantity required oof each component (ie the planning factor). Shows only the relationships one level down
36
Multilevel Bill of Materials
A display of all the components directly or indirectly used in a parent, together with the quantity required of each component (i.e. the planning factor). If a component is a subassembly, blend, intermediate, etc., all its components and all their components will be exhibited, down to purchased parts and raw materials
37
What is Capacity
The maximum amount of work (or output) that an organization is capable of completing in a given period
38
What is Capacity planning
the process of determining the amount of production capacity needed by an organization to produce the goods or service required by its customers
39
Major Capacity Planning tools
Resource Requirement Planning, Rough-Cut Capacity Planning, Capacity requirement Planning
40
Resource Requirement Planning
A long-range capacity planning module used to check whether aggregate resources (ie labor and manpower) are capable of satisfying the Aggregate Production Plan
41
Rough-Cut Capacity Planning (RCCP)
A medium-range capacity planning module used to check the feasibility of the Master Production Schedule. Coverts MPS from the production needed, to the capacity required, then compares it to the capacity available
42
Capacity Requirements Planning
A short range capacity planning module used to check the feasibility of the Material requirements plan
43
Distribution Requirements Planning
A time phased finished good inventory replenishment plan in a distribution network - process of determining how and where to deploy the finished goods inventory that is produced
44
45
Advanced Planning and scheduling
A manufacturing management process by which resources and capacity are optimally allocated to meet demand - uses advanced mathematical algorithms to perform optimization or simulation and consider a range of constraints
46
Enterprise Resource Planning Systems
information system connecting all the functional areas and operations of an organization via common software infrastructure and database, provides real time integrated management of the main business processes necessary to plan and control the organization
47
Types of ERP Implementation
1. Best-of-Breed: pick the best application for each individual function 2. Single Integrator Solution: pick all the desired applications from a single vendor
48
Gross Requirement
A time phased requirement prior to netting out (subtracting) on-hand inventory and lead-time
49
Net Requirement
the unsatisfied item requirement for a specific time period. Gross requirement for period minus current on-hand inventory
50
Projected Available Inventory
Projected closing inventory at the end of a period. Beginning inventory minus gross requirements, plus scheduled receipts plus planned receipts from planned order releases
51
Planned order release
a specific order for a specific item and quantity to be released to the shop or the supplier
52
Firmed Planned Order
a planned order that can be frozen in quantity and time so that MRP computer logic cannot automatically change when conditions change
53
Scheduled Receipt
a committed order awaiting delivery for a specific period
54
Lead Time
the time it takes to process and prepare material, produce the product, and transport it to the customer
55
Time Bucket
unit of time/time period used in mrp
56
Parent
item generating demand for lower-level components
57
Components
parts demanded by a parent
58
Planning Factor
the number/quantity of each component or material needed to produce a single unit of the parent item
59
MRP explosion
the process of converting a parent item's planned order releases into component gross requirements
60
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.
61
Lot Size
Order size for MRP Logic in generating planned orders
62
Safety stock
a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply
63
Where-used
a technique used to start with a lower-level material and identify all parents that require that material. typically used when there are shortages of lower-level components

Supply Chain (11 decks)

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