Professional Documents
Culture Documents
Jul 2010
Supply Chain Planning
Supply Demand
1. Demand Planning
4. Logistics Planning
Demand Planning – strategic
aspects
Bullwhip
Demand Variability
Forecasting
Bullwhip
Demand Variability
Forecasting
Bull Whip
Reduce variability
Minimise promotions/ Pricing consistency
Strategic partnerships
Vendor managed inventory (VMI)
Data sharing
Demand Variability
Competition
Seasonality
External factors
Promotions
Bullwhip
Supply Chain Planning
Supply Demand
1. Demand Planning
4. Logistics Planning
Product Design Planning
Supply Demand
1. Demand Planning
4. Logistics Planning
Supply Chain Operations Planning Framework
Sales and operations Demand
planning management
Master production
scheduling
Detailed material
Planning (MRP)
Shop-floor Supplier
systems systems
Demand Management
Main interaction with
Strategic Planning
Includes
S&OP
Forecasting MPS
Order Management
CRM
Demand mgmt should address complete demand aspects incl. spare parts, service levels etc.
Forecasting
Forecasts & Plans
• What’s a Forecast?
• What’s a Plan?
Two Types of Demand
Independent demand
Dependent demand
for
•Strategic Planning
• S&OP
• MPS
Forecasting
Sales and operations Demand Forecast
planning management
Master production
scheduling
Detailed material
planning
Shop-floor Supplier
systems systems
Forecasting
Forecasting Techniques
Judgment
Market Research
Intrinsic (Time Series)
Extrinsic (Causal)
Other models
Judgment Methods
Sales-force Estimation
Delphi method
Market Research
Market Survey
Test Marketing
Focus groups assembled
Responses tested
Extrapolations made
Time Series (Intrinsic)
Moving Average
Weighted Moving Averages
Exponential Smoothing
Regression
Trend, Seasonality
(Decomposition)
Other Models
Holt’s
Box Jenkin’s
Time-Series Forecasting
Time Series Method
Moving Average
Weighted Moving Average
Exponential Smoothing
Pyramid Forecasts
Time-Series Forecasting
Exponential Smoothing
Examples include
Sales of other products
Inflation rates
GNP
Unemployment rates
Weather
Forecast Error
Forecast Error = D – F
A Forecasting Framework –
Aggregation
Time frame
Technique
Mgmt involvement
Master production
scheduling
DRP
Detailed material
planning
Logistics
&
Transportation
Shop-floor Supplier
systems systems
Master production
scheduling
Detailed material
Planning (MRP)
Shop-floor Supplier
systems systems
Supply Chain Operations Planning
- Traditional planning sequence
Sales Planning
Resource Planning Production Planning
Rough-cut Capacity
Master Scheduling
Planning
Capacity Planning MRP
Execution System
Sales Planning - to -
Operations Planning
Rough-cut Capacity
Master Scheduling
Planning
Capacity Planning MRP
Execution System
Supply Chain Operations Planning Framework
Sales and operations Demand
planning management
Master production
scheduling
Detailed material
Planning (MRP)
Shop-floor Supplier
systems systems
Master
Production
Schedule
Period 1 2 3 4
Forecast 20 70 70 20
Projected
Available 50 20 30 50
MPS 40 40 80 40
On Hand=30
Safety Stock=20
Batch = 40x
What should be planned in MPS
MTS scenario
End-items
• ATO scenario
Options or modules from which a variety of end
products could be assembled
Master production
scheduling
Detailed material
Planning (MRP)
Shop-floor Supplier
systems systems
BOM – Bill of Materials
X (3) Y(2)
X Z
Period 1 2 3 4 5 6
Gross Requirements 20 20 40 30 30 30
Scheduled Receipts 50
Period 1 2 3 4 5 6
Forecast 20 70 70 20
Projected Available
MPS 20 30 40 30 30 30
On Hand=30
Safety Stock=0
Batch = Any
Period 1 2 3 4 5 6
Gross Requirements 20 30 40 30 30 30
Scheduled Receipts
Master production
scheduling
Detailed material
Planning (MRP)
Shop-floor Supplier
systems systems
Shop-floor and Supplier
systems
PAC (Production Activity Control)
i. Shop Floor Scheduling & Control
ii. Vendor Scheduling & Control
Closed-loop feedback
• Forward scheduling
• Backward scheduling
Theory of
Constraints
Drum - Buffer – Rope Scheduling
ROPE
20
20
DRUM 18 16
15
10
A B C D E
B
BUFFER
Inventory
- all the money the system has invested in
purchasing things it intends to sell.
Operating expenses
- all the money that the system spends to turn
inventory into throughput.
Capacity
Requirement Detailed material
Planning (CRP) Planning (MRP)
PAC
Advanced Production
Scheduling (APS) or Shop-floor Supplier
Finite Loading, systems systems
Input/Output Analysis