© The Delos Partnership 2006 page 1 Supply Chain Techniques Choices to be made when deciding how to plan

© The Delos Partnership 2006 page 1

Supply Chain TechniquesSupply Chain Techniques

Choices to be made when deciding how to plan


Policy affects MPS ModelPolicy affects MPS Model

Design

Purchase

Intermediate Manufacture

Sub-assemble

Finish

Distribute

Cumulative Lead Time

End Item ModelPlanning

Bill of MaterialBill of Activity

Or Project


Make to StockMake to Stock

Design

Purchase


Sub-assemble

Finish

Distribute


Customer PlacesOrder here



Make to OrderMake to Order

Design

Purchase


Sub-assemble

Finish

Distribute





Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 25 25 25 25 25 25 25 25 20 20 20 20

Actual Demand

Proj Avail Balance

75 50 25 0 50 25 0 50 30 10 65 45

Available to Promise

CumulativeATP

Master Schedule

75 75 75

Item Level ForecastItem Level Forecast

Part Number: 12345 Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 75 On Hand: 100



Customer ProfileCustomer Profile

Customer X 50 per month

Customer Y 10 per month

Customer Z 5 per month

Customers A… 35 per month

Total = 100 per month

Forecast at End Item Level


End Item Level Forecast End Item Level Forecast

Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 25 25 25 25 25 25 25 25 20 20 20 20

Actual Demand

Proj Avail Balance

75 50 25 0 50 25 0 50 30 10 65 45


100 75 75 75

CumulativeATP

Master Schedule

75 75 75




Assemble to OrderAssemble to Order

Design

Purchase


Sub-assemble

Finish

Distribute





Cumulative Lead TimeCumulative Lead Time

Blue PenPart Number 12348


Pen BarrelPart Number 43768


Finished NibPart Number 76452


CapPart Number 89563


Semi finished NibPart Number 76532


InkPart Number 10675


Felt tipPart Number 10783


Lead Time = 5 weeks

Lead Time = 5 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 6 weeks

Lead Time = 6 weeks

Lead Time = 4 weeks

Lead Time = 4 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

CUM

LEADTIME

Lead Time = 1 weeks

Lead Time = 1 weeks


Customer Lead Time = 1 weekCustomer Lead Time = 1 week

BluePenPart Number 12345

BluePenPart Number 12345













Lead Time = 5 weeks

Lead Time = 5 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 6 weeks

Lead Time = 6 weeks

Lead Time = 8 weeks

Lead Time = 8 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

Lead Time = 1 weeks

CUM

LEADTIME

Lead Time = 1 weeks

Lead Time = 1 weeks

CustomerLeadTime


Product VariantsProduct Variants



Red PenPart Number 12345

Red PenPart Number 12345

Black PenPart Number 12347

Black PenPart Number 12347

Green PenPart Number 12348

Green PenPart Number 12348

Variant Forecast Actual

Blue 40 50

Red 60 70

Black 30 20

Green 70 60

Total 200 200

How manyNibs

And

How manyCaps and barrelsNeeded ?

How manyNibs

And

How manyCaps and barrelsNeeded ?


Planning FamilyPlanning Family

Blue OptionPart Number 12346


Red OptionPart Number 12345


Black OptionPart Number 12347


Green OptionPart Number 12348


Common Parts46783

Common Parts46783

Pen Family43785

Pen Family43785

20 % = 0.2

30 % = 0.3

15 % = 0.15

35 % = 0.35

Forecast = 200/mth

100 % = 1.0


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 0 20 40 50 50 50

Actual Demand 50 30 10

Proj Avail Balance

0 0 0 0 0 0 0 0 0 0 0 0


0 20 40 50 50 50

Master Schedule 50 50 50 50 50 50

Periods 1 2 3 4 5 6 7 8 9 10 11 12

DependentForecast

0 4 8 10 10 10


Proj Avail Balance


Master Schedule



20 %


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 0 20 40 50 50 50


Proj Avail Balance

0 0 0 0 0 0 0 0 0 0 0 0


0 20 40 50 50 50


Periods 1 2 3 4 5 6 7 8 9 10 11 12

DependentForecast

0 4 8 10 10 10


Proj Avail Balance

0


0 10 10 10

Master Schedule 11 10 10 10



20 %


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 0 20 40 50 50 50


Proj Avail Balance

0 0 0 0 0 0 0 0 0 0 0 0


0 20 40 50 50 50


Periods 1 2 3 4 5 6 7 8 9 10 11 12

DependentForecast

0 4 8 10 10 10


Proj Avail Balance

0 0 2 2 4 4 4 4 4 4 4 4


0 6 10 10 10 10




20 %

Overplan


Planning FamilyPlanning Family









Common Parts46783

Common Parts46783

Pen Family43785

Pen Family43785

20 % = 0.2

30 % = 0.3

15 % = 0.15

35 % = 0.35

Forecast = 200/mth

100 % = 1.0

I

N

V

E

N

S

T

M

E

N

T


Standard EOQ ScheduleStandard EOQ Schedule

1 2 3 4 5 6 7 8 9 10

A 30 30 30 20

B 10 30 30 10

C 20 30 10

D 20 10

E 20

Total 30 30 30 30 30 30 30 30 30 30


Order QuantityOrder Quantity

100 200 300 400 500 600

Set up cost per unit

£5.00 £ 2.50 £ 1.67 £ 1.25 £ 1.00 £ 0.83

Number of batches pa

12 6 4 3 2.4 2

Total Set up cost

£ 6,000 £ 3,000 £ 2,000 £ 1,500 £ 1,200 £ 1,000

Average Inventory £

50 100 150 200 250 300

Inventory Cost @ 20 %

£ 500 £ 1,000 £ 1,500 £ 2,000 £ 2,500 £ 3,000

Total Cost £ 6, 500 £ 4,000 £ 3,500 £ 3,500 £ 3,700 £ 4,000

Set up Cost per batch = £ 500 Annual Usage = 1,200Inventory Cost = 20 %Cost per unit = £ 50.00

“Minimum” OQ


Order QuantityOrder Quantity

100 200 300 400 500 600

Set up cost per unit

£5.00 £ 2.50 £ 1.67 £ 1.25 £ 1.00 £ 0.83

Number of batches pa

12 6 4 3 2.4 2

Total Set up cost

£ 6,000 £ 3,000 £ 2,000 £ 1,500 £ 1,200 £ 1,000

Average Inventory £

50 100 150 200 250 300

Inventory Cost @ 20 %

£ 500 £ 1,000 £ 1,500 £ 2,000 £ 2,500 £ 3,000

Total Cost £ 6, 500 £ 4,000 £ 3,500 £ 3,500 £ 3,700 £ 4,000

Set up Cost per batch = £ 0 Annual Usage = 1,200Inventory Cost = 20 %Cost per unit = £ 50.00

Min OQ


Mixed Model ScheduleMixed Model Schedule

1 2 3 4 5 6 7 8 9 10

A 14 14 14 14 14 14 14 14 14 14

B 8 8 8 8 8 8 8 8 8 8

C 5 5 5 5 5 5 5 5 5 5

D 2 2 2 2 2 2 2 2 2 2

E 1 1 1 1 1 1 1 1 1 1

Tot 30 30 30 30 30 30 30 30 30 30


End Item Level ForecastEnd Item Level Forecast

Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 14 14 14 14 14 14 14 14 14 14 14 14

Actual Demand

Proj Avail Balance

0 0 0 0 0 0 0 0 0 0 0 0


14 14 14 14 14 14 14 14 14 14 14 14

CumulativeATP

Master Schedule

14 14 14 14 14 14 14 14 14 14 14 14

Part Number: 12345 Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 1/1 On Hand: 0

Part Number: 12345 Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 1/1 On Hand: 0


Make to StockMake to Stock

Design

Purchase


Sub-assemble

Finish

Distribute





Global Supply Chain planningGlobal Supply Chain planning

• Same product in different geographical location

• Lead Time separates two locations

• Central management of inventory enabled


Global Supply Chain PlanningGlobal Supply Chain Planning

Bill of Distribution Same Product Code :Location code needed


Distribution Planning ProcessDistribution Planning Process

Receive ForecastReceive Forecast

Calculate PlanCalculate Plan

CaptureCaptureDataData

BALANCED PLANBALANCED PLANBALANCED PLANBALANCED PLAN

Hold Supply ReviewHold Supply Review

Transmit the planTransmit the plan

Receive Supply PlanReceive Supply Plan

Review Review actionaction

messagesmessages

Review Review actionaction

messagesmessages

ReviewReviewMessagesMessages


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 25 25 25 25 25 25 25 25 20 20 20 20

Warehouse Demand

Actual Demand

Proj Avail Balance


Master Schedule

150 150 150 150 150 150

Master Schedule UKMaster Schedule UKPart Number: 12345 Lead Time: 2 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 300Location : 001 UK


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 0 25 25 25 25 25 25 25 20 20 20 20

Warehouse Demand

100

150

50 150 100 50

Actual Demand

25

Proj Avail Balance

275 150 75 50 175 150 175 100 80 60 190 170


125 0 150 0 0

Master Schedule

150 150 150 150 150

Master Schedule - UKMaster Schedule - UKPart Number: 12345 Lead Time: 2 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 300Location : 001 UK


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 5 20 20 20 20 20 20 20 20 20 20 20

Actual Demand

15

Proj Avail Balance

60 40 20 100 80 60 40 20 100 80 60 40


65 100 100

Master Schedule

100 100

Planned Release

100 100

DRP - GermanyDRP - GermanyPart Number: 12345 Lead Time: 2 periods Safety Stock: 20 Min Ord Qty: 100 On Hand: 80Location : 002 Germany


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 20 40 40 40 40 40 40 40 40 40 40 40

Actual Demand

20

Proj Avail Balance

50 160 120 80 190 150 110 70 180 140 110 70


70 150 150 150

Master Schedule

150

*

150 150

Planned Release

150 150

DRP SpainDRP SpainPart Number: 12345 Lead Time: 3 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 90Location : 003 Spain

* In

Transit


Periods 1 2 3 4 5 6 7 8 9 10 11 12

Forecast 0 0 10 10 10 10 10 10 10 10 10 10

Actual Demand

20

Proj Avail Balance

50 50 40 30 20 60 50 40 30 20 60 50


50 50 50

Master Schedule

50 50

Planned Release

50 50

DRP ItalyDRP ItalyPart Number: 12345 Lead Time: 3 periods Safety Stock: 20 Min Ord Qty: 50 On Hand: 70Location : 004 Italy


Engineer or Design to OrderEngineer or Design to Order

Design

Purchase


Sub-assemble

Finish

Distribute





Project ManagementProject Management

Needs Management across all the projects

0

20

40

60

80

100

120

1st Qtr 2nd Qtr 3rd Qtr 4th QtrQtr

Capacity - Design Resource

Dem Cap

Req Cap


Bill of Activity – Link with PlanningBill of Activity – Link with Planning

ShipShip

PackPack

ProcessValidation

ProcessValidation

DevelopProcess

DevelopProcess

SourceMaterial

SourceMaterial

DevelopMaterials

DevelopMaterials

SourceEquipment

SourceEquipment

DesignLayout

DesignLayout

Lt = 2 weeksLt = 2 weeks

Lt = 6 weeksLt = 6 weeks Raw Material

Raw Material Lt = 4 weeksLt = 4 weeks




Master Scheduling OptionsMaster Scheduling Options

Summary Models can change depending on

Service level / Customer Lead TimeInventory Level in BOMSet up reduction activity

Requires careful review of planning models Determining where to meet customer is key

Documents

© The Delos Partnership 2006 page 1 Supply Chain Techniques Choices to be made when deciding how to plan