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InventoryRecord File-
On-Hand
Inventory
Record File-
On-Order
BOM
Record
File
Shop Floor Procurement
Material Planning Process
MPS
Requirements
Driven Initially fromThe S & OP Process
MRP Inputs and Outputs
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ABC STRATIFICATION
Inventory Stratification is the segmentation of items into layers bymonetary or usage values. These layers are known as A, B, C.
Occasionally in some businesses, there is a fourth layer, and it is
called D. Each layer has a specific formula for defining the
criteria.
A = 75 percent of the monetary value of inventory,
10 percent of the item numbers
B = 15 percent of the monetary value of inventory,10 percent of the item numbers
C = 10 percent of the monetary value of inventory,
80 percent of the item numbers
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As stated, some organizations also have a D category that
divides the C items into two groups. D items are usually
components that are very inexpensive (such as common
small washers, screws etc.,)
Most ERP business systems can automatically calculate the
inventory layers and give the user parameters that can be set
as desired.
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Topic MRP Lean
Inventory Strategy MTS(make-to-stock) MTO(make-to-order)
Inventory level High Low
WIP level Moderate to high One-piece lots
Rate To level load To customer demand
Production control Critical ratio cals Visible, kanban
Prod.Communication Shop work order Kanban pull
Lot size EOQ Customer order or one
piece
Lead time Long (queue) Short
Focus Next operation Customer requirement
Traditional Thinking : MRP Versus Lean
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Topic MRP/Lean Hybrid
Inventory strategy Appropriate inventory strategy with
customer draw
Inventory level Moderate to low
WIP level Low
Rate To customer demand
Production control Visible, kanban, MPS
Production
communication
Kanban pull
Lot size Customer order or one piece
Lead time Short
Focus Customer requirement
Modern Thinking : Hybrid MRP/Lean Model
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BUSINESS PLANNING
Strategic Planning
Financial Planning
Business Imperatives
Top-Management Business Planning
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Mission
Statement
Strategic Planning or
Vision and Objectives
Business Imperatives
Core Processes
The Elements in Business Planning
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Mission
Statement
Strategic Planning or
Vision and Objectives
Business Imperatives
Core Processes
Class A ERPDrivers
The Linkage Between Strategic andTactical Objectives
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TRICKS IN BUILDING THE RIGHT BUSINESS PLAN
TheBalanced Scorecard is one of the best and yet simple
approaches to business planning
Financial Internal business process
Learning and growth
Customer
Supply chain Technology
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Evaluation of
Internal Process
Opportunity
AlternativeApproaches
Core Value
to the
Business
Current Competitive Position
Expected Competitor Movement
Evaluation ofInternal Process
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Evaluation of
Learning and
Growth
Opportunities
Market Trends in Skill Requirements
TechnologyShiftsExistingSkill Set
Product Diversification
Evaluations ofLearning and Growth Opportunities
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Evaluation of
Customer
Changes
New Markets and Products
Services
Growth
Requirements
NewCustomers
Customer Relationship Management
Evaluation ofCustomer Changes
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Evaluation of
Supply Chain
Opportunities
Low-Cost Region Producers
Partnerships
Reverse
AuctionActivity
Acquisitions or Sales of Supply Lines
Evaluations ofSupply Chain Opportunities
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Technology
Opportunities
Application of New Proven Technology
Developing
NewTechnology
Tech. Movement
Affecting YourMarket
Acquisitions of Technology Sources
Technology Opportunities
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TALENT REVIEW
Having high-potential employees in
your department is essential in
creating a continuously improving
environment.
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Strategic planning three to five year horizon
Business imperatives Defined and communicated
Financial planning process (budget) both yearly
budget as well as a monthly, updated, twelve-month
rolling plan by product family to support the S & OP
process
Financial plan accuracy metric posted monthly
The business planning process sets the business up
properly.
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