Supply chain mangagement (SCM) implementation methodology & best

2006 Trainers` Training
Introduction to Planning
Systems
• Manufacturing environments vary greatly.
• A planning methodology that works in one
environment may fail in another.
• Inadequate analysis often results in
inefficient planning.
• We will discuss various approaches to
planning.
2006 Trainers` Training
Characteristics of Some
Approaches
• Material Requirements Planning
• Manufacturing Resource Planning
– (MRP II) / Order Launch Schemes
• Constraint Based Management
– Theory of Constraints
– Synchronous Flow Management
2006 Trainers` Training
Material Requirements Planning
(MRP)
• Improvement
over
reorder
point
• Dependent
demand
concept
•BOM
explosions
•Netting
• Fixed lead times
• Planned orders/
Purchase req.
• Order launch
Demand Inventory
Item
Master
BOM
Explosion/
Netting
Planned
Orders
Purchase
Req.
Copyright ©1997 i2 Technologies
Open
Order
2006 Trainers` Training
Manufacturing Resource Planning
(MRP II) Order Launch
• Builds on data of “little MRP”
• Adds business strategy
integration
• Adds rough cut capacity check
• Adds resource capacity check
• Adds shop floor feedback
• Iterative process
Copyright ©1997 i2 Technologies
Master Planning
Rough Cut
Capacity
MRP
Capacity
Requirements Planning
Shop Floor Control
Business
Planning
Production
Planning
2006 Trainers` Training
Manufacturing Resource Planning
(MRP II) Order Launch Limitations
• Batch processing
• Uses planned lead times.
• Sequentially decomposes solution with long
planning cycles
• Lacks sensitivity to constraints
.
– Capacity constraints are accommodated iteratively with material
planning as a separate step.
– Requirements such as setups are improperly treated.
• Work is pushed through the shop, not pulled.
• Local optimization
2006 Trainers` Training
MRP II
Limitations for Planning
Master Planning
Rough Cut
Capacity
MRP
Capacity
Requirements Planning
Shop Floor Control
Business
Planning
Production
Planning
Copyright ©1997 i2 Technologies
• Schedule doesn’t account
for material and capacity
constraints
• Plan doesn’t incorporate
material shortages
• Schedule doesn’t account for
material and capacity
constraints
• No optimization of
bottlenecks
1
2
3
4
1
2
3
4
2006 Trainers` Training
Demand/Supply in ERP
Forecast
Management
MDS
MPS
MRP
Sales Orders
Procurement Plan
Execution
Work Order
Execution
Shipping
MDS Relief
CRP
RCCP
2006 Trainers` Training
Theory Of Constraints
• Postulated by Dr. Eliyahu Goldratt in
1970’s
• Described in the novel “The Goal”
• TOC is an different approach to the
continuous improvement process
• TOC has application to all industries
where there is a flow of information and/or
materials.
2006 Trainers` Training
TOC Fundamental Concepts
• Optimization of sub-system components does
not equal optimization of the total system.
• Standard accounting practices diverts attention
away from the real problems.
• A new set of operational performance
measurements is required.
• The goal of any company is to make money.
• A constraint is anything that limits you from
achieving the goal or desired result.
2006 Trainers` Training
TOC Improvement Process
•Step 1 IDENTIFY the system’s constraints
•Step 2 EXPLOIT the system constraint (I.e.
squeeze the most possible from the limits of the
current process)
•Step 3 SUBORDINATE everything else to Step
2 (I.e. try to synchronize flow, or do anything
else
•Step 4 ELEVATE the system constraint
• Step 5 If the constraint is BROKEN, go back to
step 1.

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