Purchase Process -

Vocabulary
&
Terminologies
Manufacturing Strategies (Del. Lead Time)
- ETO
- MTO
- ATO
- MTS
Boundary Spanners
Supply Chain Concept
- Concurrent design
- Mutual cost benefits
- Speed of information / EDI
Supply Chain Components
- Schematic representation
- Flows
Rise of Material Management / DPC / LM
2
Supply Chain Management An
Overview
MPC System
- 5 Levels (refer schematic diagram)
Level of detail vs planning horizon
3 questions at every level (priority, capacity and differences)
Production Plan (MPS)
- Chase Strategy
- Level Strategy
- Subcontracting
- Hybrid
- Contrast b/w MTS and MTO
Components of a MPC system
- Production Planning
Demand Planning (Forecasting)
Capacity planning
Material planning
- Implementation and Control
Production activity control (shop floor control)
- Inventory Management
Evolution from MRP II to ERP systems
3
Manufacturing Planning and Control
An Overview
4
PURCHASING
BUSINESS PLAN
SALES AND OPERATION PLAN
MARKETING PLAN PRODUCTION PLAN
MASTER PRODCUTION SCHEDULE
(MPS)
MATERIAL REQUIREMENTS PLAN(MRP)
PRODUCTION ACTIVITY CONTROL
PERFORMANCE MEASURES
(KPI KEY PERFORMANCE INDICATORS)
CONTINUOUS PROCESS
IMPROVEMENT
SALES PLAN
ROUGH CUT
CAPACITY PLAN
RESOURCES OK?
DETAILED
CAPACITY PLAN
RESOURCES OK?
No
Yes
No
Yes
MRP and Purchasing In Production
Activity Control
MRP
- Objectives
Requirements
Priorities current
- Inputs
MPS
Inventory record
BOM
Product tree
Parent - Component
Single level
Multi level / Indented
Multiple
Summarized / Simplified
Planning bill
Variation to BOM (where-used and pegging report)
Uses of BOM

Nature of Demand
- Independent (MPS)
- Dependant (MRP)
Vertical
Horizontal
5
Material Requirements Planning An
Overview
MRP Techniques
- Exploding and Offsetting
Lead time
An example BOM
Planned order (receipt and release)
- Gross and Net Requirements
Planned order release of parent = gross requirement of component
Add OHI to the example
- Releasing Orders
- Scheduled receipts
- Open Orders
- Add scheduled receipts to the example
- Basic MRP record
- Planning horizon, time bucket, action bucket
- Capacity Requirements Planning
- Low-level coding and Netting
- Procedure with an example BOM
- Extending for multiple BOM

6
Material Requirements Planning An
Overview
Using MRP
- Launch Orders
- Reschedule due dates
- Reconcile errors
- Solve material shortages
- Coordinate with other planners, schedulers, PAC and purchasing functions
- Planned orders, released orders, firm planned orders
- Exception and transaction messages
Managing MRP
Suppliers action through purchasing
Priority changes (expediting and de-expediting)
Management action (MPS)
Bottom-up replanning
System nervousness

7
Material Requirements Planning An
Overview
Order qualifiers
Order winners
Exploding
Offsetting
Netting
Low-level coding
Bill of Material
Planning Bill
Gross and Net Requirements
Projected available balance (PAB)
Planned Order Receipt
Planned Order Release
Scheduled Receipt
Open Orders
Planned Order




8
MRP And Purchasing Terminologies
Released Order
Firm Planned Order
Back Order
Backlog
MRP Record
Time Buckets
Planning Horizon
Action Bucket
Exception Messages
Transaction Messages
Need-By Dates (Due Dates)
Promised Dates
Exception Reports
Pull-in
Push-out
Cancel




9
The End