Differentiated Planning Flashcards
Describe the task of replenishing your refrigerator
Milk and bread = cycle planning (buy everytime we shop)
Pasta and eggs = reordering (buy when low)
Strawberries and champagne = manual / MTO (buy when needed)
What are the 7 viewpoints on planning?
One planning solution does not fit all!
Use the standardised method to optimise your planning
Always separate master planning and operational planning
Never use forecast-driven MRP for operational planning
Simplify planning of your predictable high-volume materials
Use consumption-based planning with requirements for your unpredictable materials
Simplify phase-in and phase-out planning
How can we address the issue of priotization?
Using product segmentation
Describe the segmentation model
Axeses:
- x = stability / predictability
- y = volume / impact
There are then six segments.
The model helps to identify which planning principles and which focus to apply to the products.
Products are clustered together and must be managed similarly
What are the benefits of segmentation?
Ability to apply standard policies and principles to all products within a segment
Focus on improving forecasting efforts to only segments where needed
Allow for segment-specific inventory policies
Common language across SC network and planning levels
How to determine a products stability?
Using CV
What to base predictability on?
Plan accuracy
Forecast accuracy
What to base impact on?
Volume
Cost, value, strategic importance, capacity utilization
Describe the forcast review principles for the “high-impact” segment
High impact on bottom line = high focus from planners
If predictability is high = statistical forecast is enough
If predictability is low = detailed review of forecasts
Describe the forcast review principles for the “high-focus” segment
High focus = much attention from planners
Frequent review of forecasts needed
Describe the forcast review principles for the “low-impact” segment
Low impact = less focus required
Review on quarterly or yearly level
What to do with high predictable products?
Cyclic planning with fixed production plan
Plan is changed if stock reaches limits
This will increase throughput
What to do with medium predictable products?
As forecasts are poor, one should use ROP
ROP = safety stock + demand during lead time
What to do with low predictable products?
Use MTO
What to do with high focus products?
case-by-case (typically ROP or MTO)
Describe the steps in the stepwise approach to improving planning
1) Stabilize and simplify
2) Increase predictability
3) Optimize flow and flexibility
Steps to stabalize and simplify
1) explicit stock point
2) align service level expectations and ensure safety stock
3) Simplify BOM
4) Replace forecast driven MRP with consumption based planning
5) Reduce lead time and order sizes
6) Reduce no. of stocked materials and lumpy materials
Steps to increase predictability
Separate tactical and operational planning
Differentiated planning and control e.g. cyclic planning
Reduce demand variability amplification
Increase predictability in processes
Reduce stock and time buffers
Reduce no. Of materials
Demand and supply integration
Use simple leading KPI’s
Steps to improve flow and flex
Reduce lead times and order sizes more
Rate based planning / synchronized external supply chain
Increase flexibility
Decoupling the external supply chain
High frequency deliveries with milk runs to customers
Standardized work
Supplying plant must control stock
Handle dependencies and risks
Partnership with key customers and suppliers
What are the effect to SC by using forecast-driven MRP?
Forecasts at SKU level are bad = plans derived from forecasts will be bad
MRP calculation changes totally with a single change to a parent item
Changes in forecast lead to Bullwhip
