LECTURE 2 - part 1 Flashcards
Sales and Operations Planning (S&OP) (definition)
A multidicipline process, where all critical functions will agree on an action plan to fulfill the strategic goals for the company
S&OP functions (7)
-main goal
- Sales & Marketing
- Production or Operations
- SC management
- Planning
- Finance
- HR
- Top management
- controlling lead time and costs
Lead time (definition)
a span of time required to perform a process
Cumulative lead time (definition)
longest planned lenght of time to accomplish the activity in question
Delivery lead time (definition)
The time from the receipt of a customer order to the delivery of the product or service
S&OP in action, 4 steps (picture)
- Sales forecast (account managers)
- Order forecast (operations manager)
- Supply schedule (based on production capacity)
- Order schedule (to suppliers)
What gets planned?
to satisfy customer demand and to ensure the availability of resoruces (2)
- Material (inventory/stock)
- Capacity (the means of production)
Questions of priority and capacity (4)
- What are we going to make?
- What does it take to make it?
- What do we already have?
- What must we get and when?
The five major supply chain drivers
- Production (what, how, and when to produce)
- Inventory (how much to make and how much to store)
- Location (where best to do what activity)
- Transportation (how and when to move products)
- Information (the basis for making these decisions)
Responsiveness vs. Efficiency
- responsiveness
- efficiency
- meaning
- focus on quick reaction
- focus on prevention
The right combination of both in each of the drivers allows a supply chain to ‘increase throughout without simultaneously reducing inventory and operating expense’
Disturbance
the interruption of a settled and peaceful condition
Master scheduling (definition)
Master scheduling is the detailed planning process that tracks manufacturing output and matches this against customer orders that have been places. The MS is the next step in planning after the S&OP
Master scheduling (4)
- Makes overall resource levels established by S&OP specific
- States when and in what quantities specific products will be made
- Links production to customer orders that allow the firm to tell customers when an order will be filled
- Informs operations manager what inventory or resources are still available to meet new demand
