Planning and Control

Question 1

What are the activities of planning and control?

Answer 1

1. Scheduling - when to do things
2. Loading - how much to do
3. Sequencing - in what order to do things
4. Monitoring and control - are activities going to plan

Question 2

What is Sales and Operations planning (S&OP)?

Answer 2

A multidiscipline process, where all critical functions will agree on an action plan to fulfill the strategic goal(s) of the company

Question 3

What are the functions of S&OP?

Answer 3

• Sales & Marketing
• Production or Operations
• SC Management
• Planning
• Finance
• Human Resource
• Top Management

!Controlling Lead Time and Cost!

Question 4

What is Lead Time?

Answer 4

A span of time required to perform a process

Question 5

What is Cumulative Lead Time?

Answer 5

Longest planned length of time to accomplish the activity in question

Question 6

What is Delivery Lead Time?

Answer 6

The time from the receipt of a customer order to the delivery of the product (service)

Question 7

What gets planned?

Answer 7

1. Materials
   - inventory/stock
   - what you’re making and what you need to make it
2. Capacity
   - the means of production
   - people and machines
   - do I have the capacity to deliver these orders

Question 8

Good Planning & Control System

Answer 8

A good planning and control system needs to be clear, accurate and understandable.

Question 9

Questions of priority and capacity

Answer 9

What are we going to make?
What does it take to make it?
What do we already have?
What must we get and when?

Question 10

What is tactical capacity planning in S&OP?

Answer 10

Establishes overall production, workforce, and inventory levels

Question 11

What is Master Scheduling?

Answer 11

Determines when specific products will be made, when specific customer orders will be filled, and what products/capabilities are still available to meet new demand

Question 12

Material Requirements Planning (MRP)

Answer 12

Calculates the timing and quantities of material orders needed to support the master schedule

Question 13

Production Activity Control (PAC)

Answer 13

• Ensures that in-house manufacturing takes place according to plan
• Helps manufacturing managers identify potential problems and take corrective actions

Question 14

Vendor Order Management

Answer 14

• Ensures that materials ordered from supply chain partners are received when needed
• Helps purchasing managers identify potential problems and take corrective actions

Question 15

What are the 5 major supply chain drivers?

Answer 15

1. Production - what, how, and when to produce
2. Inventory - how much to make and how much to store
3. Transportation - how and when to move product
4. Location - where best to do what activity
5. Information- the basis for making these decisions

Question 16

Master Scheduling

Answer 16

A detailed planning process that tracks production output and matches this output to actual customer orders.

Question 17

What are the characteristics of Master Scheduling?

Answer 17

Makes specific the overall resource levels established by S&OP.
States exactly when and in what quantities specific products will be made.
Links production with specific customer orders, allowing the firm to tell the customer exactly when an order will be filled.
Informs the operations manager what inventory or resources are still available to meet new demand.

Question 18

What does the Master Schedule Record?

Answer 18

• Forecasted demand
• Booked orders
• Projected inventory levels
• Production quantities
• Units still available to meet customer needs (Available to Promise)

Question 19

What is Forecasted Demand?

Answer 19

A company’s best estimate of the demand in any period.

Question 20

What are booked orders?

Answer 20

Confirmed demand for products

Question 21

Master Production Schedule (MPS)

Answer 21

– The amount of product that will be finished and available for sale at the beginning of each week.
- Drives more detailed planning activities, such as Material Requirements Planning (MRP)

Question 22

What is the Planning Horizon?

Answer 22

– The amount of time the master schedule record or MRP record extends into the future.
- The longer the production and supplier lead times, the longer the planning horizon must be.

Question 23

Capacity Planning

Answer 23

• Good forecasts are essential for effective capacity planning
• A good understanding of demand uncertainty is also crucial because it allows you to judge the risks to service level.

Question 24

What is service level?

Answer 24

A term used to indicate the amount of demand to be met under conditions of demand and supply uncertainty

Question 25

What is supply uncertainty?

Answer 25

The risk of interruptions in the flow of components from upstream suppliers

Question 26

What is demand uncertainty?

Answer 26

The risk of significant and unpredictable fluctuations in downstream demand.

Question 27

What is a push system?

Answer 27

• A push-model supply chain is one where projected demand determines what enters the process
• You initiate production in anticipation of future demand

Question 28

What is a pull system?

Answer 28

• A pull strategy is related to the just-in-time school of inventory management that minimizes stock on hand, focusing on last-second deliveries
• Under this strategy products enter the supply chain when customer demand justifies it
• You initiate production as a reaction to current demand

Question 29

What is the bullwhip effect?

Answer 29

• A small disturbance in one place can lead to bigger effects

Question 30

How can you avoid the bullwhip effect?

Answer 30

You need integrated communication with suppliers and retailers