denise d. gillespie cpim, cirm
TRANSCRIPT
![Page 1: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/1.jpg)
Planning Planning During During
Dynamic Dynamic TimesTimes
The Denmark Group, Inc.
Denise D. Gillespie
CPIM, CIRM
![Page 2: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/2.jpg)
Here’s what we’ll talk about?
• Crash course on the “big picture” of planning
• Tools used in planning & for re-planning
• Future trends affecting today’s plans
![Page 3: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/3.jpg)
Why & What to Plan?
![Page 4: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/4.jpg)
What is the Alternative?• The alternative to planning is NOT planning• NOT planning means difficult to control• NOT planning means difficult to manage• Expediting is the opposite of planning
ASAP means: Absent Schedules Always Problems
![Page 5: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/5.jpg)
Organizations
Proactive companies MAKE things happen
Reactive companies LET things happen
![Page 6: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/6.jpg)
Now that we know we want to plan…
… what kind of plan?
![Page 7: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/7.jpg)
• Large Scale• Long Range• Major Purpose• What to do
Example:Become a World Leader in communications
Strategic Tactical• Limited Scale• Short Range• Action Oriented• How to do it
Example:Buy your major competitor to increase market share
Planning
![Page 8: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/8.jpg)
The Planning Hierarchy
STRATEGICPLANNING
SALES & OPSPLANNING
MASTERSCHEDULING
MATERIALS AND SERVICESPLANNING
REVIEW & REPLAN PLANNING OUTPUT
ANNUALLY
MONTHLY
WEEKLY
DAILY
SALESPROFITSROI
PRODUCTGROUPS
PRODUCTS,MODELS & OPTIONS
COMPONENTSAND WORKLOAD
![Page 9: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/9.jpg)
STRATEGICPLANNING
SALES & OPSPLANNING
MASTERSCHEDULING
MATERIAL AND CAPACITYPLANNING
REVIEW & RE-PLAN PLANNING HORIZON
ANNUALLY
MONTHLY
WEEKLY
DAILY
5-10 YEARS
18 -24 MONTHS
1 - 52 WEEKS
1 - 366 DAYS
The Planning Horizon
![Page 10: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/10.jpg)
SALESPLANNINGOPERATIONSPLANNING
OPERATIONSMANAGEMENTSUPPLIERMANAGEMENT
PERFORMANCEMEASUREMENT
MASTERSCHEDULING
BUSINESSPLANNING
MATERIALPLANNINGCAPACITYPLANNING
Resources OK?
Planning OK?
Performance OK?
CLOSED LOOPENTERPRISERESOURCE PLANNING
![Page 11: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/11.jpg)
Here’s what we’ll talk about?
• Crash course on the “big picture” of planning
• Tools used in planning & for re-planning
![Page 12: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/12.jpg)
Planning Tools – Slide 1
• Begin using the components of Enterprise Resource Planning (ERP)
• Manufacturing Strategy
![Page 13: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/13.jpg)
Make-to-Stock
Environment • Build to forecast • Rapid delivery• Standard products• High volumes• Low variety• Low profit margins per
unit
Business Impact• Finished goods are
stocked• Forecast error costs
money
![Page 14: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/14.jpg)
Make-to-StockFinished Goods
Raw Materials
Master Schedule
![Page 15: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/15.jpg)
Make-to-Order
Environment • More variety than
Make-to-Stock (MTS)• Some repeat products• Long lead times• Low volumes• High end item variety• Large profit margins
Business Impact• Forecasted revenue
only• Raw material is stocked
in anticipation of future sales
![Page 16: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/16.jpg)
Make-to-OrderFinished Goods
Raw Materials Master Schedule
![Page 17: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/17.jpg)
Assemble-to-Order
Environment• Fewer products than
MTO • Higher volume than
MTO• Some standard sub-
assemblies• Build to forecast at the
option level• Configured to customer
order • Planning Bills
Business Impact• Limited finished goods• Material is stocked at a
semi-finished stocking point
• Minimal configuration time
• Maximum product flexibility
![Page 18: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/18.jpg)
Assemble-to-OrderFinished Goods
Raw Materials
Master Schedule
Final Assembly Schedule (FAS)
![Page 19: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/19.jpg)
Engineer-to-Order
Environment• Custom designed
products• Unique bills of material • Unique item numbers• Very long lead times• Low volumes• High product variety
Business Impact• No finished goods • Low levels of raw
material• Revenue forecasts• Difficult to forecast • Estimating is very
important
![Page 20: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/20.jpg)
Planning Tools – continued
• Begin using the components of Enterprise Resource Planning (ERP)
• Manufacturing Strategy
• Use of Master SchedulingWhich level to schedule?
![Page 21: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/21.jpg)
Two Level Master Schedules
• In an assemble-to-order environment a two level Master Schedule is required.
• The first master schedule is set at the semi-finished goods level and these units are made to stock.
• The second master schedule is set at the final assembly level where the products are made to order.
![Page 22: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/22.jpg)
Planning Tools – continued
• Begin using the components of Enterprise Resource Planning (ERP)
• Manufacturing Strategy• Use of Master Scheduling
Which Level?• Production Scheduling Strategy
![Page 23: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/23.jpg)
Level Load Strategy
• Deliver products and services at a constant rate
• Avoid making changes to operations
• Store inventory or capacity
![Page 24: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/24.jpg)
Chase Strategy
• Produce only what you sell• Produce products or service just-in-time• If there are no sales - do not produce
![Page 25: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/25.jpg)
Hybrid Strategy
• A balance between level load and chase
• Could be a mixture of both approachesExample: a producer of ice cream has
two production levels, one shift per day during the slow season, two shifts per day during the busy season.
![Page 26: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/26.jpg)
Planning Tools – continued
• Begin using the components of Enterprise Resource Planning (ERP)
• Manufacturing Strategy• Use of Master Scheduling
Which Level?• Production Scheduling Strategy• Use of Product Configurator
Features & OptionsPlanning Families
![Page 27: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/27.jpg)
Product Configurators
A product configurator is a piece of software that prompts the customer to make choices which result in a specific product or service being developed to meet the needs specified.
![Page 28: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/28.jpg)
Product Features & Options• A distinctive characteristic of a
product or service. For example, in ordering a new car, the customer must specify an engine type and size (option), but need not necessarily select an air conditioner
• A choice or feature that must be made by the customer or company in customizing the end product.
In many companies, the term "option" means a mandatory choice from a limited selection.
![Page 29: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/29.jpg)
Example (Features & Options)
A hotel resort offers the customer a range of room options:– Smoking or Non Smoking– King, Two Doubles or One
Double Bed– Ocean View or Lagoon view– Meals included or not
![Page 30: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/30.jpg)
Planning Bills of Material
“An artificial grouping of items or events in bill-of-material format used to facilitate master scheduling and material planning.
APICS Dictionary 9th edition
![Page 31: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/31.jpg)
Planning Bills of Material(shows the historical relative popularity of each option)
Hotel Room
Smoking Preference
Bed Preference
View Preference
Meal PreferenceSmoking
Non-Smoking
King
Two Doubles
One Double
Ocean
Lagoon
Breakfast
No Meals
All Meals
20%
80%
40%
40%
20%
60%
40%35%
40%
25%
![Page 32: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/32.jpg)
Planning Tools – Slide 2
• Lead Times• Safety Stock• Time Fences
• Planning Fence• Demand Fence
• Time Zones
![Page 33: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/33.jpg)
Lead Time Definition
“A span of time required to perform a process (or series of operations).”
APICS Dictionary 9th edition
![Page 34: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/34.jpg)
Definition of Safety Stock“In general, a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply.”
APICS Dictionary 9th edition
Safety Stock is inventory that is kept “Just In Case”
![Page 35: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/35.jpg)
Demand Time Fence
“That point in time inside of which the forecast is no longer included in total demand and projected available inventory calculations; inside this point, only customer orders are considered.”
APICS Dictionary - 9th edition
![Page 36: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/36.jpg)
Planning Time Fence
“A point in time denoted in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost.”
APICS Dictionary - 9th edition
![Page 37: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/37.jpg)
Time Fences
Demand• Changes are
seldom permitted
• Usually set to cover the production and assembly time for a product
Planning• Changes can only be
made by the Master Scheduler
• Usually set to include the acquisition time for materials and components
![Page 38: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/38.jpg)
Frozen Firm Fluid Free
Customer Order ForecastBacklog
Urgent Trade Flexible NoOff Problem
Time Zones in the Master Schedule
Demand
Time
DTF PTF
![Page 39: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/39.jpg)
Planning Tools – Slide 2
• Lead Times• Safety Stock• Time Fences
• Planning Fence• Demand Fence
• Time Zones
![Page 40: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/40.jpg)
Here’s what we’ll talk about?
• Crash course on the “big picture” of planning
• Tools used in planning & for re-planning
• Future trends affecting today’s plans
![Page 41: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/41.jpg)
The Business World Today
• The increased intensity of competition
• The escalating demands of customers
• The onslaught of technology• The accelerating rate of change• The explosion of information• The avalanche of new issues• Business is global
![Page 42: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/42.jpg)
Challenging Business Problems
• Long lead times• Large numbers of items• Complex processes• Diverse product range• Multiple sites• Changing product mix
![Page 43: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/43.jpg)
Future trends• Organization• People• Technology• Societal Trends• Environmental
Issues• Regulatory Issues• Global Issues
![Page 44: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/44.jpg)
Tools for the future• Advanced Planning & Scheduling (APS)
Systems• Vendor Managed Inventories (VMI)• E-Commerce• Real-Time Order Entry• Direct Distribution of Products• Multi-plant Master Scheduling• Integrated/Optimized Supply Chains• Collaborative Planning, Forecasting, and
Replenishment (CPFR)
![Page 45: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/45.jpg)
Principles of Planning for the Future – Slide 1
• Customers are empowered and informed
• Quality and cost are order qualifiers• Service and speed are order winners• Customers demand quick response• Information management is essential
![Page 46: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/46.jpg)
Principles of Planning for the Future – Slide 2
• Integration of the entire supply chain is enabled by information communication
• Market intelligence is a competitive weapon
• Process flexibility is critical
• Electronic commerce is the way to communicate
• Planning systems must be capable of modeling complex supply chains and business processes
![Page 47: Denise D. Gillespie CPIM, CIRM](https://reader034.vdocuments.us/reader034/viewer/2022051804/6281ca809ea5987c276e0874/html5/thumbnails/47.jpg)
More Information
• Reprint Listing
• APICS - Fundamentals of Materials and Operations Management Course
• The Denmark Group, [email protected]