Effective Planning for SCM Efficiency

Effective planning for SCM efficiency

It is generally acceptable to assume that with good forward planning, execution and control of operations will be much easier.

In the early 70’s, Dr. Joseph Orlicky developed the Theory of Dependant Demand, that led to the materials requirements planning (mrp) system. MRP has evolved over the years to Manufacturing Resource Planning (MRP II) in the 80’s. This holistic manufacturing planning and control system was extended into the process framework of supply chain management. The planning system has not changed very much in the push system environment, but the execution has been transformed into either a push or a pull system.

The push system that is schedule-driven is effective for the job shop and batch production manufacturing environments. However, when the manufacturing layout can be transformed from the process layout to the product layout or cellular manufacturing, then the mrp-centric push system become less suitable because the pull system methodology becomes more efficient.

However, in the job shop and batch production environment it is not so easy to implement the Kanban pull system. The mps-driven MRP II system is still the best fit, but can be made to execute more easily with the high performance master production schedule (mps). Without high mps performance, expediting and fire-fighting on a day to day become the norm rather the exception. In a stressed working environment, the quality of production may be compromised.

As a trade-off, some factories begin to load actual customers into the MRP system, resulting in nervousness in the workplace as well as excessive reactive mode of operations chasing for the parts that are in shortage. Using the MRP to generate the shortage report and have planners and buyers busy on the daily basis to chase for materials become a working culture though not a fruitful and conducive one. If some of the materials cannot be delivered on time, then production stoppages and delivery delays to the customers will happen. In order to mitigate the frequent material shortages and last minute expediting, factories begin to resort to consignment inventory in the name of VMI (Vendor Managed Inventory) agreement, to put pressure on the suppliers to ensure material availability even though there may not be accurate visibility of materials requirements across the planning horizon. The so called VMI arrangement is a glorified form of Vendor Owned Inventory or consignment, and not the truly VMI collaboration.

That means in practice it is possible to forego formal planning by having suppliers to be responsible for the availability of materials however bad the forecast has been. The suppliers may be living under immense pressure and stress trying to have the best guess for the customer’s materials requirements. The wild goose chase becomes a way of life.

For companies that have achieved the significant repeatable volume then it is possible to even change from the process layout to the product layout, and begin to implement just-in-time manufacturing or lean manufacturing. This transformation is possible if the volume of production for the product or product family is high and repeatable.

If the planning is effective, then there will be less material shortages and poor customer service due to late deliveries. The planning hierarchy starts from business planning, sales & operations planning, master planning and material planning. Each level of the priority planning is validated by resource or capacity planning to ensure feasibility. This structures level by level planning can be cumbersome but sometimes unavoidable. Ever imagine planning without taking into consideration of resource or capacity constraints.

E-business and supply chain management

E-Business and Supply Chain Management (SCM)

SCM without the E-business platform may not be effective in synchronizing, integrating or collaborating with the internal and external customers and suppliers.

The traditional ERP approach may entail the need for Enterprise Adaptor Integration, Middleware, datamart, data warehouse, groupware, business process management, and what have you. This approach is probably suitable for the large enterprises with big enough financial budgets to the IT CAPEX. The issues and challenges are as follows:
a) Top management support for a synchronized or integrated SCM
b) Obtain source data with high integrity in a timely manner
c) Willingness of the customers and suppliers in sharing the appropriate data
d) Willingness of the key users to support the openness and transparency of data and information
e) The availability or uptime of the SCM systems with many layers of IT interfaces working together
f) The ability to ensure effectively of the SCM systems
g) The ability to continuously improve the SCM processes to achieve the KPI goals
h) The IT-enabled capability of moving data, documents and information securely and smoothly across different ERP systems and databases

The various initiatives like EDI, RosettaNet, Coviscint, and others are important milestones in moving documents and orders from one party to another. More developments are needed to make sure the various document formats can be converted without user intervention.

As Internet, Intranet and Extranet become readily available, and multiple document and data formats can be inter-operable, e-business to support SCM.

To begin with the e-business approach to extended enterprise SCM, the SCM Network Conceptual Model must be developed first and foremost. With that reference conceptual framework and model, management can then work with the project team and key users to map the appropriate processes to support the business requirements.

The front-end business to business communication and interface will become a critical part of SCM. It does not really matter if customers and suppliers are using different ERP systems, as long as documents and data can be automatically converted from one format to another. This may involved some form of intermediate processing and the choice of solution may very much depend on the budget.

Maybe at the time of writing, there is no one systems solution provide that can be one-stop single source. The systems integration or synchronization must be able to inter-linked the various components of the SCM of the customers and suppliers.

Sometimes, a better approach is to do prototyping with one of those Rapid Application Development tools that have a library of business objects available for mix and match couple with some additional development.

The key to effectiveness may be to create the necessary paradigm shift in the business transformation to move towards simplification and standardization.

CPIM, Certified in production & Invenotry Management

Introduction

CPIM from APICS USA provides the comprehensive body of knowledge pertaining to manufacturing suppy chain management. CPIM professional certification is suitable for supply chain management consultants and practitioners who need to have the breath and depth of manufacturing SCM or ERP systems.


CPIM Course Descriptions

Basics of Supply Chain Management
This is an introductory course for production and inventory management personnel and CPIM candidates. This course provides basic definitions and concepts for planning and controlling the flow of materials into, through, and out of an organization. It explains fundamental relationships among the activities that occur in the supply chain from suppliers to customers. In addition, the course addresses types of manufacturing systems, forecasting, master planning, material requirements planning, capacity management, production activity control, purchasing, inventory management, distribution, quality management, and Just-in-Time manufacturing.

Master Planning of Resources
In this course, students explore processes used to: develop sales and operations plans; identify and assess internal and external demand and forecasting requirements; and effect an achievable master schedule consistent with business policies, objectives, and resource constraints. The course focuses on developing and validating a plan of supply, relating management of demand to the environment, and developing and validating the master schedule.

In addition, the course encompasses concepts for transforming sales, marketing, and business requirements into a feasible and economic operations plan in various business environments. It also addresses concepts and methodologies for managing projected and actual demands from distribution networks and external customers. Finally, the course presents methods for integrating sales and operations plans, demand forecasts, and customer demand into a specific master schedule.

Detailed Scheduling and Planning
This course focuses on material and capacity scheduling and planning. It includes a detailed explanation of material requirements planning (MRP), a technique suitable for use in job shops. The course also introduces another material planning technique, material-dominated scheduling, which is applicable to process industries and other mature production environments. The course explains capacity requirements planning in detail and introduces other capacity-planning techniques, including processor-dominated scheduling.

Execution and Control of Operations
This course focuses on three main areas: prioritizing and sequencing work; executing work plans, implementing controls, and reporting activity results; and evaluating and providing feedback on performance. The course explains techniques for scheduling and controlling production and process operations. It also addresses the execution of quality initiatives and continuous improvement plans as well as controlling and handling inventories. Finally, the course presents techniques for evaluating performance and collecting data for effective feedback.

Strategic Management of Resources
In this course, students explore the relationship of existing and emerging processes and technologies to manufacturing strategy and supply-chain-related functions. The course addresses three main topics: aligning resources with the strategic plan, configuring and integrating operating processes to support the strategic plan, and implementing change.

For maximum comprehension of course content, students should be familiar with the information and concepts presented in other CPIM modules before taking this course.


For more details, please email to info@mpics.org

CSCP, Certified Supply Chain Professional

CSCP, Certified Supply Chain Professional

If we were to look at the international trade and globalisation, we soon realize that the world is borderless through the power of Internet and wireless broadband communication. The speed in which information can be disseminated means that business of the future will become more and more competitive, and can be a competitive advantage. This couple with good customer service may provide the opportunity to become the preferred service provider, retailer, distributor, or producer. Having the right corporate strategies to sustain the niche market or traditional market segment, it is imperative to have an effective supply chain management in place.

There are many ways of developing human capital to enhance the supply chain strategies. The traditional approach is to hire people with a business degree or MBA, to ensure the academic foundation is available to support any innovative initiative for continuous process improvement. This has been a challenge when these graduates are from different universities and speaking different management language, resulting in possible miscommunication and difficulties in moving in tandem.

CSCP (Certified Supply Chain Professional) from APICS USA, provides the universal platform and common management language to support the inherent supply chain business processes that can be configured to support the enterprise systems requirements. CSCP helps to establish the conceptual framework for the extended enterprise supply chain management (SCM). With this APICS Body of Knowledge, it is a coherent platform to educate and train up management and senior executives for fine-tuning supply chain management or begin the journey of developing effective SCM.

CSCP is suitable for management, seasoned practitioners and consultants to get certified for the consolidated knowledge at the macro level of the extended enterprise SCM. This way it allows for the consistency in development the much needed Conceptual Framework in order to provide the basis for the management, project managers, consultants and key users to refine the model in order to establish the final systems requirements.

The benefits of education and training using the instructor-led classes and CSCP Learning System cannot be under-rated. The power of knowledge can be unleashed through learning process and classroom interactions.


For more information about CSCP, please send e-mail to info@mpics.org