Basics Of Supply Chain Management - Vocabulary

Front 1

Priority

Back 1

What is needed, how many and when; Capacity is the capability to produce goods and services. In the long run, they must be in balance

Front 2

Material Requirements Plan (MRP)

Back 2

A plan for production and purchase of items in the master production schedule. Purchase and Production Activity control use the MRP for controlling raw materials.

Front 3

Production Activity Control and Purchasing

Back 3

represent the implementation of the plan. Purchasing obtains material per the MRP and production carries out the tasks in the MRP

Front 4

Sales and Operations Planning

Back 4

is derived from the Strategic Business Plan and is made up of a Marketing Plan that links to the Production Planand a Detailed Sales Plan that links to the master Production Schedule.

Front 5

Strategic Business Plan

Back 5

1) marketing determines product & pricing 2) Finance finds funds 3) Production meets needs through machinery & labor 4) Engineering is responsible for design. Reviewed every 6 months to a year

Front 6

Master Production Schedule (MPS)

Back 6

for production of individual items. The planning horizon is 3-18 months out. Master scheduling is the process of making an MPS. The plans are changed weekly or monthly

Front 7

Manufacturing Resource Planning (MRP II)

Back 7

is the fully integrated planning and control system. It coordinates between marketing and production. It includes the sales and operations plan, the sales plan, master schedule, material requirements plan, purchasing, production activity control and performance measures

Front 8

Level production

Back 8

(total forecast + back orders + ending inventory – opening inventory) / # of periods

Front 9

Resource bill

Back 9

shows the critical resources needed to make one average unit in the product group. This is used for resource planning. You need to determine the materials (# of units * # of material required) and labor (# of units * # of hours) needed to make the plan in standard hours

Front 10

Master production schedule (MPS)

Back 10

1) links production planning to what will be built 2) calculates capacity and resources needed 3) drives the materials requirements plan 4) drives priorities for manufacturing

Front 11

To build the master production schedule (MPS) you need the following information

Back 11

1. the production plan
2. forecasts for individual end items
3. actual orders received from customers and for stock replenishment
4. inventory levels for individual end items
5. capacity constraints

Front 12

Objectives of MPS

Back 12

1) maintain finished good inventory levels 2) make the best use of labor, materials & equipment 3) maintain inventory investment (WIP) at the required levels
• Develop a preliminary MPS, check MPS against capacity, resolve differences (this is called rough cut capacity planning)

Front 13

Rough cut capacity planning

Back 13

checks whether resources are available to support the preliminary master production schedule. Plan on a single product, not a group, and use the resource bill
• For make to stock, the MPS is a schedule of finished goods items, for make to order the MPS is a schedule of actual customer orders, for assemble to order, go to the base order

Front 14

Final Assembly Schedule (FAS)

Back 14

schedule of what will be produced

Front 15

Available to Promise (ATP)

Back 15

ATP = scheduled receipts + beginning inventory = actual orders scheduled

Front 16

Frozen Zone

Back 16

capacity and materials are committed to specific orders, senior mgmt approval required for changes

Front 17

Slushy Zone

Back 17

capacity and material are committed to less extent. Tradeoffs must be met between marketing and manufacturing

Front 18

Liquid Zone

Back 18

any changes can be made to the MPS

Front 19

Objectives of Materials Requirements Planning

Back 19

1) determine requirements 2) keep priorities current

Front 20

What does Material Requirements Planning (MRP) do?

Back 20

drives Production Activity Control (PAC) and purchasing. MRP plans the release and receipt dates for orders. PAC and purchasing must plan and control the performance of orders to meet the due dates

Front 21

Inputs to Material Requirements Planning System

Back 21

1) master production schedule 2) inventory records 3) bills of materials

Front 22

Bill of Material (BOM)

Back 22

“a listing of all the subassemblies, intermediaries, parts and raw materials that go into making the parent assembly showing the quantities of each required to make an assembly”

Front 23

Multilevel bills

Back 23

formed as logical groupings of parts into subassemblies, based on the way the product is assembled (i.e. an auto has a frame, chassis, doors, windows and engine as subassemblies)

Front 24

Where-used reports

Back 24

Where-used reports give the same information as a bill of material, but gives the parents for a component. Wheels might be used on several models of cars

Front 25

Pegging report

Back 25

like a where used report but only shows parents for which there is an existing requirement (rather than all parents, even those with no current production)

Front 26

Lead time

Back 26

the amount of time needed to perform an operation – it includes order preparation, queuing, processing, moving receiving and inspecting

Front 27

Exploding

Back 27

the process of multiplying the requirements by the usage quantity and recording the appropriate requirements throughout the product tree

Front 28

Offsetting

Back 28

the process of placing the exploded requirements in their proper periods based on lead time

Front 29

Releasing an order

Back 29

authorization is given to purchasing to buy the necessary material or to manufacturing to make the component (check component availability first)

Front 30

Low level code

Back 30

the lowest level on which a part resides in all bills of material. Determined by starting at the lowest level of a bill of material and working up to the par

Front 31

Capacity

Back 31

The amount of work that can be done in a specific time span.

Front 32

Capacity required

Back 32

the capacity of a system or resource needed to produce a desired output in a given time period

Front 33

Load

Back 33

the amount of released and planned work assigned to a facility for a particular time period

Front 34

Capacity management

Back 34

responsible for determining the capacity needed to achieve the priority plans. “The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules

Front 35

Capacity control

Back 35

the process of monitoring production output, comparing it with capacity plans, and taking corrective actions when needed

Front 36

Resource Planning

Back 36

involves long-range capacity resource requirements and is directly linked to production planning. If the resource plan cannot be devised to meet the production plan, then the production plan has to be changed

Front 37

Open order file

Back 37

a record of all the active shop orders

Front 38

Planned order releases

Back 38

determined by the computer’s MRP logic based upon the gross requirements for a particular part

Front 39

Routing

Back 39

the path that work follows from work center to work center as it is completed

Front 40

work center

Back 40

composed of a number of machines or workers capable of doing the same work

Front 41

work center file

Back 41

contains information on the capacity and move, wait and queue ties associated with the center

Front 42

move time

Back 42

the time taken to move material from one workstation to another

Front 43

wait time

Back 43

the time a job is at a work center after completion and before being moved

Front 44

queue time

Back 44

the time a job waits at a work center before being handled

Front 45

Lead time

Back 45

the sum of queue, setup, run, wait and move times.

Front 46

Demonstrated capacity

Back 46

figured from historical data (and is the average, not maximum output)

Front 47

Calculated or rated capacity

Back 47

based on available time, utilization, and efficiency

Front 48

Utilization

Back 48

hours actually worked / available hours * 100%

Front 49

Efficiency

Back 49

actual rate of production / standard rate of production * 100%

Front 50

Rated capacity

Back 50

available time * utilization * efficiency

Front 51

Load

Back 51

the sum of the required times for all the planned and actual orders to be run on the work center in a specified period.

Front 52

Calculation of load

Back 52

1) determine standard hours of operation time for each planned and released order for each work center by time period 2) add all the standard hours together

Front 53

Work center load report

Back 53

shows 1) over capacity 2) under capacity work centers

Front 54

Scheduling

Back 54

“timetable for planned occurrences”