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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

S e s s io n 1. The Bus ine s s P la nning Pro c e s s O bje c tiv e s : ・ Ide ntify a nd describe the e le me nts of Maste r Pla nning of Resources . ・ Ide ntify a nd describe the pa rts of the pla nning hie ra rchy. ・ Describe a nd distinguis h the pa rts in the pla nning process that product volume a nd product mix play. ・ Describe the e le me nts of bus iness pla nning. ・ Ide ntify a nd describe the inputs to a bus iness pla n. ・ Ide ntify a nd briefly describe seve ra l product de live ry strategies .

1. W ha t is the Ma s te r P la nn ing o f Re s o urc e . The Ma s te r P la nn ing o f Re s o u rc e : C la s s ific a tio n . 1. De ma nd Ma na ge me nt. ・ Fo re ca sting de ma nd . ・ ・ 2. Sa le s ・

The distribution pla n. The s e rvicing of custo me r o rde rs . a nd Ope rations Pla nning. The s a le s a nd ope rations pla n includ ing s a le s pla nning, o pe ra tio ns pla nning, inve nto ry, a nd ba cklog pla nning. ・ The re s ou rce pla n. 3. Ma ste r Sche duling. ・ The ma ste r p roduction s che dule . ・ The rough- cut ca pa city pla n. ・ The fina l a s s e mbly pla n.

Fig u re 1. Ma s te r P la nn ing o f Re s o u rc e Mo de l

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

De ma nd Ma na g e me nt. - Input : The a pprove d bus ine s s pla n. - Ele me nts ・ The fo re ca sting of s a le s fo r a ll p roducts a nd s e rvice s . ・ The pla nning of distributions . ・ The ma na ge me nt of a ctua l custo me r o rde r de ma nd . - Output : The a pp rove d s a le s a nd distributio n pla n a nd o rde r s e rvice po licie s .

Fig u re 2 . De ma nd Ma na g e me nt

S a le s a nd O pe ra tio n P la nn ing . - A fo rma l mo nthly proce s s fo r expre s s ing the bus ine s s goa ls of the o rga nizatio n in p roduct g ro up vo lume leve ls . - The prima ry o bje ctive s of S&O P. ・ To e sta blis h s upply rate s tha t will a chieve ma na ge me nt's ta rgets fo r proje cte d inve nto ry o r ba cklog leve l, with define d s upply constra ints . - The output of S&O P. ・ The s a le s pla n. ・ The ope ration (p roductio n) pla n. ・ Inve nto ry/ba cklog pla n.

Fig u re 3 . S a le s a nd O pe ra tio ns P la n .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

Ma s te r S c he d u ling . - The proce s s of ta king the a pprove d s a le s a nd o pe ra tions pla n fro m the product g roup leve l into a ma ste r s c he dule fo r the productio n o r a cquis ition of s pe cific products a nd s e rvice s to me et the sta te d p roduct g ro up vo lume . - The proce s s of ma ste r s che duling is ite rative in a s imulation mode . - Ro ugh- c ut ca pa c ity pla nning. ・ To te st a pre limina ry ma ste r s che dule a ga inst the constra ints of c ritica l re s ource s . ・ If ove rloa de d, the ma ste r s che duling is revis e d a nd rete ste d us ing rough- cut ca pa city pla nning. - The fina l a s s e mbly s c he dule . ・ A s ubs et of the MPS re pre s e nting the way in whic h p roducts will be finis he d to c usto me r re quire me nts .

Fig u re 4 . Ma s te r S c he d u ling .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

2 . The P la nn ing P ro c e s s : Co ns ide rat io ns . The Ba la nc ing o f S upp ly a nd De ma nd . - The pla nning p roce s s involve s a ba la ncing a ct be twe e n de ma nd a nd s upply. - The de ma nd s ide of ba la nce . ・ Sa le s fo re ca sts : pre d ictions of the leve l of future s a le s a ctivity. ・ Actua l o rde rs : Re ce ive d they a re matche d the fo re ca st. - The s upply s ide of ba la nce . ・ P rod uction o rde rs : c re a te d to a utho rize the ma nufa cture of p roducts a cco rding to the a pprove d pla n. ・ Purcha s e o rde rs : is s ue d to s upplie s a s a utho rity to de live r products o r s e rvice s in a cco rda nce with the a pp rove d pla ns . - Some cha lle nge s . ・ Sa le s fo re ca sts e rro rs . ・ C usto me rs cha nge o rde rs . ・ P rod uction a nd s upplie rs nume rous pro ble ms on a da ily ba s is .

Fig u re 5 . The Ba la nc ing Ac t.

P ro d uc t Vo lume a nd P ro d uc t Mix . - P roduct Volume . ・ The leve l of p roduct vo lume e sta blis he s the big picture of de ma nd pla ce d on a s upply o pe ra tion. ・ It is typica lly expre s s e d in rate s of de ma nd at the p roduct g ro up leve l. ・ It is pla nne d by Sa le s a nd Ope rations Pla nning. - P roduct Mix. ・ A me a s ure of the diffe re nt type s of prod uct that ca n be g ro upe d within a pa rticula r p roduct g ro up. ・ Mix va riatio n is typica lly a proble m fo r s upply ope rations that have inflexible proce s s . ・ P rod uct mix dete rmine s the s pe cific a mo unts of e a ch type s to be p roduce d. ・ Setup re duction prog ra ms a nd the a do ption of s ma ll wo rk ce lls have e na ble d s ome s upplie rs to re s po nd to va riatio n in prod uct mix with re lative e a s e . - 4 -

S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

The P la nn ing Hie ra rc hy . - The pla nning hie ra rchy sta rts with a n o rga nizatio n defining the strate gic d ire ction. 1. A define d vis ion state me nts . 2. A mis s ion state me nt. 3. A Va lue state me nt. 4. Ana lys is of o rga niza tio na l stre ngths a nd we a kne s s e s . 5. Ide ntifie d o ppo rtunitie s , pe rce ive d o rga niza tiona l thre a ts . - The stra te gic pla n s ets the ove ra ll dire ctio n fo r o rga nization. - The stra te gic pla n is expre s s e d in te rms of s pe cific goa ls a nd ta rgets in the bus ine s s . - The s e goa ls te nd to be broa dly define d a nd ma inly fina nc ia l in nature .

Fig u re 6 . The P la nn ing Hie ra rc hy .

The P la nn ing Ho riz o n . - The a mount of time a pla n exte nds "into the pla n." - The long- ra nge strate gic pla n : The ho rizo n is us ua lly s et at le a st five ye a rs . - The s a le & ope rations pla n : The ho rizo n is us ua lly to cove r the next two ye a rs . - The a nnua l budget a nd fina ncia l pla n : The ho rizon is us ua lly set to cove r a s pecific fisca l ye a r. - The ma ste r s che duling : The ho rizo n is no rma lly s et to cove r the minimum of cumulative le a d- time plus time fo r lot s izing low- le ve l compo ne nts a nd fo r ca pa city c ha nge s of prima ry wo rk ce nte rs o r of ke y s upplie rs .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

3 . The Bus ine s s P la n . De fin itio ns - A state me nt of long ra nge strate gy a nd reve nue , cost, a nd profit obje ctive s us ua lly a cco mplis he d by budgets , a proje cte d ba la nce s he et, a nd a ca s h flow state me nt. - A bus ine s s pla n is us ua lly sta te d in te rms of do lla rs a nd g ro upe d by product fa mily. Co m mo n Fe a tu re s o f the Bus ine s s p la n . - The bus ine s s pla n s ets the ove ra ll a ctivitie s fo r the bus ine s s a nd a dd re s s e s s pe cific is s ue s a nd conce rns tha t typica lly re la te d to : 1. The nature of the firm. 2. The locatio ns a nd fa cilitie s of the e nte rpris e . 3. The type of o rga nization a nd the s kills of the pe o ple re quire d. 4. Leve ls of proce s s ing te chnology. 5. The type s a nd nature of ca pita l re s o urce s re quire d. 6. The inte re sts of prima ry sta ke ho lde rs . The ma rke t a nd the Bus ine s s Env iro nme nt. - The ma rket definitio n s ho uld inc lude : ・ The location of custo me rs a nd the na ture of the ir re lations hip with the s upplying o rga nization. ・ Info rmation a bo ut proje cte d ma rke t g rowth. ・ De mog ra phic info rma tion a bo ut future custo me rs . ・ Impa ct of s ocia l cha nge s including cha nging ne e ds of custo me rs . ・ Globa l a nd re gio na l e cono mic cons ide rations a nd bus ine s s cond itions . - The bus ine s s e nviro nme nt definitio n s hould be include : ・ Info rmation a bo ut curre nt a nd futu re pote ntia l competito rs . ・ P roje ctions of bus ine s s g rowth. ・ Info rmation o n the ava ila bility of fina ncia l re s ou rce s . ・ Info rmation o n pote ntia l a nd e me rging te c hnologie s . Ke y Go a ls fo r Bus ine s s Pe rfo rma nc e . - Some of the me a s ure s of bus ine s s pe rfo rma nce that a re like ly to be define d a s key goa ls . ・ P roje cte d bus ine s s g rowth. ・ Ta rgete d profita bility. ・ Anticipa te d re turn o n inve stme nt. ・ De s ire d ma rke t s ha re . ・ A sta te me nt of a nticipate d s ha re ho lde r va lue . ・ C usto me r s e rvice . ・ Re putation. ・ Compa ny va lue .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

Bus ine s s S ta ke ho ld e rs . - All thos e g roups affe cte d by the ope rations of the o rga nizatio n. ・ A community. ・ The ma na ge me nt te a m. ・ The bus ine s s owne rs a nd s ha re ho lde rs . ・ The me mbe rs of a n a s s ociation. ・ The wo rke rs . ・ The custome rs a nd the s upplie r of the o rga nizatio n. - Ea ch g roup re ga rd the o rga nization diffe re ntly. - Ea ch of the bus ine s s sta ke ho lde r g ro ups must be cons ide re d in the deve lo pme nt of a bus ine s s pla n. Be nc hma rking . - One of the vita l ing re die nts of the bus ine s s pla nning p roce s s is the co lle ctio n a nd / o r compa ris on of be nchma rking data from co mpetito rs a nd othe r o rga niza tio n. - Be nchma rking is the proce s s of co mpa ring ma ny a s pe cts of ope ratio na l pe rfo rma nce with pe rfo rma nce of othe r o rga nizations . ・ Strate gie s . ・ Ca pa bilitie s . ・ P roce s s e s . ・ Costs . ・ Logistics . ・ Syste ms - The re comme nde d wa y to do be nchma rking is by compa ring a n o rga nizatio n's pe rfo rma nce with othe rs that have cle a rly de mo nstrate d tha t they a re the "bets in cla s s ." ・ Ho nda fo r s ma ll e ngine de s ign. ・ Fe de ra l Expre s s fo r custo me r s e rvice . ・ Wa lMa rt fo r info rmatio n te chno logy. ・ No kia fo r product de s ign. Bus ine s s P la n S tra te g ic Da ta S o u rc e s . - The majo r a re a s of input into the bus ine s s pla n. ・ Environme nta l s ca n. : De mog ra phics . : Like ly cha nge s in re gula tio n. : Ma rket g rowth pote ntia l. : Ge ne ra l e cono mic conditio ns . : Cu rre nt ma rket playe rs . : Pote ntia l co mpetito rs . : Cu rre nt custo me r p refe re nce s a nd s a tisfa ction leve ls .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

・ Compa ny ca pa bilitie s . : The s kill of wo rkfo rce . : The co re co mpete ncie s of the o rga nizatio n. : The ava ila ble re s o urce s . : The a pplicatio n of info rmation te chno logy fo r competitive a dva nta ge . ・ Fina ncia l ta rge t. : P roje cte d e a rning leve l. : Bus ine s s g rowth. : Ma rket pe netration. : Ca s h flow ge ne ratio n. : Return on inve stme nt. : P roduct vo lume ta rgets . ・ Strate gic goa ls . : De s ire d leve ls of custo me r s e rvice . : Pla nne d q ua lity imp rove me nts . : Cost re duction goa ls . : Le a d- time re ductio n. : P roductivity improve me nt.

4 . P ro d uc t Life Cyc le . Impo rta nc e a nd Fo u r pha s e s o f P LC . - The cons ide ration of p roduct life cycle is impo rta nt from the sta ndpo int that diffe ring s upply strate gie s a re re quire d de pe nd ing on whe re a p roduct is in its life cycle . - Fo re pha s e s of P LC. ・ The introductio n pha s e . ・ The g rowth pha s e . ・ The ma tu rity pha s e . ・ The de cline pha s e . - The s lop a nd duratio n of e a ch pha s e will be diffe re nt fro m p roduct to product, from industry to industry, a nd eve n fro m ge og ra phic location to ge og ra phic location. - Outs ide fa cto rs affe cting the le ngth of e a c h sta ge . ・ Public a cce pta nce . ・ Soc ia l a nd e cono mic conditio ns . ・ Ra te of de ve lopme nt of co mpa ring te chnica l products . ・ Ra te of innovatio n.

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

Fig u re 7 . P ro d uc t Life Cy c le

- Activitie s . ・ The introductio n pha s e . : Co mpone nts , pa rts , a nd p roduct e le me nts a re a s s e mble d. : P rototype s a re de ve lope d fo r the ma rketpla ce o r s pe cific custo me r. : A numbe r of e ngine e ring cha nge s may be re quire d. : Ma rketing ha s a la rge ro le in this pha s e in ide ntifying s pe c ific custome r re quire me nts a nd p roviding input to the de s ign a nd initia l ma nufa ctu ring. ・ The g rowth pha s e . : De ma nd fo r the product o r s e rvice inc re a s e s . : A mo re fle xible ma nufa cturing/s e rvice e nvironme nt is re quire d to ha ndle expa nding ma rke ts . ・ The ma tu rity pha s e . : This is no rma lly whe n a co mpa ny e njoys the maximum return o n inve stme nt fro m a product. : De ma nd a nd s upply rate s a re highe st, the product is sta ble , a nd high volume s refle ct ste a dy reve nue stre a ms . ・ The de cline pha s e . : Re quire me nts fo r this product o r s e rvice will diminis h o r ce a s e . : A compa ny will find its e lf fulfilling only re pla ce me nt pa rts re quire me nts .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

5 . P ro d uc t De liv e ry S tra te g ie s . S t ra te g ie s to Me e t C us to me r De ma nd . - The re a re s eve ra l stra te gie s tha t o rga niza tions ca n us e fo r the s upply of p roducts a nd s e rvice to c usto me rs . - They a re d istinguis he d by the po int at which the custo me r o rde r e nte rs the s upply proce s s a nd include : ・ Engine e r- to- o rde r. ・ Ma ke - to- o rde r. ・ As s e mble - to- o rde r. ・ Ma ke - to- stock. ・ Ma s s custo mization. ・ P roce s s industry. ・ Se rvice industry. ・ Distributio n industry. ・ Multiple e nvironme nts with the s a me fa cility.

Fig u re 8 . P ro d uc t De liv e ry S t ra te g ie s

S upp ly P ro c e s s a nd P ro d uc t De liv e ry S tra te g y . - P roduct de live ry strate gy. ・ MTS : A co mpa ny s hip finis he d units fro m finis he d goods stock. ・ ATO : A compa ny a s s e mble majo r stocke d a s s e mblie s into finis he d prod ucts a nd s hip upon re ce ipt of a custome r o rde r. ・ MTO : A firm o rde r be re ce ive d fro m the custome r befo re a ny a utho rizatio n to a cquire o r produce the product is ma de . ・ ETO : A s upplie r wo rk with a custo me r du ring the de s ign pha s e of new p roduct deve lo pme nt, pa rticipating in the joint deve lo pme nt of a s pe cia l product.

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

S e rv ic e De liv e ry S tra te g ie s . - Engine e r- to- O rde r. ・ ETO stra te gy a ccommodate s product whos e c usto me r s pe cifica tions re quire a unique e ngine e ring de s ign, s ignifica nt customiza tion, o r new purcha s ing ma te ria ls . ・ Each custome r orde r res ults in a unique set of pa rt numbe rs , bills of mate ria l, a nd routings . ・ ETO strategy requires that product a nd se rvice des ign does not become until a contra ct or a n orde r has a rrived. ・ ETO typica lly e mploy a proje ct s upply proce s s . ・ Definitio n of proje ct : An e nde avo r with a s pe cific obje ctive to be met within the p re s c ribe d time a nd dolla r limitations a nd tha t ha s be e n a s s igne d fo r definitio n o r exe cutio n. ・ An exa mple : A s pe cific type of s pa ce p robe o n the pla net J upite r. - Ma ke - to- O rde r. ・ Ite ms a re p roduce d a s custo me r o rde rs a re re ce ive d. ・ Finis he d ite ms a re us ua lly a combination of sta nda rd pa rts a nd custom- de s igned pie ces . Acce s s o rie s a re s o me time s stocke d in a ntic ipatio n of custome r o rde rs . ・ Compa ny goa ls include the ba c klog leve ls a nd de s ire d custo me r s e rvice leve l. ・ MTO p roducts typica lly e mploy batch proce s s fo r productio n of a s pe cific lot- s ize qua ntity of units . Thes e units may be produce d in a disc rete o r inte rmitte nt batch proce ss . - As s e mble - to- O rde r. ・ ATO produce p roducts that a re custo m built o r that have virtua lly limitle s s numbe r of configuratio ns , a ll of which a re ma de with a co mbina tion of ba s ic compo ne nts o r s uba s s e mblie s . ・ S uba s s e mblie s , co mpone nts a nd a cce s s a rie s a re ofte n stocke d in a nticipation of fo re ca ste d o rde rs . ・ Ofte n, ATO ma nufa cturing time s a re lo nge r tha n the de live ry re q uire me nts a llow, s o s uba s s e mbly p roductio n be gins in a nticipation of fo re ca ste d o rde rs . ・ Compa nies that e mploy the ATO ma nufacturing strategy include Automobile ma nufa cturing compa nies like Toyota , Fo rd, a nd Da imle r Chrys le r. ・ An inte rmitte nt ba tc h is p roce s s e d. - Ma ke - to- Stock. ・ This fo rm of p roduction is co mmonly us e d fo r high- vo lume sta nda rd products . ・ The compa ny produce s ite ms in batche s a nd inve nto rie s stock fo r most o r a ll ite ms p roduce d befo re re ce iving custome r o rde rs . ・ MTS goa ls a re ta rgete d to finis he d goods inve nto ry leve ls a nd de s ire d custo me r s e rvice leve ls . ・ Ite ms a re ofte n co ns ume r goods a nd s o me high- vo lume industria l s upply goods . ・ MTS prod uct de live ry stra te gy re quire s a flow proce s s fo r productions . ・ This is a n a s s e mbly line o r a high- vo lume re petitive o pe ratio n. ・ Food ma nufa cture rs , ove r- the - counte r pha rma ce utica l ma nufa cture rs , a nd light bulb s upplie rs .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

- Ma s s Customiza tion. ・ C ha ra cte ristics . : High- volume p roduct. : La rge va riety. : Custo m may s pe cify his o r he r exa ct mode l o ut of a la rge volume . : Ma nufa cturing cost is low be ca us e of the la rge volume . ・ Exa mple : De ll o r Gatewa ry compute r a s s e mble r. - P roce s s Industry. ・ The ma nufa cturing ope ratio n is pe rfo rme d us ing a ba tch o r continuo us proce s s to p roduce products . ・ Exa mple s of proce s s industry include the ma nufa cture r of liquids , che mica ls , a nd ga s e ous p roducts . ・ The ba s ic na ture of p roce s s ma nufa ctu ring is tha t a pa rticula r ra w ma te ria l ca n be c ha nge d by a che mica l p roce s s s uc h a s mixing, ble nding, ste rilizing, fe rme nting, coo king, ba king, o r co mbining. ・ P roce s s industrie s ca n e mploy a ny product de live ry strate gy, de pe nd ing on whe re they fit in the p roduct/p roce s s mix. - Se rvice De live ry Stra te gie s . ・ Se rvice industry is one in which the p roduct is de live re d dire ct to the custome r without the pos s ibility of be ing sto re d in a dva nce . ・ Se rvice ca n be de live re d in one of two wa ys . : Sta nda rd s e rvice s a re thos e that a re provide d in the s a me way to a ll custo me rs . : Custo mize d s e rvice s a re provide d uniq ue ly fo r e a ch custome r. ・ Exa mple of s ome s e rvice p rovide d to custome r a re : A food ba nk co lle cts food fro m do no rs a nd d istribute s food to the ne e dy. : A ministe r provide s a c hurch s e rvice fo r the co ng re gation. : A s u rge on pe rfo rms a he a rt bypa s s p roce dure . : A ticket a ge nt provide s a vo uche r fo r a irline tra ve l. : A ba nk p rovide s s a fe ty de pos it boxe s fo r custome rs . : An inve stme nt broke r provide s fina ncia l pla nning a dvice to a n inve sto r. : A s e curity gua rd provide s prote ctio n fo r compa ny a s s e ts . : An Inte rnet s e rvice provide r provide s a s e a rch e ngine fo r a brows e r. - Distributio n Industry. ・ A distributo r. : A bus ine s s tha t doe s not ma nufa cture its own products , but purc ha s e s a nd re s e lls the s e prod ucts . : The s e include a ge nts , broke rs , re ta ile rs , who le s a le rs , a nd a ny othe r kind of de a le r betwe e n the p roduct o r s e rvice provide r a nd the co ns ume r. : A method of d istribution : Ta ke - from- stock. - 12 -

S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

- Ma nufa cturing Enviro nme nts . ・ The re a re ma ny exa mple s of co mpa nie s that have multiple e nvironme nts within the s a me fa c ility. ・ A typica l exa mple wo uld be a ma nufa cture r of p rinte d circuit boa rds . ・ The product de live ry stra te gy may va ry ove r the product life cycle of a pa rticula r p roduct. : During the introduction sta ge - ETO. : During the g rowth sta ge - MTO o r ATO. : During the maturity sta ge - ATO o r MTS . : During the de cline sta ge - a ga in MTO Ma nufa c tu ring Env iro nme nts

Fig u re 9 . Ma n ufa c tu ring Env iro nme nts

- MTS ・ The re is mo re pro life ratio n of ite m numbe rs at the ra w ma te ria l sta ge tha n the re is at the finis he d p roduct sta ge . ・ This me a ns tha t a compa ny is offe ring a fa irly limite d ra nge of finis he d goods that a re p roduce d from a multitude of pote ntia l ra w ma te ria ls . - MTO o r ETO ・ Compa ny is ca pa ble of producing a la rge ra nge of pote ntia l finis he d units from a re lative s ma ll numbe r of diffe re nt ra w ma te ria ls . - ATO ・ P rod ucts a re ma de - to- stock a t the s uba s s e mbly leve l a nd the n custo mize d in a cco rda nce with a ctua l custome r o rde rs fro m the s uba s s e mbly leve l.

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

6 . S a le s a nd O pe rat io n P la nn ing . S a le s a nd O pe ra tio ns P la nn ing . - Definitio n. ・ Sa le s a nd Ope ra tions Pla nning is a bus ine s s p roce s s that he lps compa nie s ke e p de ma nd a nd s upply in ba la nce . It doe s that by focus ing o n a gg re ga te vo lume s p roduct fa milie s a nd g roups - s o that mix is s ue s - individua l p roducts a nd custome r o rde rs - ca n be ha ndle d mo re re a d ily. It occurs o n a mo nthly cycle a nd dis plays info rmation in both units a nd dolla rs . - Fo ur a dva nta ge s . 1. S&O P provides the link betwee n the bus ine s s pla n a nd the ope ration of ea ch de pa rtme nt. 2. S&O P provide s a me a ns to get a ll de pa rtme nts wo rking towa rd a co mmon goa l. 3. S&O P yie lds a re a listic pla n ca pa ble of a chieving the o rga nizatio n obje ctive s . 4. S&O P e liminate s "hidde n de cis ion." P ro d uc t G ro u ps / Fa m ilie s . - The product g rouping must re pre s e nt the way in which the product is pre s e nte d to the ma rket. - This me a ns tha t the re is a logica l conne ctio n betwe e n the wa y the prod uct o r s e rvice is s o ld, a nd the wa y in which it is produce d . - Ide a lly the re s hould be no mo re tha n 6 to 12 product g roupings pe r s e pa rate bus ine s s unit. - Co ns ide ra tions fo r g rouping products . ・ S imila r ma nufa cturing re quire me nts . ・ S imila r s a le s re quire me nts . ・ P ropo rtio nate cost a nd reve nue effe cts . - The exce ption to the g rouping rule s may be new prod ucts . Compa nie s fre que ntly choos e to pla ce ne w p roducts in a s e pa ra te fa mily. P ro d uc t/ S e rv ic e Hie ra rc hy .

Fig u re 10 . P ro d uc t/ S e rv ic e Hie ra rc hy .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

Re s o u rc e P la nn ing . - Re s ource pla nning is ca pa city pla nning conducte d at the bus ine s s pla n a nd S&OP pla n leve ls . - Re s o urce pla nning de cis ions a lways re q uire to top ma na ge me nt a pprova l. - Re s o urce pla nning provide s the fe a s ibility che ck on the S&O P p roce s s . - Ste ps . 1. Ide ntify key re s ource s . ・ Bottle ne ck a re a s . ・ Flexible is s ue s . ・ Lo ng le a d time fo r cha nge . 2. Dete rmine the ca pa city impa ct on c ritica l re s ou rce . ・ Fa mily leve l pla nning. ・ Ma ste r s che d ule leve l pla nning. 3. Dete rmining timing/Offs et le a d time . Bill o f Re s o u rc e s . - A bill of re s ou rce is a listing of the re quire d a mo unt of constra ining re s ource ne e de d to ma nufa ctu re one unit of a s e le cte d ite m o r fa mily. - The s e could include : ・ La bo r. ・ Mate ria ls o r co mpone nts . ・ Fa cilitie s . ・ Eq uipme nt. ・ Re s e a rch a nd de ve lopme nt a s s e ts . ・ Fina nce s .

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

■ Pe rfo rma nc e Che c k

1. Which of the fo llowing is a n a ctivity inc lude d in the ma ste r pla nning of re s ource s ? A. Bus ine s s pla nning.

B. Stra te gic pla nning.

C. Sa le s a nd o pe ratio ns pla nning.

D. Tota l qua lity ma na ge me nt.

2. Which of the fo llowing is a n e le me nt of de ma nd ma na ge me nt ? A. Fo re ca sting s a le s .

B. Se tting ove ra ll s upply leve ls .

C. Inve nto ry ta rgets .

D. Ma ste r s che duling.

3. Which of the fo llowing proce s s e s s ets the proje cte d ba cklog leve l a t the product g roup leve l ? A. Ma ste r s c he duling.

B. Sa le s a nd ope rations pla nning.

C. Bus ine s s pla nning.

D. De ma nd ma na ge me nt.

4. The pla nning ho rizo n is which of the following ? A. The a mo unt of time it ta ke s to co nduct the pla nning p roce s s . B. The maximum a mo unt of le a d time re quire d to o rde r a nd re ce ive a ll ma te ria ls re quire d. C. 2 ye a rs . D. The a mount of time a pla n exte nds into the future .

5. Which of the fo llowing is pa rt of a bus ine s s pla n ? A. A state me nt of lo ng- ra nge strate gy a nd re ve nue , cost, a nd profit o bje ctive s . B. The s a le s a nd ope ratio ns pla n. C. Sho rt te rm s a le s o bje ctive s . D. Ma ste r s che duling.

6. Which of the fo llowing include s a n a na lys is of the nature of the firm, the ma rke t, a nd the bus ine s s e nviro nme nt ? A. The s a le s a nd o pe ratio n pla n.

B. Be nchma rking.

C. Product g roup a na lys is .

D. The bus ine s s pla n.

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S pecia l Lecture

: Maste r Pla nning of Resources

The Bus ine s s P la nning Pro c e s s

7. In whic h of the following ma nufa cturing e nvironme nts wo uld the re be mo re p rolife ra tio n of ite m numbe rs at the ra w ma te ria l sta ge tha n at the ra w mate ria l sta ge tha n at the finis he d p roduct sta ge ? A. Ma ke - to- o rde r.

B. Ma ke - to- stoc k.

C. As s e mble - to- stock.

D. Engine e r- to- o rde r.

8. The s a le s a nd o pe ra tio ns pla nning proce s s occu rs a t whic h of the following leve ls ? A. Individua l ite m.

B. S ub- compo ne nt line ite ms .

C. Product g roups o r fa milie s .

D. Se rvice pa rts .

9. Fo re ca sts a re mo re a ccurate at which leve l of the product/s e rvice hie ra rchy ? A. Bus ine s s unit.

B. P roduct Fa mily.

C. Mode l o r bra nd.

D. S KU.

10. Re s ou rce pla nning ta ke s pla ce a t which of the following pla nning leve ls ? A. Strate gic pla nning.

B. Bus ine s s pla nning.

C. Ma ste r s che duling.

D. Mate ria l pla nning.

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