Chapter 6: Integrated Operations Planning
Study Questions
1. Improved supply chain visibility provides present information about location and status of inventory and resources. The information concerning these available resources can also be calculated. However, this isn’t any easy job. Supply chain visibility requires remarkable supervision to take care of emphasizing the need for resources to prevent potential issues. If there is limited visibility when it comes to in-transit inventory and their ETA, it can result in ambiguity regarding product availability.
2. The S&OP is a continual management and performance measurement process that business plans, operation plans, financial budgets, as well as operation execution. It basically coordinates all the demand and supply plans throughout an organization. A major objective is to combine top down and bottom up planning using a single set of numbers. Performance gap analysis identifies where the operational plans don’t reach targets and enable fact-based trade-off decisions. The major trade-offs in the S&OP process is
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Demand management, resource allocation, resource optimization, and resource management are major components of an APS system. Demand management gets the desired forecasts for the planning possibilities. Resource allocation identifies the resource allotments and communicates them to the ERP system. Resource optimization is the computational engine of the supply chain planning system. It uses a blend of mathematical programming guesswork to figure out how to enhance resource application while successfully meeting customer’s needs. Resource management outlines and organizes supply chain system resources and limitations. However, if any of the input fails to perform, the total process should be stopped and it can’t begin again until the issue has been resolved. All the components should work in unison – if one is quicker or the other is slower, it won’t be able to complete the
Accommodating customer requirements in most supply chain arrangement requires a forecast to drive the process. (book page 133) When looking into the definition of forecasting which is projecting what is going to be sold (units, seats, rooms etc) it is also important to take into consideration where and when in order to reach the future goals. (book page 133) Since it is argued that effective supply chain and logistical capacity is an important competitive advantage. (Christopher 2005) Where maximizing the revenue is the key element in hospitality sector and for hotel industry there is an increased attention on effective demand management and forecasting for reservation systems. (http://www.sciencedirect.com/science/article/pii/S0169207002000110)
Target is one of the largest and most successful retailers in united states. As part of business expansion, Target announced its launch in Canada. Target decided to implement a new application for Canada, as part of this they decided to implement SAP Supply Chain Management(SCM) Module. A typical SAP Supply Chain Management includes various modules that automate supply chain planning, supply chain coordination, supply chain networking, and Supply Chain Execution (SCE). Target team couldn’t succeed in the implementation of SCM modules, and it led to a major setback for Target in Canada. This paper discusses and describes the
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
Planning and forecasting: Performance measurement serves as a progress check—enabling companies to determine whether they are meeting their goals and base their forecasts and budgets on past perform...
Planning challenges start with specification of client’s demand that must be met by the production plan. It is not easy to predict the exact future demand and thus sometimes future demand is not known (Graves 1999). This results to a firm relying on forecasting to predict the future demand. It is thus important for a company to formulate a plan that comes from the demand uncertainty. Alternatively it is important for a firm to revise the predicted figures frequently in order to update the forecast. This is done using the optimization models. It is very important for a firm to identify the relevant costs in a production planning. It is important to determine the variable costs of production, holding cost/carrying costs and set up costs (Graves 1999).
Operations Management Metrics Operations Management Process is the central artery within the organization because it produces the planning process for goods and services, which are its reason for existence. Operations management is linked to all organizations, as every organization produces either a product or a service. However, it cannot be said to be the most important function since there are other functional areas and boundaries within an organization. In today's fast changing world, organizations have to have a tendency towards being efficient, effective and innovative in the changing environment to succeed. Operations Management has to use metrics in order for them to accomplish their task and be successful with minimal interruptions within the organization.
In the competitive environment, it is necessary for moving products involves reception of products at an intermediate location, store, repackage, clear customs and transport to final destination. The other factor in the supply chain logistics is speed given information flows fast in the internet era. The customer expects everything quick accustomed to the instant status access to the information. With the real time inventory, customer expects the location of the product, it is next scheduled movement and the final delivery schedule.
Every employee should contribute to successful operational performance in some way. Operational performance management is the alignment of all business units within an organization to ensure that they are working together to achieve core business goals. Every staff member should be able to identify areas that may need focus that will cause the company to be different in the future. The focuses to should on strategies that will help maintain competitive advantage. There need to be plans around these areas that will lead our company to be great in the future.
Slack, N., Chambers, S., Johnston, R., Betts, A.,(2009). Operations and process management: Second edition. Harlow: Pearson Education Limited
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Schonberger, R.J. and E.M. Knod Jr. Operations Management: Continuous Improvement. Richard D. Irwin, 1994, p. 44. 16. Selto, F.H. and D.W. Jasinski. "
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
University of Phoenix(Ed.).(2003) Operations management for competitive advantage[University of Phoenix custom edition e-text]. New York: McGraw-Hill. Retrieved February 01, 2005, from university of phoenix, Resource, MGT554- operations management website: https://mycampus.phoenix.edu/secure/resource/resource.asp