Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
CHAPTER 6: Integrated Operations
Planning
CHAPTER 6: Integrated Operations
Planning
6-2
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Supply chain planning
•
Supply chain planning applications
•
Sales and operations planning
•
APS system overview
•
Collaborative planning, forecasting and
replenishment
•
Forecasting
Overview of integrated operations planning
6-3
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Demand planning responsiveness
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Customer relationship collaboration
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Order fulfillment/service delivery
•
Manufacturing customization
•

Resource utilization is a coordinated
approach to making functional resource trade-
offs
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Considers service requirements while
minimizing combined supply chain resources
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Critical capability when firms emphasize overall
asset utilization
Factors that drive effective planning
6-7
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Common software applications for most planning environments include
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Demand planning
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Production planning
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Logistics planning
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These applications can be sourced from the following options
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Custom developed for the organization
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Packaged solutions contained in a larger supply chain management system
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Modules within an ERP system
Supply chain planning applications overview
6-8
•

•
Effective planning creates a time-sequenced plan to manufacture the correct items in a timely manner while operating
within constraints
Production planning
6-10
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Logistics planning integrates overall movement demand, vehicle availability, and relevant movement
cost into a decision support system that seeks to minimize overall freight expense
–
Analysis suggests ways freight can be shifted among carriers or consolidated to lower expenses
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Overcomes these problems resulting from individual perspectives
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Limited economies of scale
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Limited information sharing
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Excessive transportation expense
Logistics planning
6-11
+ Forecasts (sales, marketing input, histories, accounts)
+ Customer orders (current orders, future committed orders, contracts)
+ Promotions (promotion, advertising plans)
= Period demand
- Inventory-on-hand
- Planned receipts
= Period logistics requirements
Figure 6.1
Logistics requirements
6-12

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1
2
2
3
3
4
4
5
5
6-15
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Functional leadership from all key operating areas must be committed to the S&OP
process and be responsible for achieving success
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Tie manager’s compensation to successful S&OP performance
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Include regular involvement and accountability at the general management level
Making S&OP work in an organization requires senior leadership
involvement
6-16
•
Executing the process every month
•
Process ownership and clarity of roles and responsibilities
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Organizational commitment to achieving high forecast accuracy
•
Focus should be on the next 3 to 12 months
•

Offer capability to consider the extended supply chain and make appropriate trade-offs to
achieve optimal performance.
•
More effective and responsive planning allows a more level assignment of resources for
existing sourcing, production, storage, and transportation capacity.
Supply chain planning benefits
6-21
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Greater integration with enterprise financial plans.
•
Increased inclusion of strategic initiatives and activities.
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Improved simulation and modeling of alternatives.
•
Easier translation between aggregate and detailed planning levels.
Benefits of integrated business planning
6-22
•
CPFR coordinates the requirements planning process between supply chain partners for
demand creation and demand fulfillment activities
–
Process initiated by the consumer products industry
•
Developed to reduce unplanned and uncoordinated events that distort the smooth flow of
product throughout the supply chain
Collaborative planning, forecasting and replenishment (CPFR)
6-23
•
Develop a joint business plan
•

–
Many logistics and supply chain activities must be
completed in anticipation of a sale
•
Forecasting approaches to achieve enhanced service
or reduced inventory
–
Improve forecast accuracy
–
Forecast at a higher level of aggregation
Forecasting