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45 Matching questions
- Strategy & Planning:
- Forecasting
- Annual Business Planning
- Causal forecast techniques
- Making S&OP Work in an Organization Requires Senior Leadership Involvement
- Logistics Planning & Inventory Deployment
- Demand & Supply Management
- Sourcing software applications
- 8 Keys to Successful S&OP Implementation
- Forecasting Requirements
- Benefits of CFPR - Five Major Categories
- Logistics Forecasts are Necessary To...
- Forecast Challenges
- Seasonal Component
- Analysis:
- Promotional Component
- Demand Planning
- Forecast Techniques
- Logistics planning integrates overall
- Basic planning formula
- Execution:
- Irregular Component
- Three Drivers of Effective Supply Chain Planning
- Production Planning
- Time series forecast techniques
- Sales & operations planning is an integrated combination of
- Demand Planning - Potential Issues / Watch-Outs
- Period demand equation
- Demand management processes must integrate
- Collaborative Planning, Forecasting and Replenishment
- Forecasts must be more timely and accurate to align
- Perod logistics requirements equation
- Production planning systems match
- Benefits of Integrated Operations Planning
- Base Demand
- Qualitative forecast techniques
- Forecasting Accuracy
- Trend Component
- Forecast for time T
- Common software applications for most planning environments include:
- Supply Chain Planning
- Forecast Process
- Evaluating Applicability of Forecasting Techniques
- CPFR Process Steps
- Cyclic Component
- a 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 - b the requirements plan with the production constraints, i.e. Advanced Planning & Scheduling (APS)
-Limitations can include material, facility, equipment and labor availability - c Demand management system is the information technology component of the sales and operations planning (S&OP) process
Demand management develops the forecasts used by other supply chain processes to anticipate sales levels
Forecasts are then used to determine production and inventory requirements
Must maintain forecast data consistency across multiple products and warehouse facilities - d Support collaborative planning
-Collaborative forecasts help avoid inventory
excesses and out-of-stock situations
Drive requirements planning to determine
-Inventory projections
-Replenishment requirements
-Production requirements
Improve resource management through cost trade-offs of strategies such as
-Extra production capacity
-Extra storage capacity - e Executing the process every month
Process ownership and clarity of roles and responsibilities
Organizational commitment to achieving high forecast accuracy (senior management commitment & performance objectives)
Focus should be on the next 3 to 12 months (not short-term)
One plan that integrates the actions of the entire organization
Senior management decision making (bottom-up / top-down)
Measuring end-to-end supply chain performance
S&OP forecast versus operating plan or budget - f 1.)Develop a joint business plan
2.)Create a joint calendar to determine product flow
3.)Create a common sales forecast based on shared knowledge of each trading partner's plan
-Share common forecast between retailer and
suppliers
-Use an iterative process to share the forecast and
requirements plan
4.)Use the common sales forecast to develop
-Production plan
-Replenishment plan
-Shipment plan - g Forecast is the specific definition of what is projected to be sold, when and where
Forecasting is a critical capability
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 - h Demand planning
Production planning
Logistics planning
Inventory deployment - i -A meaningful forecast process requires integrated and consistent combination of components
Faulty communications are costly for supply chains
-Seek to reduce forecast inconsistency across
multiple members of the supply chain
Efforts to perfect a single component do not overcome need for other components
Process design should consider strengths and weaknesses of each individual component
-Design for optimal performance of the overall
integrated system - j -Organizational processes
-Personal responsibility and accountability
-Information systems (financial, marketing and supply chain planning)
Using this S&OP combination, the operations and sales groups must overcome conflicts to develop consensus and then execute their collaborative plans
Finance also plays a key role in dollarizing the impact of decisions - k focuses entirely on historical patterns and pattern changes to generate forecasts
"The past is a good predictor of the future"
e.g., moving averages, exponential smoothing, extended smoothing, and adaptive smoothing - l exception management and performance assessment.
Exception management is actively monitoring planning and operations for out of bound conditions
Performance assessment is evaluating the achievement of business goals to uncover trends or develop alternative strategies. - m is annual recurring upward or downward movement in demand
e.g. Toy demand before Christmas - n These applications can be sourced from the following options
-Custom developed for the organization
-Packaged solutions contained in a larger supply chain management system
-Modules within an ERP system - o : consists of sales forecasting, order planning/forecasting, inventory positions, and transit lead times.
- p Demand Variability
-Distribution (retail stores) gains and losses
-Competitive Activity
-Economy (private labels)
Scale of Information from Marketing & Sales
Promotions - Increased Complexity
Supply Issues - q relies on expert opinion and special information
Costly and time-consuming
Ideal for situations with little historical data or when much managerial judgment are required
Developed using surveys, panels and consensus meetings - r -Improving accuracy of forecasts requires error measurement followed by analysis
-Choice of method for error measurement
Simple average error can hide problems as positive errors are offset by negative ones
Mean Absolute Deviation (MAD) evaluates absolute error by ignoring the sign of the error
Mean Absolute Percentage Error (MAPE) is mean MAD divided by mean demand - s Plan
Source
Make
Deliver
Return - t Begin Inventory + Production - Demand = Ending inventory
- u Strategic planning starts the process - 3-5 year horizon
Integrated Operations Planning - Deliver the plan!
Monitor, control, adjust for actual variance from plan - v is long-term average demand after other components are removed
- w (Base damnd X Seasonal X Trend X Cyclic X Promotion) + irregular
- x Evaluate technique both quantitatively & qualitatively for:
Accuracy
Forecast time horizon
Value of forecasting to business strategy
Data availability
Type of data pattern
Experience of the forecaster - y 1.) Supply Chain Visibility
2.)Exception management to respond to disruptions and minimize/prevent potential problems
3.) Enables identification of trade-offs that can increase functional costs, but lower total system costs
-Stay focused on the customer! - z uses specific information to develop relationships between lead events and forecasted activity
e.g., simple or multiple regression - aa Functional
leadership from all key operating areas must be committed to the
S&OP process and be responsible for achieving success
Supply Chain Planning, Sales & Marketing, Manufacturing, Finance
Tie manager's compensation to successful S&OP performance
Include regular involvement and accountability at the general management level
Tradeoff decisions may negatively impact a functional area - ab consists of order generation, and order fulfillment.
- ac Overcomes these problems resulting from individual perspectives
Limited economies of scale
Limited information sharing
Excessive transportation expense - ad Historical forecasts
Promotional plans
Pricing changes
New product introductions - ae includes random or unpredictable quantities that do not fit other components
- af Customer demands for higher service levels and more product variations with
A management focus to reduce supply chain assets - ag Improved Customer Service Through Better Forecasting Techniques
Lower Inventories for Higher Profits
Improved ROI on Technology Investment
Improved Relationships Between Trading Partners
Cost Reduction - ah Forecasting in many companies is typically a "best fit line" using history
The problem is that you can be driving down the
road by looking in the rear view mirror. The future
might be significantly different than the past.
Marketing:
May low ball the forecast numbers because if actual
sales exceed their forecast, they can look like hero's
in the organization.
May inflate the forecast numbers to essentially
create "2 sets of books", the real forecast and the
inflated forecast to ensure that Logistics plans for
plenty of inventory - ai is periodic shifts in demand lasting more than a year
e.g. Housing demand follows business economic cycle - aj establishes the ground rules for the collaborative relationship
Business goals
Scope of collaboration and assignment of roles
Responsibilities
Checkpoints / milestones
Escalation procedures - ak Matches product requirements of customers with capacity of enterprise/supply chain.
- al Period demand - inventory-on-hand - Planned receipts
- am Forecasts+Customer orders + promotions
- an CFPR
is a business model that takes a holistic approach to supply chain
management and combines the intelligence of multiple trading partners in
planning and fulfilling customer demand by using common metrics,
language and firm agreements to improve efficiency for all participants.
CFPR links sales and marketing best practices - category management, supply chain planning and execution processes to increase availability while reducing inventory, merchandizing, transportation, and logistics costs.
Developed to reduce unplanned and uncoordinated events that distort the smooth flow of product throughout the supply chain (reduces bullwhip effect) - ao -Facilitates more effective planning with shorter cycle times.
-Offers 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.
-Greater integration with financial plans.
-Increased inclusion of strategic initiatives and activities.
-Improved simulation and modeling of alternatives.
-Easier translation between aggregate and detailed planning levels. - ap Moving average -- weighted average previous period sales
Exponential smoothing -- WEIGHTED MOVING AVERAGE using smoothing constraints
Regression -- Time period as the independent variable
Time series -- Other independent variables such as price, promotion plans
Multivariate -- Complex statistical techniques - aq is long-range shift in periodic sales
Positive, negative or neutral - ar is demand swings initiated by a firm's marketing activities
Advertising, deals, or promotions - as Production planning uses requirements from demand management to develop a realistic supply plan
Must integrate with manufacturing (and 3rd party) resources and constraints
-Requirements plan defines what items are needed and when
-Effective planning creates a time-sequenced plan