BSCM study notes

PracticeStudySheetIndexThisstudyguidecontainsmynotesontopicsfrom“IntroductionToMaterialsManagement”aspreparationforthefirstCPIMExam.Itisorderedbychapter.Youneedtopurchasethisbookinordertomakesenseofthenotes–theyarehighlightsforquickreviewIndex1ChapterOne–IntroductiontoMaterialsManagement1ChapterTwo–ProductionPlanningSystem2ChapterThree–MasterScheduling3ChapterFour–MasterRequirementsPlanning4ChapterFive–CapacityManagement6ChapterSix–ProductionActivityControl8ChapterSeven–Purchasing11ChapterEight–Forecasting12ChapterNine–InventoryFundamentals14ChapterTen–OrderQuantities16ChapterEleven–IndependentDemandOrderingSystems17ChapterTwelve–PhysicalInventoryandWarehouseManagement18ChapterThirteen–PhysicalDistribution20ChapterFourteen–ProductsandProcesses23ChapterFifteen–Just-in-TimeManufacturing25ChapterSixteen–TotalQualityManagement27ChapterOne–IntroductiontoMaterialsManagement•Leadtimeshrinksandinventoryincreasesasyougofrom1)engineertoorder2)maketoorder3)assembletoorder4)maketostock•Threecriticalelementsofthesupplychainare1)flowofmaterials2)flowofinformation3)fundtransfers•ManufacturingPlanningandControlconsistof1)ProductionPlanning2)ImplementationandControl3)InventoryManagement•ProductionPlanningincludes1)forecasting2)masterplanning3)materialrequirementsplanningand4)capacityplanning•ImplementationandControlincludes1)ProductionActivityControland2)Purchasing•FivebasicinputstotheManufacturingInputandControlsystemare1)productdescription/billofmaterial2)processspecifications3)timeneededtoperformoperations,instandardtime4)availablefacilitiesand5)quantitiesrequired•Physicalsupplyanddistributionincludes1)transportation2)distributioninventory3)warehousing4)packaging5)materialshandling6)orderentryChapterTwo–ProductionPlanningSystem•Priority–whatisneeded,howmanyandwhen;Capacityisthecapabilitytoproducegoodsandservices.Inthelongrun,theymustbeinbalance•ManufacturingPlanningandControlSystemhasfivelevels(sortedbylevelofdetail):1.StrategicBusinessPlan2.ProductionPlan3.MasterProductionSchedule4.MaterialRequirementsPlan5.ProductionActivityControlandPurchasing•StrategicBusinessPlan1)marketingdeterminesproduct&pricing2)Financefindsfunds3)Productionmeetsneedsthroughmachinery&labor4)Engineeringisresponsiblefordesign.Reviewedevery6monthstoayear•ProductionPlan1)quantitiesbyproductgroup2)desiredinventorylevels3)equipment,laborandmaterialneeded4)availabilityofresourcesneeded.Planninghorizon6-18monthsandreviewedmonthlyorquarterly•MasterProductionSchedule(MPS)isforproductionofindividualitems.Theplanninghorizonis3-18monthsout.MasterschedulingistheprocessofmakinganMPS.Theplansarechangedweeklyormonthly•MaterialRequirementsPlan(MRP)isaplanforproductionandpurchaseofitemsinthemasterproductionschedule.PurchaseandProductionActivitycontrolusetheMRPforcontrollingrawmaterials.Theplanninghorizonisadaytoamonth•ProductionActivityControlandPurchasingrepresenttheimplementationoftheplan.PurchasingobtainsmaterialpertheMRPandproductioncarriesoutthetasksintheMRP•SalesandOperationsPlanningisderivedfromtheStrategicBusinessPlanandismadeupofaMarketingPlanthatlinkstotheProductionPlan(above)andaDetailedSalesPlanthatlinkstothemasterProductionSchedule(above)•ManufacturingResourcePlanning(MRPII)isthefullyintegratedplanningandcontrolsystem.Itcoordinatesbetweenmarketingandproduction.Itincludesthesalesandoperationsplan,thesalesplan,masterschedule,materialrequirementsplan,purchasing,productionactivitycontrolandperformancemeasures•EnterpriseResourcePlanning(ERP)isanaccountingorientedinformationsystemforidentifyingandplanningtheenterprise.ERPencompassestheentirecompanyandMRPIIismanufacturing•Intheshorttermtheproductplanislimitedbycapacity.Changescanbemadethroughovertime,buildupofinventory,subcontractingandleasingextraequipment•Theproductionplanusuallyhasa12monthtimehorizon,afewproductgroups,demandisfluctuating,plantandequipmentarefixed•Threebasicstrategiesformakingtheproductionplaninclude1)chase2)productionleveling(dividetotalproductionunitsby#ofdaysfortarget)3)subcontracting(makeminimumdemandandsubcontracttherest)•Levelproduction=(totalforecast+backorders+endinginventory–openinginventory)/#ofperiods•Inamake-to-orderenvironment,thereisabacklogofcustomerorders•Resourcebillshowsthecriticalresourcesneededtomakeoneaverageunitintheproductgroup.Thisisusedforresourceplanning.Youneedtodeterminethematerials(#ofunits*#ofmaterialrequired)andlabor(#ofunits*#ofhours)neededtomaketheplaninstandardhoursChapterThree–MasterScheduling•Masterproductionschedule(MPS)1)linksproductionplanningtowhatwillbebuilt2)calculatescapacityandresourcesneeded3)drivesthematerialsrequirementsplan4)drivesprioritiesformanufacturing•Tobuildthemasterproductionschedule(MPS)youneedthefollowinginformation1.theproductionplan2.forecastsforindividualenditems3.actualordersreceivedfromcustomersandforstockreplenishment4.inventorylevelsforindividualenditems5.capacityconstraints•ObjectivesofMPSareto1)maintainfinishedgoodinventorylevels2)makethebestuseoflabor,materials&equipment3)maintaininventoryinvestment(WIP)attherequiredlevels