Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Pricing and production planning for the supply chain management Yin, Rui ProQuest Dissertations and Theses; 2007; ProQuest Central pg. n/a Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 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Companies manage their supply chains by connecting the functions in the supply chain— Procurement, Manufacturing, and Fulfillment—via supply chain planning (SCP) processes Supply chain planning processes coordinate and share information among the other supply chain functions to create an integrated supply chain Supply chain functions must be integrated for companies to ensure that material is available for manufacturing, manufacturing resources are available when required, and customer orders are fulfilled on time Companies must also integrate the different SCP processes—demand planning, supply planning, and production planning—to ensure that demand does not exceed supply, or vice versa, and that customer orders get fulfilled Companies must coordinate the different supply chain planning processes so that all the plans are synchronized The Sales and Operations Planning process, referred to as S&OP, is normally responsible for coordinating this integration Companies make decisions at different operational levels, including the strategic, tactical, and execution levels, to facilitate their supply chain processes SCP allows companies to plan and integrate the supply chain functions across all entities at all operational levels Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form How Does a Company Achieve Integration? An integrated supply chain passes information back and forth between the business functions and planning processes The diagram below shows an example involving supply and production planning Press the arrow below to see additional information Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form Objectives After completing this module, you will be able to: • Identify the interrelationships between supply chain planning (SCP) processes and the related business functions • Describe the basic process performed by each business function • Describe how each function can be integrated with SCP • Explain why it is critical for SCP to receive and send information to support both strategic and execution functions • Describe how Sales and Operations Planning (S&OP) integrates planning processes Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form Procurement Overview Leading organizations view procurement as a strategic part of their business that drives benefits Purchased materials and external services constitute a major portion—about 55 percent—of the cost of goods sold for a manufacturing company During SCP, planners model lead-times for materials procurement assuming that the material will be available when needed But if a supplier's lead-time performance is erratic; i.e., sometimes they deliver on time, at other times they are late; this variability will require them to carry more safety stock, resulting in additional cost Companies strive to work with suppliers who have little lead-time variability Quality is also an important criterion for working with suppliers If a supplier frequently supplies inferior product, the manufacturer has to discard the low-quality product and re-order, which has an adverse impact on manufacturing We will explore other such procurement issues that either impact SCP or are impacted by it Although procurement is used to procure both direct material, which is used for manufacturing goods, as well as indirect material, like pens, pencils, and paper, we will limit our discussion to the procurement of direct materials because indirect materials have no impact on supply chain plans Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from ...ANALYSIS OF THE SUPPLY CHAIN DESIGN AND PLANNING ISSUES: MODELS AND ALGORITHMS HUANG YIKAI (B.E. and M. E., Tsinghua University, Beijing, China) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF CIVIL ENGINEERING NATIONAL UNIVERSITY OF SINGAPORE 2007 i ACKNOWLEDGEMENTS This thesis is the result of nearly four years of my work whereby I have been accompanied and supported by many people. It is a pleasant aspect that I have now the opportunity to express my gratitude for all of them. First and foremost, I would like to express my deepest appreciation to my supervisor Dr. Meng Qiang for his guidance, support and patience in directing me throughout the research. He has been a steady source of support for me throughout my entire candidature, often offering wise counsel on the academic front. For that, I’ll always be grateful. I am also deeply grateful to the members of my PhD committee who monitored my work and gave me valuable suggestions on the research topic: Associate Professor Lee Der-Horng and Associate Professor K., Raguraman. Special thanks also go to my module lecturers and some other professors: Professor Fwa Tien Fang, Associate Professor Chin Hoong Chor, Associate Professor Chua Kim Huat, David, Associate Professor Phoon Kok Kwang, Associate Professor Lee Loo Hay, Dr Wikrom Jaruphongsa, Associate Professor Cheu Ruey Long from University of Texas at El Paso, Professor Miao Lixin from Tsinghua University and Professor Wang Xiubin from University of Wisconsin. I am bound to the staff in Intelligent Transportation and Vehicle Systems Lab and the traffic lab: Mr Foo Chee Kiong, Madam Theresa and Madam Chong Wei Leng for their stimulating support. I have furthermore to thank my friends Li Lingzi, Li Ting, Khoo Hooi Ling, Cao ii Jinxin, Cao Zhi, Wang Huiqiu, Dong Meng and Bian Wen for their friendship, which is important to my study and life in Singapore. Moreover, many thanks go to my friend Tan Chenxun, who really gave some immense suggestions for my thesis. I am also greatly indebted to National University of Singapore for its generous scholarship supporting my study. Last but not the least, the most heartfelt thanks go to my parents, my uncle and my brother for their perpetual encouragement. iii CONTENT TITLE PAGE i ACKNOWLEDGEMENTS ii CONTENT… .iv SUMMARY… .vi LIST OF TABLES viii LIST OF FIGURES xi CHAPTER INTRODUCTION 1.1 Background 1.2 Objectives .3 1.2.1 Domestic supply chain .3 1.2.2 Global supply chain .6 1.3 Outline of the Thesis CHAPTER LITERATURE REVIEW 10 2.1 Domestic Supply Chain 10 2.1.1 Supply chain network equilibrium models 10 2.1.2 Competitive facility location problems 13 2.2 Global Supply Chain 18 CHAPTER REFORMULATING SUPPLY CHAIN NETWORK EQUILIBRIUM MODELS .24 3.1 Introduction 24 3.2 Supply Chain Network Equilibrium Models 24 3.2.1 Deterministic demand case 26 3.2.2 Random demand case 29 3.3 Unconstrained Minimization Formulations .32 3.4 Quasi-Newton Algorithm vs. the Modified Projection Method .36 3.5 Concepts in Enterprise Resource Planning 2nd Edition Chapter Production and Supply Chain Management Information Systems Chapter Objectives • Describe the steps in the production planning process of a high-volume manufacturer such as Fitter Snacker • Describe Fitter Snacker’s production and materials management problems • Describe how a structured process for supply chain management planning enhances efficiency and decision making • Describe how production-planning data in an ERP system can be shared with suppliers to increase supply chain efficiency Concepts in Enterprise Resource Planning, Second Edition Introduction • Enterprise Resource Planning (ERP) has its roots in Materials Requirements Planning (MRP) • MRP is still a large part of ERP systems • Supply Chain Management looks at the entire supply system from raw materials to finished goods on the retail shelf Concepts in Enterprise Resource Planning, Second Edition Production Overview • A production plan answers two questions: How many of each type of snack bar should we produce, and when? What quantities of raw materials should we order so we can meet that level of production, and when should they be ordered? • A successful company must be able to: • Develop a good production plan • Execute the plan • Make adjustments when customer demand differs from the forecast Concepts in Enterprise Resource Planning, Second Edition Production Overview • Three general production approaches: • Make-to-stock: products are made for inventory in anticipation of sales orders • • Make-to-order: products are made to fill specific customer orders • • Most consumer products are make-to-stock Expensive products or products made to customer specifications Assemble-to-order: combination of make-to-stock and maketo-order • Final product assembled for a specific customer order from stock components Concepts in Enterprise Resource Planning, Second Edition Fitter Snacker’s Manufacturing Process • Snack bar line produces: • 200 bars/minute • 3,000 lb/hr • Production line operates for one 8-hour shift per day • Raw materials are mixed in one of four mixers • Mixers can produce 4,000 lb of dough per hour • Excess capacity protects snack bar line from shutting down if a mixer breaks • The oz snacks are packed 24 to a display box with 12 display boxes packed to a case • Changing from NRG-A to NRG-B bars takes 30 minutes Concepts in Enterprise Resource Planning, Second Edition Mixer Snack Bar Line Form Bake Mixer Mixer Pack Finished Goods Warehouse Raw Material Warehouse Mixer Figure 4.1 Fitter Snacker’s manufacturing process Concepts in Enterprise Resource Planning, Second Edition Fitter Snacker’s Production Problems • Fitter Snacker’s production problem is deciding how many snack bars to make and when to make them • Fitter Snacker’s main production problems are in the areas of: • Communication problems • Inventory problems • Accounting and purchasing problems • All of which are exacerbated by Fitter Snacker’s un-integrated information system Concepts in Enterprise Resource Planning, Second Edition Communication Problems • Communication problems exist in most companies • Magnified in a company without an integrated information system • At Fitter Snacker, Marketing and Production not communicate or coordinate planning • Production is not always informed of sales promotions or unexpected planned orders • Can result in depleted inventory, overtime production, expedited shipments and material shortages • Production may not inform Marketing about planned maintenance, which will reduce production Concepts in Enterprise Resource Planning, Second Edition Inventory Problems • Production manager schedules production based on experience, rather than formal planning techniques • Primarily compares current warehouse inventory Supply Chain Planning: Production Planning Introduction Why is Production Planning Important? The goal of production planning is to support the manufacturing process by determining the resources and sequence of operations required to build a product During the production planning process, a company generates the detailed production schedule required to build a product The production schedule must be tightly linked with a detailed materials plan to ensure the raw materials are available when needed The planning process also communicates required materials to the purchasing department The primary business issues addressed by production planning include: • • Ensuring machines and materials are available for production when needed Maximizing throughput and utilization of factory resources Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form How is a Production Planning Integrated with Supply Chain Planning? Production planning is one component of the supply chain planning process Supply chain planning is an integrated process that allows companies to plan and integrate the supply chain functions of procurement, manufacturing, and fulfillment Demand, supply, production, and fulfillment planning operate as interdependent supply chain planning functions The goal is to integrate these processes so that all the plans are synchronized with one another Plans generated during one process are used by one or more of the other processes In other words, planners need to know: • • What to with the information generated How the different processes relate to one another Specifically, a materials planner may wonder, "What if my suppliers can't deliver to our requested quantities and timing?" There are many ways to resolve this issue One viable option is to delay the production of some of the items until materials are available, and inform fulfillment planning about the delay in meeting customer requirements Another option may be to work with Procurement to determine if the finished goods could be sourced from another vendor Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form Objectives After completing this module, you should be able to: • Discuss the purpose, objectives, and benefits of production planning • Describe the different components of production planning, the business problems it solves, and the key capabilities production planning offers • Identify key inputs, constraints, and other considerations for the components of production planning • Describe the measurements and metrics for production planning Copyright (c) 2004 Accenture All rights reserved You may only use and print one copy of this document for private study in connection with your personal, non-commercial use of a Supply Chain Academy course validly licensed from Accenture This document, may not be photocopied, distributed, or otherwise duplicated, repackaged or modified in any way Note: interactive elements such as activities, quizzes and assessment tests are not available in printed form Introduction to Production Planning Overview Once a company has developed demand and supply plans, it must plan how to manufacture the product Production planning (sometimes referred to Manufacturing Planning and Control for Supply Chain Management About the Authors F Robert Jacobs is a professor at the Kelley School of Business, Indiana University He has served on the APICS board of directors and was a key author of the APICS “Body of Knowledge Framework.” Mr Jacobs is coauthor of previous editions of Manufacturing Planning and Control for Supply Chain Management and coauthor of Operations and Supply Chain Management William L Berry is an emeritus professor at The Ohio State University and coauthor of previous editions of Manufacturing Planning and Control for Supply Chain Management D Clay Whybark is an emeritus professor at the University of North Carolina and coauthor of previous editions of Manufacturing Planning and Control for Supply Chain Management Thomas E Vollmann was a professor at IMD and coauthor of previous editions of Manufacturing Planning and Control for Supply Chain Management Manufacturing Planning and Control for Supply Chain Management APICS/CPIM Certification Edition F Robert Jacobs Indiana University William L Berry The Ohio State University (Emeritus) D Clay Whybark University of North Carolina (Emeritus) Thomas E Vollmann International Institute for Management Development New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2011 by The McGraw-Hill Companies, Inc All rights reserved Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher ISBN: 978-0-07-175032-5 MHID: 0-07-175032-0 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-175031-8, MHID: 0-07-175031-2 All trademarks are trademarks of their respective owners Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of 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(200/week) Click on the "Supply Chain Parameters" button to see the transportation costs per unit between each of the cities Supply Chain Parameters Using these supply chain parameters, he runs... input during the supply planning and the S&OP processes The capacity constraints applied during supply planning are less detailed than the capacity constraints during production planning For example,... Company Achieve Integration? An integrated supply chain passes information back and forth between the business functions and planning processes The diagram below shows an example involving supply and