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PPENDIXES
I Definitions & Abbreviations
- AJF= Asco Joucomatic France - AJN= Asco Joucomatic Netherlands
- ASCP= Advanced Supply Chain Planning (module of Oracle)
- Bucket days = number of days for which Oracle calculates the average gross demand at the MRP planned % method for calculating safety stocks (of the ASCP module). - Bullwhip effect = the amplification of end-customer order signals, whereby upstream
replenishment demand and physical shipments exceed the original order quantity. - Cross dock = a warehouse operation where cargo comes in on one side and is loaded
into a transportation vehicle on the other side, without prior storing of the cargo. - Customization = an ERP system is customized when standard processes are changed. A
system is always configured, but not always customized.
- Configuration = an ERP system is configured when options have been chosen to fit the best way for the company.
- Cumulative lead-time = is the longest planned length of time to accomplish the value adding time in question, with respect to the time to deliver to the customer, the entire process plan, as well as the purchase lead-times.
- Dependent demand = demand that is directly related to or derived from the demand for other items.
- Deterministic independent demand = independent demand where quantity, date and physical characteristics are all known. Deterministic materials management takes demand as their starting point to calculate the necessary resources requirements on the basis of current conditions.
- Discrete job = A production order for the manufacture of a specific (discrete) quantity of an assembly, using specific materials and resources, in a limited time.
- EDC = European distribution centre (situated in France)
- End item = any item that is ordered or sold as such, meaning it will not be used in another BOM of other items.
- Independent demand = demand for an item that is unrelated to the demand for other items.
- Focused production plants = subsidiaries of a holding company that produce with either a low cost high volume strategy or a low volume- high variation strategy
- MPS = A schedule developed from sales orders or from forecasts of demand. The MPS specifies what is to be made (i.e. the number of finished products or items) and when. Besides, it shows what is required to satisfy demand and to meet the production plan. The MPS is a key input into a MRP system (White paper Oralce Metalink, (08-02-2006).
- Production lead-time = is the total time to manufacture an item, exclusive of lower level purchasing lead-time. The production lead-time exists of operation time and interoperation time. The operation time exists of set up time and run time. The interoperation time exists of technical time, non-technical time (set down time) and transport time.
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Stochastic materials management utilizes demand forecasts and buffer forecasting errors by building safety stock into the resources requirements.
- Supply chain management = the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and stakeholders.
- Two level master schedule = A technique that facilitates the forecast explosion of product groupings into related master production schedules. The top–level MPS is usually defined for a product line, family or end product while the second–level is defined for key options and components.
- Trade off = “the tyranny of either/or” – a relationship between performance objectives which holds true for a given set of technological, organizational and attitudinal behaviors. By changing the nature of one side of the trade off, the other side is change as well.
II List of figures, tables and formulas
Figure Table Formula
A Supply network downstream Sources for research A Reorder point Oracle 1 B Supply network upstream Safety Stock parameter
settings at Asco B Reorder point Oracle 2 2 C The horizontal structure Production characteristics
at Asco C Safety Stock % Oracle 3
D The vertical structure Organizational or Oracle
related? D
Safety stock related to
MAD 4
E Cause and Effect diagram Implemented solutions E ATP Oracle 5 F An overview of research
design and phases Further recommendations F Share on total turnover 6 G Detailed cause and effect
diagram
Enablers, Impediments,
Benefits of collaboration G Safety stock formula 7
H Example safety stock MRP % Reorder point 8
I Freezing of forecasts EOQ 9
J Daily demand distribution Ch 10
K 5 step method for PI Co 11
III Forecasting techniques
Focus forecasting uses five simple rules. These are: 1. forecast = actual demand in same period last year 2. forecast = actual demand in previous period this year
3. forecast = (actual demand in previous period this year + actual demand two periods ago this year) / 2
4. actual demand in same period last year x (actual demand in previous period this year/actual demand in previous period before same period last year)
5. actual demand in same period last year x (actual demand in previous period this year / actual demand two periods ago this year)
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smallest APE is chosen. APE is the ratio of the difference between the actual demand and forecast to the actual demand.
APE = actual demand – forecast demand)/actual demand
The second method is called exponential smoothing forecast (ESF) or alpha smoothing forecast. The statistical forecasts available are Trend–enhanced forecast (TEF), Season– enhanced forecast (SEF), and trend and season–enhanced forecast (TSEF).
When exponential smoothing is used, demand is forecasted by averaging all the past periods of actual demand and by weighing more recent data to give greater influence over the forecast results than older data. The weights are adjusted according to the exponential function
( )
( x)x
f =∝ l−α where x is the number of periods past and α is a chosen value between 0 and 1. The larger the α value, the less weight is given to older data and the more the forecast tends to chase the prior period’s demand if demand is not smooth.
IV Error messages
Error messages are an aid to production planning that identify material shortages and late scheduled re supply orders. Especially for unconstrained plans using infinite capacity, the messages are critical for reliable delivery. In a MRP system, the order completion date is calculated in a way that at least a part of the batch will be used in a higher-level order. Delays of the completion of these lower level orders can lead to unreliable delivery if no action is taken. Error messages warn for possible delays. Examples of the most important error messages are past due orders, reschedule in and out, orders to be cancelled, orders with compression days, order that is firmed late. The total number of error messages provides an indication for the degree of uncertainty within the production system. The follow up of many error messages cause numerous schedule disruptions, which leads to a nervous MRP system (Ho et al, 2001).
Examples of the most important error messages in Oracle are: - Past due orders: planned orders with start dates in the past.
- Reschedule out: non-firm existing supply orders with due dates earlier than required, Reschedule in: non-firm existing supply orders with due dates later than suggested. - Order to be cancelled: non-firm existing supply orders that do not satisfy demand or
safety stock requirements.
- Orders with compression days: any supply order that need to be completed in less time than the minimum processing time in order to meet demand.
