Key Supply Chain Optimization Areas

Posted By Terry Vermeylen


A few areas I have experience with.

Master Data – It all starts here. The Master data process must insure that data input is 100% accurate and efficient.

Sales and Operations Planning Smoothing – The Sales plan will blow down to your demand affecting master scheduling, capacity, and subsequently MRP and Shop floor control.

MRP Exception Message measurements – Exception messages indicate that there is an exception to the MRP plan. After action has taken place the root causes must be addressed.

Component Shortage Reporting and Expediting – Weeks before components arrive procurement should be expediting vendors with a shortage report highlighting potential shortages. This can be linked to the exception messages. Overdue shortages should be communicated in weekly meetings throughout the supply chain so that each department understands the criticality and can make adjustments.

Inventory Reduction – Once senior management has defined inventory level goals then a number of tools can be engaged, for example using MRP exception messages to drive reduction targets and JIT techniques available in Schedule Agreements.

Capacity Planning And Capacity Optimization – Long term Capacity or detailed capacity planning highlights resource requirements for both shop floor machinery and manpower. Capacity planning compares requirements with availability, highlights overloaded work centres or shop floor sections and allows levelling to adjust the Material Requirement Plan and Shop Floor Schedule.

Shop Floor Schedule – The shop floor schedule can be derived from the detailed capacity plan and highlight shop floor priorities funnelled from all areas of the company including planning, R&D and engineering change management.

Procurement Contracts – The most interesting contract for the production environment is Schedule Agreements. Send your vendor the long-term MRP plan, allowing him to accurately plan future deliveries. First rate vendors and a stable MRP schedule are essential.

Vendor Evaluation – The top four vendor measurements should be quality, on time delivery, lead-time and cost.

Engineering Change process – Creating an engineering change in the system will create a valid-from date allowing long term planning across various types of master data. Changes will take effect automatically in all supply chain areas including MRP, BOM’s, work centres and the shop floor.

Submit a Comment

Your email address will not be published. Required fields are marked *