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Finished product
E(1)
Component parts
Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc) => use MRP
Q R
L
Time
L 3. When you reach down to a level of inventory of R, you place your next Q sized order.
Inventory transactions
Primary reports Planned order schedule for inventory and production control
Secondary reports
Exception reports Planning reports Reports for performance control
The McGraw-Hill Companies, Inc.,
No Feedback
Realistic?
Feedback
Yes
Execute: Capacity Plans Material Plans
Goal: Plan and monitor all resources of a manufacturing firm (closed loop):
Value Chain Model: Highlights the primary or support activities that add business value A good tool for understanding strategy at the business firm level Primary Activities: Directly related to the production and distribution of a firms products or services
Support Activities: Make the delivery of primary activities possible Consist of the organizations infrastructure, human resources, technology, and procurement
Strategic question: How can IT be used at each point in the value chain to lower costs, differentiate products, and change the scope of competition? Example: Next slide
Figure 3-11
Just-in-Time/Lean Manufacturing/Toyota Production System Pages 91, 96, 137 Also required in the SCM textbook by Chopra
House of Toyota
Traditional U.S. Manufacturing Firm: Push (old style MRP / Material Requirements Planning System) The production of items at times required by a given schedule planned in advance
Work Station 1
WS 2
WS 3
Work Station 1
WS 2
WS 3
Kanban
Japanese word for card
Pronounced kahn-bahn (not can-ban)
May be a card, flag, verbal signal etc. Used often with fixed-size containers
Add or remove containers to change production rate
Triangular Kanban
Part # Part Description Location
Date Triggered
Lot Size
Tool #
Machine #
Kanban
Figure S12.5
Q R
L
Time
L 3. When you reach down to a level of inventory of R, you place your next Q sized order.
Kanban
The function of Kanban The function of Inventory Reorder Point (ROP)