managing business processes: demand management cheng li, ph.d. california state university, los...
TRANSCRIPT
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Managing Business Processes: Demand ManagementCheng Li, Ph.D.California State University, Los AngelesJanuary 2002
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Review AssumptionsConvert assumptions into numbersSales Plan by Product FamilySales Plan by ItemProactive Sales PlansMeasure Actuals against PlansSALES PLANNING PROCESS
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ForecastingForecasting Techniques:based on historybased on causal relationshipsbased on peoples opinions
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Strategies for Managing DemandPartitioning DemandOffering Price IncentivesPromoting Off-Peak DemandDeveloping Complementary ServicesUse Reservation Systems and Handling Overbooking Problem
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Managing Business Processes: Capacity Management
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Capacity Planning StrategiesLevel StrategyChase StrategyMixed Strategy
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Workforce SchedulingCapacity of i Requirement of iWhat is the requirement when there is uncertainty?What is the basic time window?Capacity constraintsavailability constraintswork schedule constraints
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Workforce SchedulingSolution Techniquesqueuing theorylinear programmingspreadsheet
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Linear ProgrammingMinimize: Total CostSubject to: Capacity availabilityWork schedule constraintsCapacity requirementsetc.
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Issues in SchedulingOverlapping shift schedulesPart-time workersDays-off schedules
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Inventory ManagementWhat is inventory?delay in work flowWhy keep inventory?Reduce ordering costDeal with demand uncertaintyDeal with uncertainty in the work processetc.
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Input/Output AnalysisChange in inventory = Input - OutputAverage throughput time is proportional to the level of inventory.
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Flow and InventoryFigure 11.1
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MRPA general framework for MRPInputs: Bill of Materials, Inventory Files and Master Production ScheduleMRP Processing
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A General Framework of MRPAggregate PlanMaster ProductionScheduleMRPCapacity RequirementsPlanningProduction Scheduling
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Master Production Schedule
Week
1
2
3
4
5
6
7
8
M1
23
23
23
23
M2
10
10
10
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Bill of MaterialsFigure 15.10
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Inventory FilesOn-HandOpen OrdersLead TimesVendor InformationQuality records, etc.
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MRP ExplosionFigure 15.11
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MRP ExplosionFigure 15.11
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Issues in MRPTwo basic concepts:Net requirementsLead time offsetLot sizeSafety stock/Safety lead timeInventory recordsValidity of the schedules
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JIT and Inventory ManagementInventory as delay in work flowWhy inventory?Dealing with fluctuations in demandDealing with uncertaintyReducing transaction costsTaking advantage of quantity discountHedging against inflation, etc.
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JIT and Inventory ManagementInventory costs:Holding costLong response timeLow flexibilitySlow feedback in the system
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JIT and Inventory ManagementThe objective of JIT: General: reduce wasteSpecific: avoid making or delivering parts before they are neededStrategy:very short time windowmixed modelsvery small lot sizes.
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JIT and Inventory ManagementPrerequisites:Reduce set up time drasticallyKeep a very smooth production processCore Components:Demand driven scheduling: the Kanban systemElimination of buffer stock
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JIT and Inventory ManagementCore Components: (cont.)Process Design:Setup time reductionManufacturing cellsLimited work in processQuality Improvement
But some may be scrap.The series starts with the MRP record for the end item.