Supply Chain Planning

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Supply Chain Planning

• 19th September 2004
• Dusit Dubai
• SCLG - Dubai

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Seminar Agenda

• Supply Chain Planning Theory and Best Practice
• Coffee Break Opportunity to network
• Supply Chain ExecutionThe latest trends in WDMS
  
• Open Forum - Questions to the panel
• Dinner Opportunity to network

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Presented by

• Krishnan Sugavanam
• Mantis

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Corporate Profile of Mantis

• Established in Athens, Greece in 1996
• Specialize in Supply Chain Planning Execution
• Logistics Vision on 100 Dot Net Comprising of
• Inventory Vision (Powered by Syncron)
• Warehouse Vision
• Transportation Vision
• Mobile Vision
• Plant Vision

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Corporate Profile of Vedasys
BPR, BE, STRATEGY, ISO
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(No Transcript)
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Supply Chain PlanningThe Theory and Best
Practice
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Presentation Agenda

• Syncron International Corporate Overview
• What is Supply Chain Planning (SCP)
• Supply Chain Planning Challenges (interactive)
• The Basic Theory of SCP
• Recent SCP Trends and the Syncron SCP Vision
• Best Practice Case Studies and Benefits Achieved

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SYNCRON International
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Syncron Customers
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Define Supply Chain Planning
Production Planning
Replenishment Planning
Demand Planning
ERP Systems
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Supply Chain Planning
Art and a ScienceDemand Driven Service Driven
SCP
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Supply Chain Planning Challenges

• Interactive

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Some of the Challenges

• How many Stocking Locations Where they are?
  Where to Stock?
• One Supplier or Multiple Suppliers?
• Multiple Lead Times?
• Variability in Supply?
• Variability in Demand?
• Centralised or Decentralised planning?
• How often to order? Weekly, Daily, Monthly,
  Quarterly? Or a combination?
• What forecasting methods to use and why?
• How to classify products for effective inventory
  control?
• What target service levels to set and why?
• How much buffer stocks to hold and where?
• How to measure the achieved service levels?

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Theory of Demand Planning
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Demand Patterns
Lumpy
Slow
Erratic
Positive Trend
Negative Trend
Fast
Obsolete
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Forecast Components
FORECAST COMPONENTS
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Seasonality Profiles
Year One
Year Two
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Manual Intervention

• Forecast adjustments
• Reason codes

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Forecasting Demand
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Some Additional Considerations
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Automatic Demand Filtering
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Volume Density
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Theory of Replenishment Planning
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How do you classify an Item from an Inventory
angle?

• Interactive

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Multi Dimensional Pareto Analysis
ABC based on Volume ABC based on Frequency ABC
based on Turnover
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The Role of Buffer Stocks in the Supply Chain
Typical Sources of Supply
Stocks
The Customer
Demand
The Cushion
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Buffer Stock
The amount of safety stock held to cover random
variations in demand

• Forecast accuracy
• Target service level
• Replenishment frequency
• Lead time its variability
• Seasonality

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What is the Relationship between Inventory and
Service Level?
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Service Driven Buffer
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100
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Basic Systems For Stock Reviews

• Fixed order quantity
• Fixed order cycle

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THE FIXED ORDER QUANTITY SYSTEM
MAXIMUM RATE OF USAGE WITHOUT STOCK-OUT
REORDER QUANTITY (Q)
. . . . . . . . .
REORDER LEVEL POINT (A)
. . . . . . .
. . . .
. . .
. . .
. .
. . .
.
. . .
.
. .

STOCK LEVEL
Q
Q
EXPECTED RATE OF USAGE (R)
BUFFER STOCK LEVEL
. . . .
LEAD TIME (L)
TIME
ROL Forecast over lead -time buffer stock
ROQ can be determined by EOQ or
Coverage Analysis
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THE FIXED ORDER CYCLE SYSTEM
ORDER UP TO LEVEL
REORDER QUANTITY
Q3
REORDER QUANTITY
Q3
Q2
STOCK LEVEL
. . . . . . . . . . . . . .
Q2
Q1
Cover period
. . . . . . . .
BUFFER STOCK LEVEL
LEAD TIME (L)
LEAD TIME (L)
REVIEW PERIOD (T)
TIME
REVIEW PERIOD (T)
OLForecast of Demand in cover period Buffer
Stock ROQOrder Level-Effective Stock Back
Orders
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Coverage Analysis
The objective of coverage analysis is to identify
the optimum ordering frequency for each product
within a group to minimise the overall turnover
stock capital investment.
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Coverage Analysis Example
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DFRP Models

• Warehouse Stocks
• Warehouse Stocks Only
• National Stocks

• Warehouse Forecasts
• Branch Demand
• Branch Forecasts
• Branch Orders
• Branch Order Schedules

Branch forecasts and order schedules based on
local demand
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Theory of Production Planning
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THEORY OF CONSTRAINTS
Accurate Delivery Dates Responsive to
Market Competitive Pricing Product Development
THE RIGHT BALANCE
Throughput
Operating Costs
Inventory
Realistic Order Release Shorter Lead
Times Smaller Lot Sizes Outsourcing
Optimised Sequencing Dynamic Buffers High
Resource Utilisation
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Recent Supply Chain PlanningIndustry Trends
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eCollaboration
C P F R
OEM
Supplier
Distributor
Warehouse
Retail
Information Flow
Product Flow
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VMI Vendor Managed Inventory
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Virtual Stock Management
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Companies moving more and more towards
centralized inventory planning and away from
decentralization of planning activities
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Syncron Supply Chain PlannerOUR SUPPLY CHAIN
CONCEPT
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Local Optimisation
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ERP Myth
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Supply Chain Planning
Global Warehouse
Divisional Warehouse
Shop
Supplier
Manufacturing
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Syncron SCP and eCollaboration
Region Warehouse
Store
Central Warehouse
Manufacturer
Supplier
Sub Supplier
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Questions?

• Break

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Some Quotes from the Boss!!!

• What I need is a list of specific unknown
  problems we will encounter
• Doing it right is no excuse for not meeting the
  schedule
• Quote from the Boss "Teamwork is a lot of people
  doing what I say