Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Third Edition
Robert Jacobs, William Lee Berry, D. Clay Whybark, Thomas E. Vollmann
CONTENTS
Preface
Acknowledgments
CHAPTER 1 Manufacturing Planning and Control
The MPC System Defined
Typical MPC Support Activities
An MPC System Framework
MPC System Activities
Matching the MPC System with the Needs of the Firm
An MPC Classification Schema
Evolution of the MPC System
The Changing Competitive World
Reacting to the Changes
Concluding Principles
Discussion Questions
CPIM Certification Questions
CHAPTER 2 Enterprise Resource Planning (ERP)
What Is ERP?
Consistent Numbers
Software Imperatives
Routine Decision-Making
Choosing ERP Software
How ERP Connects the Functional Units
Finance
Manufacturing and Supply Chain Management
Supply Chain Management
Sales and Marketing
Human Resources
Customized Software
Data Integration
How Manufacturing Planning and Control Fits within ERP
Simplified Example
Performance Metrics to Evaluate Integrated System
Effectiveness
The “Functional Silo” Approach
Integrated Supply Chain Metrics
Calculating the Cash-to-Cash Time
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 3 Demand Management
Demand Management in MPC Systems
Demand Management and the MPC Environment
The Make-to-Stock (MTS) Environment
The Assemble-to-Order (ATO) Environment
The Make (Engineer)-to-Order (MTO) Environment
Communicating with Other MPC Modules and Customers
Sales and Operations Planning
Master Production Scheduling
Dealing with Customers on a Day-to-Day Basis
Information Use in Demand Management
Make-to-Knowledge
Data Capture and Monitoring
Customer Relationship Management
Outbound Product Flow
Managing Demand
Organizing for Demand Management
Monitoring the Demand Management Systems
Balancing Supply and Demand
Collaborative Planning, Forecasting, and Replenishment
(CPFR)
The CPFR Process
Concluding Principles
Discussion Questions
Problem
CPIM Certification Questions
CHAPTER 4 Forecasting
Providing Appropriate Forecast Information
Forecasting for Strategic Business Planning
Forecasting for Sales and Operations Planning
Forecasting for Master Production Scheduling and
Control
Regression, Trend, and Seasonal Forecasting
Linear Regression Forecasting
Trend Forecasting
Seasonal Forecasting
Short-Term Forecasting Techniques
Moving-Average Forecasting
Exponential Smoothing Forecasting
Evaluating Forecasts
Using the Forecasts
Considerations for Aggregating Forecasts
Pyramid Forecasting
Incorporating External Information
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 5 Sales and Operations Planning
Sales and Operations Planning in the Firm
Sales and Operations Planning Fundamentals
Sales and Operations Planning and Management
Operations Planning and MPC Systems
Payoffs
The Sales and Operations Planning Process
The Monthly Sales and Operations Planning Process
Sales and Operations Planning Displays
The Basic Trade-Offs
Economic Evaluation of Alternative Plans
The New Management Obligations
Top Management Role
Functional Roles
Integrating Strategic Planning
Controlling the Operations Plan
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 6 Advanced Sales and Operations Planning
Mathematical Programming Approaches
Linear Programming
Mixed Integer Programming
Company Example: Lawn King Inc.
Company Background
Deciding on a Planning Model
The Linear Programming Model
Developing the Planning Parameters
Solving the Linear Programming Model and
Understanding the Results
A Collaborative Session to Discuss the LP Results
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 7 Master Production Scheduling
The Master Production Scheduling Activity
The MPS Is a Statement of Future Output
The Business Environment for the MPS
Linkages to Other Company Activities
Master Production Scheduling Techniques
The Time-Phased Record
Rolling through Time
Order Promising and Available-to-Promise (ATP)
Bill of Materials Structuring for the MPS
The Two-Level MPS
Master Production Schedule Stability
Freezing and Time Fencing
Managing the MPS
The Overstated MPS
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 8 Material Requirements Planning
Material Requirements Planning in Manufacturing Planning
and Control
Record Processing
The Basic MRP Record
An Example Bill of Materials
Gross to Net Explosion
Lead Time Offsetting
Linking the MRP Records
Technical Issues
Processing Frequency
Bucketless Systems
Lot Sizing
Safety Stock and Safety Lead Time
Low-Level Coding
Pegging
Firm Planned Orders
Service Parts
Planning Horizon
Scheduled Receipts versus Planned Order Releases
Using the MRP System
The MRP Planner
Order Launching
Allocation and Availability Checking
Exception Codes
Bottom-Up Replanning
System Dynamics
Transactions during a Period
Rescheduling
Complex Transaction Processing
Procedural Inadequacies
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 9 Advanced MRP and Demand-Driven MRP
Determining Manufacturing Order Quantities
Economic Order Quantities (EOQ)
Periodic Order Quantities (POQ)
Part Period Balancing (PPB)
Wagner-Whitin Algorithm
Simulation Experiments
Buffering Concepts
Categories of Uncertainty
Safety Stock and Safety Lead Time
Scrap Allowances
Other Buffering Mechanisms
Nervousness
Reducing MRP System Nervousness
Demand-Driven MRP Concepts
Selecting Items for Decoupling Processes
Managing the Decoupling Points
DDMRP Example Problem
MRP and Safety Stock Comparison
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 10 Capacity Planning and Management
The Role of Capacity Planning in MPC Systems
Hierarchy of Capacity Planning Decisions
Links to Other MPC System Modules
Capacity Planning and Control Techniques
Capacity Planning Using Overall Factors
Capacity Bills
Resource Profiles
Capacity Requirements Planning
Scheduling Capacity and Materials Simultaneously
Finite Capacity Scheduling: Component Parts
Finite Capacity Scheduling: Product Structures
Management and Capacity Planning and Utilization
Capacity Monitoring with Input/Output Control
Managing Bottleneck Capacity
Capacity Planning in the MPC System
Choosing the Measure of Capacity
Choice of a Specific Technique
Using the Capacity Plan
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 11 Production Activity Control
A Framework for Production Activity Control
MPC System Linkages
The Linkages between MRP and PAC
Just-in-Time Effect on PAC
The Company Environment
Basic Scheduling Research
The One-Machine Case
The Two-Machine Case
Production Activity Control Techniques
Basic Shop-Floor Control Concepts
Gantt Charts
Dynamic Environment Scheduling
Dispatching Approaches
Sequencing Rules’ Attributes
Priority Sequencing Rules
Managing Vendor Material Flows
Vendor Scheduling and Follow-Up
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 12 Theory of Constraints and Advanced Scheduling
Capacity Management Issues
Some Finite Scheduling Fundamentals
Theory of Constraints (TOC)
Basic Concepts of TOC Systems
TOC Scheduling
Buffers
TOC and Lot Sizing
Managing the TOC System
Exploiting the Drums
Material Release—Rope
Proactive Management of Buffers
TOC and the MPC Framework
Implementation Issues
TOC Contributions
Supporting Procedures
Due Date–Setting Procedures
Dynamic Due Dates
Lead-Time Management
Labor-Limited Systems
Transfer Batches and Group Scheduling
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 13 Just-in-Time
JIT in Manufacturing Planning and Control
Major Elements of Just-in-Time
JIT’s Impact on Manufacturing Planning and Control
The Hidden Factory
JIT Building Blocks in MPC
A JIT Implementation Example
Leveling the Production
Pull System Introduction
Product Design
Process Design
Bill of Materials Implications
JIT Applications
Single-Card Kanban
Toyota
Nonrepetitive JIT
A Service-Enhanced View of Manufacturing
Simplified Systems and Routine Execution
Joint-Firm JIT
The Basics
Tightly Coupled JIT Supply
Less Tightly Coupled JIT Supply
JIT Coordination through Hubs
JIT Software
The MRP-JIT Separation
JIT Planning and Execution
Managerial Implications
Scorekeeping
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 14 Distribution Requirements Planning
Distribution Requirements Planning in the Supply Chain
DRP and the MPC System Linkages
DRP and the Marketplace
DRP and Demand Management
DRP and Master Production Scheduling
DRP Techniques
The Basic DRP Record
Time-Phased Order Point
Linking Several Warehouse Records
Managing Day-to-Day Variations from Plan
Safety Stock in DRP
Management Issues with DRP
Data Integrity and Completeness
Organizational Support
Problem Solving
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 15 Supply Chain Logistics
A Framework for Supply Chain Logistics
The Breadth of Supply Chain Logistics
The Total Cost Concept
Design, Operation, and Control Decisions
Supply Chain Logistical Elements
Transportation
Warehouse Location
Logistics Inventory
Warehouse Replenishment Systems
ROP/EOQ Systems
Base Stock Systems
Distribution Requirements Planning
Warehouse Location Analysis
Simulation
Heuristic Procedures
Programming Procedures
Vehicle Scheduling Analysis
Traveling Salesperson Problem
Solution Methodologies
Customer Service Measurement
Make-to-Stock Companies
Make-to-Order Companies
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 16 Order Point Inventory Control Methods
Basic Concepts
Independent- versus Dependent-Demand Items
Functions of Inventory
Management Issues
Routine Inventory Decisions
Determining Inventory System Performance
Implementing Changes in Managing Inventory
Inventory-Related Costs
Order Preparation Costs
Inventory Carrying Costs
Shortage and Customer Service Costs
Incremental Inventory Costs
An Example Cost Trade-Off
Economic Order Quantity Model
Determining the EOQ
Order Timing Decisions
Using Safety Stock for Uncertainty
The Introduction of Safety Stock
Continuous Distributions
Probability of Stocking Out Criterion
Customer Service Criterion
Time Period Correction Factor
Forecast Error Distribution
Multi-Item Management
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
CHAPTER 17 Strategy and MPC System Design
MPC Design Options
Master Production Scheduling Options
Detailed Material Planning Options
Shop-Floor System Options
Choosing the Options
Market Requirements
The Manufacturing Task
Manufacturing Process Design
MPC System Design
Integrating MRP and JIT
The Need to Integrate
Physical Changes That Support Integration
Some Techniques for Integrating MRP and JIT
Concluding Principles
Discussion Questions
Problems
CPIM Certification Questions
APPENDIX A Answers to CPIM Certification Questions
APPENDIX B Areas of the Standard Normal Distribution and
Service Function Values
Index