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Production and Inventory Management

Production and Inventory Management

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Published by: amithakim on Dec 14, 2010
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  • 1. The New Environment
  • Planning and Control
  • Computer Systems Assumed
  • 2. Key Concepts
  • Business Structure and Functions
  • Systems—Formal and Informal
  • Records
  • Data Bases
  • Procedural and System Logic
  • Information Pyramids
  • Closed-Loop Systems and Subsystems
  • APICS Terminology
  • Supply and Demand Types
  • 3. Master Planning — Sales and Production
  • Strategic Planning – The Foundation of All Planning
  • Goal Setting
  • General Environmental Factors
  • Specific Environmental Factors
  • Identifying Company Strengths and Weaknesses
  • Developing a Strategy
  • Implementing the Strategy
  • Market Research
  • Forecasting Independent Demand
  • Dollars-Only Forecasts
  • Planning Horizons
  • Effect of Lead Times on Planning Horizons
  • Forecasting Units
  • Forecasting Techniques
  • Master Production Scheduling
  • The Realistic Master Production Schedule
  • 4. Product Structures
  • The Concept of a Part
  • Relationship Pairs
  • Where-Used Lists
  • Drawing Control Systems
  • The Integrated Method
  • Lead Time Offsets
  • Product Costing
  • Management Considerations
  • Engineering Change Control
  • Material Planning Impact
  • Impact on Production
  • 5. Production Operations and Work Center Management
  • Work Centers
  • Work Center Capacity
  • Operation Routings
  • Relationships between Work Center and Operation Records
  • Tooling
  • Manufacturing Information Relationships
  • Managerial Considerations
  • 6. Inventory
  • The Financial View
  • Purpose — the Essential Question
  • Classification Methods
  • Inventory Behavior—ABC Analysis
  • Behavior—Demand Types
  • Planning Levels of Customer Service
  • Manufactured Parts—Dependent and Lumpy Demand
  • Purchased Parts and Raw Materials
  • Physical Control
  • Receiving and Inspection Control
  • Work-in-Process Inventory Control
  • Shipping
  • Warehouse Control and Layout
  • Documentation
  • Cycle Counting versus Physical Inventories
  • Inventory and Other System Elements
  • Record Accuracy—Other Data
  • 7. Executing the Business Plan-Material
  • The Master Schedule – the System Driver
  • Order Generation Logic
  • Assumptions of Order Planning
  • Time Phasing
  • Planning Horizons and Lead Time
  • Subassembly Levels and Purchasing Requirements
  • Lot Sizing and Order Policies
  • Planned Order Management
  • Net Change Processing Assumed
  • Managing Planned Orders with the MPS
  • Engineering Changes
  • Use of Firm Planned Orders
  • The Order Releasing Cycle
  • Released Orders and Work-in-Process Tracking
  • Pegging of Demand
  • Safety Stock
  • Purchasing Under MRP
  • The Goal of Purchasing
  • Extending the System into Vendors
  • "Paperless" Purchasing
  • The Flexible Purchasing Agreement
  • Limited-Capacity Vendors
  • Inventory Turnover and Purchase Order
  • Distribution Requirements Planning
  • 8. Executing the Business Plan in the Plant
  • Relationship to Other Planning Activities
  • Capacity Management Interfaces
  • Long-Range Capacity Planning Techniques
  • Resource Requirements Planning
  • Work Center Loading Logic
  • Planning Horizons and Time Fences
  • Lead Times
  • Operation Lead Time
  • Manufacturing Activity Planning – Short-Range Planning
  • Pre-release Planning
  • Operation Sequencing—After Release
  • Dispatching
  • Management Structure
  • Released Work Order Management
  • Cycle Counting of Work-in-Process Information
  • Work Load Balancing
  • Input/Output Control
  • Lot Control & Serial Number Traceability Considerations
  • Summarizing Work Order Management
  • Management of Work Center Queues
  • Justifying Work Center Queue Investment
  • Getting Control of Queues
  • Results from Effective Queue Management
  • Managing Tooling
  • Managing Vendor-Performed Processing
  • Facilities Management
  • Maintenance of Equipment
  • Plant Layout
  • Overloading and Under-loading of Machines
  • Special-Purpose versus General-Purpose Equipment
  • 9. Measuring Performance – Closing All the Loops
  • The Performance Measurement Process
  • Ensuring Ongoing Planning
  • Ensuring Accurate, Timely Data
  • Understanding Automatic Functions
  • Controlling System Interfaces
  • Communicating via System Data
  • Management by Limits, Tolerances, and Exceptions
  • Use of Cross-Checks and Reconciliations
  • Continuous System Improvements
  • The Information Basis of a Closed Loop
  • Developing a Detailed Performance Measurement
  • Performance Measurement Results
  • The Traditional Accounting Viewpoint
  • Improving Primary Data Base Accuracy
  • Product Structures
  • Part Numbers
  • Operations-Oriented Performance Measurements
  • Forecasting and the Master Production Schedule
  • Purchasing Performance
  • Warehouse Management
  • Production Control Performance
  • Manufacturing Activity Performance
  • Shipping Performance
  • Customer Service Levels
  • Overall Business Plan Effectiveness
  • Traditional Accounting Approach
  • The New Responsibilities
  • Financial Information from Planned Orders
  • Actual Cost Data
  • Developing Variance Information
  • Direct Costing
  • 11. Management in the New Environment
  • Education and Training—A Central Issue
  • Information-Oriented Management Structures
  • Constancy of Rapid Change
  • The Computer Moves to Center Stage
  • New Management Skills
  • Cost of Traditional Orientation
  • Organizing for Planning and Control
  • 12. Key Computer Factors
  • Hardware Overview
  • Organization of CPU Memory
  • Disk Organization and Functions
  • Disk I/O Speed Limitations
  • Other Peripheral Devices
  • Software Overview
  • File Organization Methods
  • Data Base Management Systems
  • Data Base Design
  • Centralized versus Distributed Data Processing
  • Automated Input Devices & Applications
  • Computer Project Management Considerations
  • 13. The Present Is the Future
  • Insights From Japan
  • Simplifying the Business
  • Impact of High Quality Standards
  • Participative Management Styles
  • Disciplined, Formal Systems
  • Worldwide Planning, Marketing, and Operations
  • Other Modern Innovations
  • Plant Arrangements
  • Group Technology
  • Automated Storage/Retrieval Systems
  • Highly Computerized Techniques
  • Changes in Product Design
  • Truly International Operations
  • Bibliography
  • Table of Figures
  • Index

This book opened with remarks to the effect that systems such as those
described in the preceding chapters were developed by practical visionaries.
The main purpose of this book is to stimulate those visions in others by
conveying insight and encouraging further study and thought in areas
particularly relevant to the reader. This approach was chosen rather than a
highly detailed set of discussions because each person's business situation is
somewhat different. Generally, the more specific the discussion, the fewer
people who find it relevant.
In this chapter, this practical visionary theme will be carried still further.
However, as is the case thus far, no concepts will be presented that are not
actually in successful use in more than one industry. This is in keeping with
the book's thrust and emphasis on what actually works in the real world, not
some ideal setting.

At the time of this writing, Japanese companies in many industries are
making their competitive presence heavily felt in the United States and major
European countries. Many manufacturing people ignored these clear trends


Chapter 13 – The Present is the Future

for years, ascribing their competitive advantage to largely cultural factors or
to cheap labor. By now, it is quite apparent that there is much more to the
Japanese industrial environment than this.
In other areas, many changes are apparent. Business is now truly
international, with company after company developing international sources
of raw material and actively selling in the marketplaces of many nations.
Even financing has become international, with billions of dollars flowing
across borders daily, and foreign companies routinely buying and selling
commercial debt instruments and even equity issues in the financial markets
of other countries.

Advanced technology has created new methods of production, and new
methods of designing them. Computers continue their steady advance into
every corner of our culture, especially in engineering and manufacturing.
All of these areas impinge on the traditional outlook of manufacturing
management. Each provides opportunities for improvement in performance
and, by the same token, the potential for competitive threat. It behooves the
enlightened company manager to educate himself in those areas that seem
more pertinent to his industry and company and to move his internal
company culture in the direction of accepting and implementing as many of
these ideas as seem truly useful. After all, if one's own company does not
implement and profitably use state-of-the-art management techniques, sooner
or later the competition will, either locally or abroad.

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