PLANNI

NGANDMANAGI
NGOPERATI
ONS
I
. DEMANDFORECASTI
NG
DemandFor ecasti
ng refer
st otheprocessofpredicti
ngthefutur
edemand
forthefir
m’spr oduct.Inotherwords,demandf orecasti
ngiscompr i
sedof
aser i
esofst epsthatinvolvestheanti
cipat
ionofdemandf oraproducti
n
futureunderbot hcontroll
ableandnon-control
l
ablefactors.
Thebusinesswor ldischaract eri
zedbyr i
skanduncer taint
y,andmostof
thebusinessdecisionsaret akenundert hi
sscenario.Anor ganizati
on
comeacr ossseveral r
isks,bothinternalorexter
naltothebusi ness
operati
onssuchast echnology ,
attr
it
ion,unrest,
employ eegrievances,
recessi
on,inf
lat
ion, modifi
cationsint hegovernmentlaws, et
c.
STEPSI
NDEMANDFORECASTI
NG 
 Speci
fyi
ngt
heObj
ect
ive

 Det
ermi
ningt
heTi
mePer
spect
ive

 Choi
ceofmet
hodf
orDemandFor
ecast
ing

 Col
l
ect
ionofDat
aandDat
aAdj
ust
ment

 Est
imat
ionandI
nter
pret
ati
onofResul
ts

I
I. VALUECHAI
N
Av al
uechainisabusinessmodel t
hatdescr ibest hefullr
angeofact i
vit
ies
neededtocreateaproductorservi
ce.Forcompani esthatproducegoods,
avaluechaincompri
sest hestepst
hati nvolvebringingapr oductfrom
concept
iontodist
ri
bution,andever
y t
hingi nbetween—suchaspr ocur
ing
rawmaterial
s,manufacturi
ngfunct
ions, andmar ket i
ngactivi
ti
es.
Becauseofev er-
incr
easingcompetiti
onf orunbeat
abl
epr i
ces,excepti
onal
products,andcustomerloyal
ty,companiesmustcontinual
lyexami nethe
valuetheycreat
ei nordert
oretainthei
rcompet i
ti
veadvantage.Av al
ue
chaincanhelpacompanyt odiscer
nar easofitsbusi
nessthatare
i
neff
ici
ent
,thenimplementst
rategi
esthatwi
l
lopt
imi
zei
tspr
ocedur
esf
or
maxi
mum ef f
ici
encyandprof
itabi
li
ty.
I
II
. SUPPLYCHAI
NMANAGEMENT
Supplychainmanagementi sthemanagementoft heflowofgoodsand
servi
cesandi ncl
udesall
processesthattransf
ormrawmat eri
alsi
ntof i
nal
products.I
tinvol
vestheacti
vestreamli
ningofabusiness'
ssupply-
side
acti
vit
iestomaximizecustomerv al
ueandgai nacompet i
ti
veadvantagein
themar ket
place.
SCM representsaneffortbysuppl
ier
st odevel
opandi mpl
ementsuppl
y
chainst
hatar easeff
icientandeconomi cal
aspossibl
e.Suppl
ychai
ns
covereveryt
hingfr
om pr oduct
iontoproductdevel
opmenttothe
i
nformationsystemsneededt odir
ecttheseundertaki
ngs.

I
nSCM, t
hesuppl
ychai
nmanagercoordi
natesthel
ogi
sti
csofal
laspect
s
oft
hesuppl
ychai
nwhichconsi
stsoff
ivepart
s:
 Thepl
anorst
rat
egy
 Thesour
ce(
ofr
awmat
eri
alsorser
vices)
 Manuf
act
uri
ng(
focusedonpr
oduct
ivi
tyandef
fi
ci
ency
)
 Del
i
ver
yandl
ogi
sti
cs
 Ther
etur
nsy
stem (
fordef
ect
iveorunwant
edpr
oduct
s)

I
V. PURCHASI
NG
Purchasingisabusinessororganizat
ionattemptingtoacqui r
egoodsor
servi
cest oaccompli
shi t
sgoals.Alt
hought hereareseveralorgani
zati
ons
thatatt
emptt osetstandardsi
nt hepurchasingprocess,processescan
varygreatl
ybetweenor gani
zat
ions.
Purchasingi
stheor ganizedacqui
sit
ionofgoodsandservi
cesonbehalfof
thebuyingenti
ty.Purchasingact
ivi
ti
esareneededtoensuret
hatneeded
i
temsar eobtai
nedi nat i
melymannerandatar easonabl
ecost.A
purchasingdepartmentisespeci
all
ynecessaryinamanufact
uri
ng
business,wherelargeamountsofrawmat eri
alsandcomponent
smustbe
obtainedonar ecurri
ngbasi
s.

V. I
NVENTORYMANAGEMENT
Inventor
ymanagementisadiscipl
ineprimar
il
yaboutspecif
ying
theshapeandplacementofstockedgoods.Iti
srequir
edat
dif
ferentl
ocat
ionswit
hinafaci
li
tyorwi t
hinmanylocat
ionsofa
supplynetwor
ktoprecedet
her egularandpl
annedcourseof
producti
onandstockofmateri
als.
I
nv ent
or yisdef inedasast ockorstoreofgoods.Thesegoods
aremai ntainedonhandatornearabusi ness'slocati
onsot hat
thefir
m maymeetdemandandf ulf
il
li
tsr easonf orexist
ence.If
thefir
mi sar etailestabl
i
shment ,acustomermayl ookel sewhere
tohavehi sorherneedssat i
sfiedi
fthef i
rm doesnothav ethe
requir
edi tem inst ockwhent hecustomerar r
ives.I
fthef i
rmisa
manuf acturer,itmustmai ntainsomei nventoryofr awmat eri
als
andwor k-in-processi nordert okeepthef actoryrunning.In
additi
on, i
tmustmai ntai
nsomesuppl yoff ini
shedgoodsi norder
tomeetdemand.

Invent
orymanagementref
erstotheprocessofor deri
ng,
stori
ng,andusi
ngacompany '
sinvent
ory.Theseincludethe
managementofr awmater
ial
s,component s,
andf ini
shed
productsaswel
laswarehousi
ngandpr ocessingsuchi t
ems.
 Forcompani
eswithcomplexsupplychainsand
manufact
uri
ngprocesses,
bal
ancingther i
sksofi
nvent
ory
gl
utsandshort
agesisespeci
all
ydiff
icul
t.
 Toachievethesebalances,f
irmshavedevel
opedt womaj
or
methodsforinvent
orymanagement :j
ust-
in-
ti
meand
materi
alsrequi
rementplanning:
just
-i
n-t
ime(JIT)and
materi
alsrequi
rementplanning(MRP).

VI
. SCHEDULI
NG
Schedul
i
ngi stheprocessofarranging,contr
oll
ingandopt imizingwor k
andworkloadsinaproductionprocessormanuf act
uringprocess.
Schedul
i
ngi susedtoallocateplantandmachi neryresources,plan
humanresources,pl
anpr oducti
onpr ocessesandpur chasemat er
ial
s.
Iti
sani mport
anttool f
ormanuf acturi
ngandengi neering,whereitcan
haveamaj orimpactont heproductivi
tyofapr ocess.Inmanuf actur
ing,
thepurposeofschedulingistomi nimizetheproductiontimeandcost s,
bytel
li
ngapr oducti
onf aci
li
tywhent omake, wi t
hwhi chstaff
,andon
whichequipment.Producti
onschedul ingaimst omaxi mizethe
eff
ici
encyoftheoper at
ionandr educecost s.
Thebenef
it
sofpr
oduct
ionschedul
ingi
ncl
ude:
 Pr
ocesschange-
overr
educt
ion
I
nvent
oryr
educt
ion,
lev
eli
ng
 Reducedschedul
i
ngef
for
t
I
ncr
easedpr
oduct
ionef
fi
ciency
 Laborl
oadl
evel
i
ng
 Accur
atedel
i
ver
ydat
equot
es
 Real
timei
nfor
mat
ion

Pr
oductionschedul
ingtool
sgreatl
youtper
form oldermanualschedul
i
ng
methods.Theseprovi
detheproducti
onschedulerwithpowerful
gr
aphicali
nter
faceswhichcanbeusedt ovi
suallyopti
mizereal-
ti
me
workloadsinvariousst agesofpr oduction,andpat t
ernrecogni t
ion
all
owst hesoftwar etoaut omat ical
lycreateschedulingoppor tunit
ies
whichmi ghtnotbeappar entwi thoutthisv i
ewi ntothedata.For
exampl e,
anairli
nemi ghtwi shtomi nimi zethenumberofai rportgates
requir
edf ori
tsaircraf
t,inor dert or
educecost s,andscheduling
softwarecanallowt hepl anner stoseehowt hi
scanbedone, by
analyzi
ngt i
met ables,air
cr aftusage,ort heflowofpassenger s.

Schedul
ingi
nPr
oduct
ionandOper
ati
onManagement
Schedulingcanbedef inedas“pr
escribi
ngofwhenandwher eeach
operat
ionnecessar yt
omanuf acturetheproductistobeper formed.”It
i
salsodef inedas“establi
shi
ngoft i
mesatwhi cht obeginandcompl et
e
eachev entoroperati
oncompr i
singapr ocedur
e”.Thepr i
ncipleai
m of
schedulingistopl
ant hesequenceofwor ksot hatproducti
oncanbe
syst
emat i
call
yar
rangedt owar
dst heendofcompl eti
onofal lproducts
byduedat e.

Pr
inci
plesofSchedul
ing
1. Thepr
inci
pleofopti
mum tasksize:
Scheduli
ngt
endstoachieve
maxi
mum ef f
ici
encywhenthetasksizesar
esmall
,andal
ltasksof
sameorderofmagnit
ude.
2. Pri
nci
pleofopt
imum pr
oduct
ionplan:
Theplanni
ngshoul
dbe
sucht
hatiti
mposesanequalloadonall
plant
s.
3. Pr
inci
pleofopti
mum sequence:
Schedul
ingtendst
oachievet
he
maximum eff
ici
encywhentheworki
splannedsothatworkhour
s
ar
enormallyusedint
hesamesequence.

Schedul
ingSt
rat
egi
es
Schedul
i
ngst
rat
egi
esv
arywi
del
yamongf
ir
msandr
angef
rom ‘
no
 schedul
ing’t
overysophi
sti
cat
edappr
oaches.Thesest
rat
egi
esar
e
groupedint
ofourcl
asses:
1.Detail
edscheduling:Detai
ledschedulingforspeci
fi
cjobsthatar
e
arr
ivedf r
om customersisimpr acti
cablei
nactualmanufactur
ing
si
tuation.Changesinorders,equipmentbreakdown,and
unforeseeneventsdeviatetheplans.

2.Cumulati
vescheduli
ng:Cumulati
veschedul
ingoftotalworkload
i
susefulespeci
all
yforlongr
angeplanningofcapacityneeds.Thi
s
mayloadthecurrentperi
odexcessi
vel
yandunderl oadfuture
per
iods.I
thassomemeanst ocontr
olthejobs.
3.Cumul ati
vedetail
ed:Cumulat
ivedet
ail
edcombinati
oni
sboth
feasibl
eandpr acti
calappr
oach.I
fmasterschedul
ehasfi
xedand
fl
exibleport
ions.
4.Prior
it
ydecisi
onr ul
es:Priori
tydeci
sionrulesareschedul
i
nggui des
thatareusedindependent l
yandinconjunctionwit
honeoft he
abovestrat
egies,i.
e.,
fir
stcomef ir
stserve.Theseareusefuli
n
reduci
ngWor k-I
n-Process(WI P)i
nventor
y.
Ty
pesofSchedul
ing
Typesofschedul
i
ngcanbecat
egor
izedasf
orwar
dschedul
i
ngand
backwar
dscheduli
ng.
1.For
war
dschedul
ing
i
scommonl yusedi nj obshopswher ecustomer splacetheirorder son
“neededassoonaspossi ble”basis.Forwardschedul i
ngdet er
mi nesst ar
t
andf i
nishtimesofnextpr i
or i
tyjobbyassigningittheearli
estav ail
able
ti
mesl otandf rom thatt ime, deter
mineswhent hejobwillbefinishedin
thatwor kcenter.Sincet hej obandi t
scomponent sstar
tasear lyas
possible,t
heywi llt
y picall
ybecompl etedbeforetheyaredueatt he
subsequentwor kcent ersint herouti
ng.Thef orwardmet hodgener at
esin
theprocessi nventoryt hatar eneededatsubsequentwor kcenter sand
higherinventor
ycost .Forwar dschedul i
ngi
ssi mpletouseandi tget sj
obs
donei nshorterleadt imes, compar edtobackwar dscheduling.
 2.Backwar
dschedul
ing
i
sof tenusedinassembl ytypeindust
riesandcommi ti
nadvancet o
speci fi
cdeli
verydates.Backwar dschedul i
ngdet er
minesthestartand
fi
nisht imesforwai t
ingjobsbyassi gningthem tothelat
estavail
abletime
slott hatwi
llenableeachj obtobecompl etedjustwheniti
sdue, butdone
bef ore.Byassigningjobsasl ateaspossible,backwardscheduli
ng
mi nimizesinventori
essi nceajobisnotcompl et
eduntil
itmustgodi r
ectl
y
tot henextwor kcentreoni tsrouti
ng.Forwardandbackwar dscheduling
met hodsareshowni nt hefoll
owingfigure.

VI
I. SEQUENCI
NG
Iti
st opl
ant heorderoftheoper
ati
onbypr ocess,regar
dingthefi
xedor ders
throughtheOper ati
onOrderRel
easePlanning.Iti
stograsptheprogress
statusoftheoper at
ion,
toconsi
derthepri
or i
ty,
setupti
me, andet
c.,andt o
makeanoper at
ionsequencingl
ist
.
Jobsequencingrul
esdet
erminethepr i
ori
tyforprocessi
ngj obs.They
addr
essschedulingpr
obl
emst hatgenerall
yleadtoineffi
ci
entper for
mance
i
nassigni
ngjobsandcompl et
ingthem.Ofcent r
al i
mportancei sjobfl
ow
ti
me,whichistheamountofti
meaj obspendsinashopf rom order
pl
acementtoi t
scomplet
ionandrelease.Theaveraget i
met akent o
complet
ejobsisonewayofmeasur i
ngaj obshop'sperfor
mance.

Opt
imalProduct
ionSequence–ef
fi
cient
,adapt
abl
e,and
i
ndi
vidual
lyconf
igur
abl
e
SequencePlanni
ngisthecreati
onofanopt imizedassembl ysequencethat
takesint
oaccountall
oftheproducti
onandsuppl yrestri
ctions.The
producti
onsequencehel
pst oavoidbott
lenecksituationswhi l
emaximizing
theuseofavail
abler
esources.Sequenci
nghelpst of ormt hebasisfrom
whichiti
spossibl
etoproduceutil
izi
ngthepear lchainconcept .
Benef
it
soff
lexi
ssequenci
ng
Theassembl yandpr oducti
onar easofav ari
antrichor gani zat i
onare
subjectt oconst antchanges.Bymaki ngchangest othepr oductorpr ocess,
ther equirementsf oror derpl
anni ngar econst antlybeingupdat ed.fl
exis
Sequenci ngallowst heplannert hef r
eedom t odef inerul esbasedonhow
order swer ecreated, customized, andconf i
gured.Theopt ionofcr eati
ng
newcust om rulesorgener at
ingr ulesbasedonast andar dr uleli
braryto
adaptt onewpr oduct ionconditionsisav ailabl
e.Addi ti
onal rulessuchas
distancecondi ti
onscanbeusedi nf l
exissequenci ngaswel l.Thishigher
l
ev el oftr
anspar encyandopt i
mi zedpl anningcr eatesahol istic
optimi zat
ionandr educest heriskofbot tlenecksandot herpr oducti
on
disturbances.

Theaim ofanopt imizedsequencei

st heunifor
m distr
ibuti
onoft he
assemblyoperationandt heassemblyti
me.Incont r
asttoothersoluti
ons
onthemar ket,
flexi
ssequencingsoluti
onsdef i
nesrespecti
verulesbased
onproperti
esoft hev ehi
cle(
suchasdiffer
enttypesofdr i
ve)whichcan
thenbedissecteddeeperwi t
hinafl
exissystem foranotherlev
elof
constr
aintappl
ication.
 Conti
nuouspl
anni
ngf
rom or
deranal
ysi
sandsel
ect
iont
o
sequenci
ng
 Sequencingbasedof
fofconf
igur
abl
est
andar
drul
es/
const
rai
nt
templat
es
 Rulesbasedonall
contractf
eatur
essuchascommi
tment
s,
equipmentat
tr
ibut
es,assemblyal
locat
ion
 Cal
cul
ateanexactschedul
eti
mel
i
nef
ort
hesequence
 Visual
i
zati
onofr
ulev
iol
ati
ons,
real
-t
imeupdat
est
omanual
changes
 Fi
nal
anal
ysi
sofr
esul
tswi
tht
heabi
l
ityt
ocal
cul
atemount
ing
ti
mes
  Pr
oduct
ivi
tyI
ncr
easeof2-
5%t
hroughsmoot
hingoft
hepr
oduct
ion
pr
ogr
am
 Si
mpli
fi
edplanni
ngandpost
-pl
anni
ngr
esul
tsi
na20-
60%i
ncr
ease
i
nproduct
ivi
ty
 ReducedCapit
ali
nvest
mentt
hroughl
owersaf
etyst
ock
requi
rement
sof30-50%
 ReduceRewor
k-“hi
ghpear
lchai
ngood”
,av
erager
educt
ionsof30-
50%arepossi
ble

VI
II
.DI
SPATCHI
NG
Itreferst othecont rolofprocessesofoper ationplanning,giving
oper ationor derandcont r
olli
ngoper at
ionsint hemanuf actur
ingsite.In
thiscase, anoper ati
onchart,asshowni nthef i
gure,isconsistentl
yused
from t heoper ati
onal l
ocati
ont oitscompletion, andsinceitisstucki nt
o
thecont rolboard,ast hefi
guredepicts,i
tisalsocal led"SASHI TATE
(sti
cki ng)".I
tspur poseistoimpr ovetheoper abili
tybypr operl
y
contr oll
ingthecapaci tyofdeliv
erydatemanagement .Thus,theorder
deliverydat e,stockonhand, all
ocationofwor kinprocess, operat
ion
statusofwor kersandmachi ne/equipmentar egr aspedasneeded, and
t
heoper
ati
onpl
anni
ngi
sper
for
med.
Ther
ear
etwodi
ff
erentki
ndsofdi
spat
chi
ng:
1.Cent
ral
izeddi
spat
chi
ng
Or derdispatchingt akesplacef rom acentralizedlocati
onthathas
compl et
ev iewofcapaci t
iesacr ossproductiondepar tmentandmaps
ordertot hewor kerbasedont her equir
ementofi ndiv
idualor
der.I
thas
greatercontrol,greaterfl
exibi
l
ityandef fecti
veco- ordinat
ionamong
severalfacil
it
ies.Italsohasef fectiveuti
li
zationofmanpowerandot her
resources.
2.De-
cent
ral
izeddi
spat
chi
ng
It’
sdoneatt heshopf l
oorl
evel
.Itreducescommuni cat
iongapandt i
me
tosolvedaytodaypr obl
ems.Asshopf l
oorper sonhasbetter
knowledgeaboutlocaloper
ati
on,hedi spatchesaccuratel
yand
i
ntuit
ivel
y.I
talsoreducesdupli
cati
onofdi spatchingofsameor der
.
Exampl
e:
supposet her e’sati
remanuf act
ur i
ngcompanyt hatmanuf actur
esbased
onmaket oor derst
rategy,hasgotanor derof100t i
resfrom its
dist
ributor.Ithassev eralshopfloorsthathavedif
f er
entunusedcapaci t
y.
Nowdi spatchercomesi ntoplaywhoknowsexact lywheret here’
s
suffi
cientcapaci tytofulfi
ll
theor derandhence,dispatchest heordert
o
respectiveoper ati
ngpoi nt.

Di
spatchi
ngmaybedef i
nedassetti
ngproduct
ionact
ivi
ti
esinmotion
t
hroughtherel
easeofor
ders(workorder
,shoporder
)andinst
ruct
ions
i
naccordancewitht
heprevi
ousl
yplannedti
meschedulesandrout
ings.
Di
spatchi
ngalsoprov
idesameansforcompari
ngact
ualpr
ogresswi
th
pl
annedproduct
ionprogr
ess.Di
spat
chi
ngfunct
ionsi
ncl
ude:
1.Pr
ovi
dingf
ormov ementofr
awmateri
alsf
rom storest
othefi
rst
oper
ati
onandfr
om oneoperat
iont
othenextoperati
onti
ll
all
the
oper
ati
onsar
ecarr
iedout.
2.Coll
ecti
ngtools,
ji
gsandfi
xtur
esf
rom t
ool
stor
esandi
ssui
ngt
hem t
o
theuserdepart
mentorworker
.
3.I
ssui
ngj
obordersaut
hori
zi
ngoperat
ionsi
naccordancewit
hdat
es
andti
mesasi
ndicatedi
nschedul
esormachi
neloadingchar
ts.
4.I
ssueofdrawings,
specif
icat
ions,
routecards,
mat
eri
alr
equi
si
ti
ons
andtool
requisi
ti
onstotheuserdepart
ment .
5.Obtai
ningi
nspect
ionschedul
esandi
ssui
ngt
hem t
othei
nspect
ion
sect
ion.
6.Inter
nalmateri
alshandl
ingandmov ementofmateri
alstot
he
i
nspectionar
eaaf t
ercompl eti
ngtheoperati
on,
movingthemater
ial
sto
thenextoperati
oncenterafteri
nspect
ion,andmov
ementofcompl et
ed
partstohol
dingstores.
7.Ret
urni
ngj
i
gsandf
ixt
uresandt
ool
stost
oresaf
teruse.