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Lecture Manufacturing planning and control for supply chain management (6/e) - Chapter 2: Demand management

Lecture Manufacturing planning and control for supply chain management (6/e) - Chapter 2: Demand management. This chapter presents the following content: What is DM? benefits of DM, role of DM, shaping DM to match the manufacturing environment, information and DM, day-to-Day DM, Principles. | Manufacturing Planning and Control MPC 6th Edition Chapter 2 Demand Management The Demand Management (DM) process determines how a firm integrates information from customers (both internal and external) into the MPC system. Activities include demand determination, converting customer orders into delivery promises, and balancing supply with demand. Agenda Demand Management in MPC Demand Management in the MPC System Resource Planning Sales and operations planning Demand management Master production scheduling Marketplace (customers and other demand sources FRONT END MPC Boundary Planning and Control Demand management coordinates demand quantities and timing with the planning and control activities of the company Planning occurs mainly in the SOP module Control determines how capacity will be converted into products Execution The company executes the plan as actual demand information becomes available The control function determines how the plans will be modified to accommodate forecast | Manufacturing Planning and Control MPC 6th Edition Chapter 2 Demand Management The Demand Management (DM) process determines how a firm integrates information from customers (both internal and external) into the MPC system. Activities include demand determination, converting customer orders into delivery promises, and balancing supply with demand. Agenda Demand Management in MPC Demand Management in the MPC System Resource Planning Sales and operations planning Demand management Master production scheduling Marketplace (customers and other demand sources FRONT END MPC Boundary Planning and Control Demand management coordinates demand quantities and timing with the planning and control activities of the company Planning occurs mainly in the SOP module Control determines how capacity will be converted into products Execution The company executes the plan as actual demand information becomes available The control function determines how the plans will be modified to accommodate forecast errors and other changes in assumptions Most control functions are located in the MPS module Independent versus Dependent Demand The source of demand determines its type Independent – Customer demand that is not directly influenced by the actions of the firm (e.g. customer orders) Dependent – Demand that is driven by the plans and activities of the firm (e.g. components, warehouse demand) Demand Management and MPC Environment DM must conform to the strategy of the firm, capabilities of manufacturing, and needs of customers These define the MPC environment MPC environment is defined by customer order decoupling point The point where demand changes from independent to dependent Alternatively, order penetration point Make-to-Stock Customer demand is filled from finished goods inventory (cosmetics, grocery items) Key focus of demand management is maintenance of finished goods inventories Physical distribution is a key concern Assemble-to-Order Customer requirements are met by a combination