Search Results for: supply-planning

… stock cannot rationally be calculated in isolation from other factors in the supply chain.
How is it nearly always calculated (when it is calculated at all)? That is right, in isolation for each product location. 
Our Solution
Having found the problems with safety stock management consistent over decades of reviewing supply planning systems, we developed a modification to the standard safety stock formula that works much better. However, calculating a safety stock for a product location in isolation of all the other product locations makes no sense.
Getting the Overview of Safety Stock as Integrated with Other Factors
Safety stock …

… external supply planning system.
Most order sizing placed into ERP and other supply planning applications has been placed there, not based upon calculations.

This leads directly to the next point: executive decision-makers understand what MRP systems do and what they don’t do.
Misunderstanding of What MRP and External Supply Planning Systems Do
One of the most significant areas of a misinterpretation of supply planning software is that it is frequently thought that MRP or external supply planning systems optimize these parameters.
They do not.
Let us review what they do concerning order sizing specifically.

These applications rely upon …

… have no systematic way to constrain their supply plan.
ERP systems allow for capacity leveling but not for constraining.
Even companies that do have specialized supply planning systems, the complexity of setting up constraints in those systems (often combined with the difficulty in getting constraint data) means that, indeed, constrained supply planning is quite rare. That may seem a contradictory statement, as supply chain planning vendors have promised constraint-based planning. Still, this observation comes from observing many projects and conferring with other technical resources focused on optimizing supply planning.

An Overly Complicated Approach
Most of the applications that offer …

… to be integrated into the ERP system or external planning system because its use is a periodic process.
Third, Brightwork Explorer works off of simple files that can be easily exported from any ERP system.
Brightwork Explorer is minimally invasive. It will change fields in your ERP system that control supply planning. It will give you the information you need to improve your existing forecasting system.

Eventually, a simple adapter can be created, but nothing can prevent your company from using Brightwork Explorer within weeks of gaining access. Unlike many applications that pretend to be multi-tenant SaaS, Brightwork Explorer …

… S&OP.

Putting together spreadsheets is a lot of work and does not work very well as one is limited by the spreadsheet’s power versus an application.
Applications in S&OP tend to be complex and single-purpose, so that they only do S&OP.
The standard demand and supply planning applications normally cannot do S&OP.

So the company is caught between using straightforward spreadsheets versus high effort specialized S&OP applications.
Getting Inventory, Service Level, S&OP All from One Source
Brightwork Explorer is multi-purpose. It calculates forecast error, sets inventory parameters in conjunction with service …

… Explorer Score. After you have determined your score, move to the Brightwork MRP Explorer to improve your score by making changes to service levels, days of supply, and MRP parameters.
What Are MRP System Parameters?
Supply planning or MRP system parameters are found on the product/material/location master within supply planning applications. Examples of supply planning or MRP system parameters are:

Reorder Point
Lot Size
Planning Time Fence
Rounding Value
Safety Stock

Sometimes people will refer to these values as MRP system parameters. They apply to any supply planning method used.
What Do Books Say About Setting MRP System …

… is declared either forecastable or not forecastable. The overall database is given a forecastability score base upon combining the individual product location combinations. This is something we address in the Brightwork Explorer. The main focus of Brightwork Explorer is segmenting the product location database to treat different segments differently in supply planning.
Our Approach
Our approach is to always start from a quantitative analysis and then to apply codes the product location database (which is kept externally to the system). Then the logic is understood for how each product location combination is assigned to being forecasted or not forecasted.

We …

… attention. 
Tests like this can be performed repeatedly to ensure the best forecast is being applied to the product locations.
It is critical not to confuse performing a forecast at a level of aggregation by measuring the forecast. Measurement must be at the lowest level or the level pertinent to supply planning. The supply planning process is the “customer” of the supply chain forecasting process.
Problem #1: Reporting Forecast Accuracy at a High Aggregation than the Product Location Combination
Companies will often say that they are reporting forecast error at an aggregation (product family, product group, etc..) because it reduces …