Evaluating demand driven MRP: a case based simulated study

This study evaluates the assumption underpinning Material Requirements Planning (MRP), buffer management and DDMRP before analysing the case company and evaluating the potential benefits, utilizing simulated data from the existing ERP system. The purpose of this research is to evaluate DDMRP in the context of improving the performance of a printing ink manufacturing company. The main issues the company is facing using a traditional MRP system include poor due-date performance, stock levels not corresponding to the actual market needs and overall system instability leading to inefficiencies. The findings indicate the potential of DDMRP to improve system stability and product availability

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

TQM in a test environment

In response to the changing aerospace economic climate, Martin Marietta Astronautics Group (MMAG) has adopted a Total Quality Management (TQM) philosophy to maintain a competitive edge. TQM emphasizes continuous improvement of processes, motivation to improve from within, cross-functional involvement, people empowerment, customer satisfaction, and modern process control techniques. The four major initiatives of TQM are Product Excellence, Manufacturing Resource Planning (MRP II), People Empowerment, and Subcontract Management. The Defense Space and Communications (DS&C) Test Lab's definition and implementation of the MRP II and people empowerment initiatives within TQM are discussed. The application of MRP II to environmental test planning and operations processes required a new and innovative approach. In an 18 month span, the test labs implemented MRP II and people empowerment and achieved a Class 'A' operational status. This resulted in numerous benefits, both tangible and intangible, including significant cost savings and improved quality of life. A detailed description of the implementation process and results are addressed

MRP-based negotiation in customer-supplier relationship

In the present uncertain context, increasing the performance of the supply chains requires to define cooperative processes between partners aiming at providing a better answer to the final customer, with a risk shared between partners. Based on an analysis of real practices, we suggest in this communication to take the MRP process as a basis for defining what could be such a cooperative process

Cost reduction using process analysis in company PEGRES obuv s.r.o.

Firma PEGRES obuv s.r.o. se již delší dobu potýká se stagnací v oblasti plánování a řízení výroby. Některé podnikové procesy jsou nyní značně zastaralé a v aktuálních podmínkách již neefektivní. Cíl práce je snížení nákladů s využitím procesní analýzy. Pro dosažení tohoto cíle bude provedena analýza současného stavu zastaralých procesů a budou popsány vybrané metody řízení výroby, které jsou svou povahou relevantní pro výrobu obuvi. Výstupem práce je sada doporučení a návrhů na změny v existujících procesech. Vybrané návrhy budou v prostředí firmy implementovány a práce zahrne zhodnocení výsledků po zavedení těchto změn.Company PEGRES obuv s.r.o. has been long time struggling with stagnation in production planning and control. Some of the internal processes are now obsolete and in current conditions no longer effective. The goal of the paper is to reduce the costs using process analysis. To achieve this goal, analysis of the current state of outdated processes will be performed, followed by description of selected methods of production management, which by their nature are relevant to the production of the shoes. Output of the work is a set of recommendations and proposals for changes to existing processes. Selected proposals will be implemented in the company and paper will include evaluation of results after the implementation of these changes.

The use of information systems for logistics and supply chain management in South East Europe: Current status and future direction

This research aims to investigate the current status and future direction of the use of information systems for logistics and supply chain management (LSCM) in South East Europe. The objectives are threefold: (1) to identify major challenges and developments on the use of information systems for LSCM by enterprises, (2) to examine the actual level of satisfaction of current policy on LSCM, and (3) to reveal the actual need of enterprises in South East Europe on effective use of information systems for LSCM. Mixed methodology of literature review and questionnaire survey is adopted in this research. Data collected from 79 enterprises are analysed using descriptive analysis in SPSS. The findings suggest that enterprises in Albania, Bulgaria, Greece, Former Yugoslav Republic of Macedonia (FYROM), Romania, and Serbia and Montenegro, face similar challenges but all are in different stages of developments of LSCM. Their use of information systems explains their heavy focus on supply chain partnership and weakness in demand chain partnership. Major findings suggest that companies and governments alike in that region do not seem to be ready for playing a significant and demanding role in global supply chains. Current deficiencies, including limited abilities in building valuable forward relations, weak strategic planning and organisation, and infrastructural problems, are major obstacles for fast development in LSCM. At the same time though, traces of changing mentalities do exist, setting the ground for improved performance and ultimately for a better position in global business

Demand uncertainty and lot sizing in manufacturing systems: the effects of forecasting errors and mis-specification

This paper proposes a methodology for examining the effect of demand uncertainty and forecast error on lot sizing methods, unit costs and customer service levels in MRP type manufacturing systems. A number of cost structures were considered which depend on the expected time between orders. A simple two-level MRP system where the product is manufactured for stock was then simulated. Stochastic demand for the final product was generated by two commonly occurring processes and with different variances. Various lot sizing rules were then used to determine the amount of product made and the amount of materials bought in. The results confirm earlier research that the behaviour of lot sizing rules is quite different when there is uncertainty in demand compared to the situation of perfect foresight of demand. The best lot sizing rules for the deterministic situation are the worst whenever there is uncertainty in demand. In addition the choice of lot sizing rule between ‘good’ rules such as the EOQ turns out to be relatively less important in reducing unit cost compared to improving forecasting accuracy whatever the cost structure. The effect of demand uncertainty on unit cost for a given service level increases exponentially as the uncertainty in the demand data increases. The paper also shows how the value of improved forecasting can be analysed by examining the effects of different sizes of forecast error in addition to demand uncertainty. In those manufacturing problems with high forecast error variance, improved forecast accuracy should lead to substantial percentage improvements in unit costs

Decision support for build-to-order supply chain management through multiobjective optimization

This is the post-print version of the final paper published in International Journal of Production Economics. The published article is available from the link below. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. Copyright @ 2010 Elsevier B.V.This paper aims to identify the gaps in decision-making support based on multiobjective optimization (MOO) for build-to-order supply chain management (BTO-SCM). To this end, it reviews the literature available on modelling build-to-order supply chains (BTO-SC) with the focus on adopting MOO techniques as a decision support tool. The literature has been classified based on the nature of the decisions in different part of the supply chain, and the key decision areas across a typical BTO-SC are discussed in detail. Available software packages suitable for supporting decision making in BTO supply chains are also identified and their related solutions are outlined. The gap between the modelling and optimization techniques developed in the literature and the decision support needed in practice are highlighted. Future research directions to better exploit the decision support capabilities of MOO are proposed. These include: reformulation of the extant optimization models with a MOO perspective, development of decision supports for interfaces not involving manufacturers, development of scenarios around service-based objectives, development of efficient solution tools, considering the interests of each supply chain party as a separate objective to account for fair treatment of their requirements, and applying the existing methodologies on real-life data sets.Brunel Research Initiative and Enterprise Fund (BRIEF

Challenges and influential factors in ERP adoption and implementation

The adoption and implementation of Enterprise Resource Planning (ERP) systems is a challenging and expensive task that not only requires rigorous efforts but also demands to have a detailed analysis of such factors that are critical to the adoption or implementation of ERP systems. Many efforts have been made to identify such influential factors for ERP; however, they are not filtered comprehensively in terms of the different perspectives. This paper focuses on the ERP critical success factors from five different perspectives such as: stakeholders; process; technology; organisation; and project. Results from the literature review are presented and 19 such factors are identified that are imperative for a successful ERP implementation, which are listed in order of their importance. Considering these factors can realize several benefits such as reducing costs and saving time or extra effort