Two main sides to business o 1 Demand Sales and Marketing responsible for forecasts affecting customer behaviors getting orders for products or services and o 2 Fulfillment Operations and Supply Chain Management responsible for making and delivering products and services Accounting is the function that coaches and keeps score for the business through profit and cost analysis The transformation process within the supply chain creates wealth This includes conversion of raw materials into saleable products and services Know that there are three elements that transfer between members of a supply chain 1 Inventory 2 Information and data and 3 cash Know the difference between the reference of upstream versus downstream in supply chain management ERP came about in the early 1990 s Supply Chain Management was developed formally in late 1990 s Ownership of the Demand Planning Process should belong to the top management of Sales and or Marketing usually at the Vice President level Careers in OSCM Operations and Supply Chain Management don t memorize them all just have a good feel for what is in that space Understand what some of the main ones are It usually includes jobs in Quality Process or Manufacturing Engineering Purchasing Materials and Inventory Planning Scheduling Production Management Logistics Warehousing etc Know that APICS is the premier professional group in the Operations and Supply Chain Management space 80 of volume is almost always 20 of the items SKU stock keeping units offered in a firm o Mission this answers the questions what are we in business for What s important Definitions to the business o Corporate Strategy long term direction defines what the objectives for growth and sustainability in the future are and o Business Imperatives short list of top priority goals that must be done in next 12 months Core competency Skills that define the business Unlikely to subcontract these operations or processes Know the concept Order winning versus order qualifiers Quality is often the example of an order qualifier in today s markets Understand the impact of demand variation on Operations Management requires buffer inventory buffer capacity or capacity flexibility to offset variation if high levels of customer service are to be expected Know what the two most important metrics for operational performance are 1 Customer Service and 2 Cost Quality is a prerequisite to both of those metrics being successful Know that good management systems include 1 good process design 2 accountability to the process and 3 metrics results These are designed to monitor various processes in the business and can be daily i e daily schedule review or weekly i e Weekly Performance Review or monthly S OP management system in this course is synonymous with accountability infrastructure Also know that good process design deteriorates over time unless there are management systems accountability infrastructures in place to create process accountability S OP is a risk management process for the planning horizon of demand and fulfillment agreements It s the handshake between demand and fulfillment at the top management level Understand the main trade offs in Operations Management i e customer service and cost inventory buffer and cash capacity cushion and cost leap frogging capacity needs in large increments versus small incremental growth strategy etc See the slide with the two approaches to growth build big from the beginning or add capacity as the business grows Understand businesses having time based strategy but also knowing that the market need today often requires businesses to be agile Most companies are asking suppliers for shorter lead time Customers are asking for broader scope of product configurations Know what the balanced scorecard is and how it helps organizations do strategic planning don t have to memorize the details of it but should know the 4 main or major elements Financial Customer Learning and Growth and Internal Processes Have familiarity with the simple Operations ERP business planning model Know that the Business Planning feeds into the Demand Plan and Production Plan Know that the Demand Plan feeds into the Production Plan and not the other way around Know that forecasting is needed to manage Operations Know the ERP is process design as well as process integration to manage all of the resources of an organization even though the business planning software tool is sometimes referred to as ERP ERP is not just software Know that forecasts are not perfect Sustainability Managing resource to make sure they are available for future generations Understanding the effects of sustainability on markets and on operations management Demand Plan inputs Business Plan Marketing Sales History and outputs direct to Production Plan and a reference link to Master Scheduling See Operations ERP business planning model Time series analysis concept sequential data and pattern components 1 trend 2 cyclical 3 seasonal and 4 irregular Don t memorize these just be familiar with the concepts of each pattern Simple moving average know concept and how its calculated Weighted moving average know concept and how its calculated Exponential smoothing know concept and how its calculated Choosing alpha experience and trial and error Seasonality and effect on forecasting know the concept Seasonality can happen any time in the 4 quarters of a year but must demonstrate repeated demand surges and dips in the same quarters year after year MAPE Mean Absolute Percentage of Error concept Qualitative versus Quantitative techniques and the importance of both Collaborative Planning concept Think of the ACCO speakers as a perfect example Pyramid Forecasting concept Very common Be familiar with the concept of causal effects on forecasting such as drought causing certain demands for products or economic factors affecting demand Likely partnerships within the supply chain only a small percentage of suppliers of a customer will enter into a partnership level of data exchange and close process integration There is a target style graphic in the Chapter 8 slides that was presented in class Partnering with the supply base usually does not include more than 25 30 percent of the total supplier base Scalability Key term Flexibility and readiness of capacity for changes Know what the Delphi method of forecasting input is and that it is a survey system using experts in the particular market being forecasted Know conceptually what an A3