UGE Notes - General Logistics PDF

**[General Logistics ]** **[Introduction (Class 1)]** 1. Lectures : 5 ECTS , Labs : 2.5 ECTS 2. Written Exam: 2/3 % , Group Projects : 1/3 % , Bonus 1/3 by scoring 70% on the bonus assignments 3. Bonus Assignments: 2 HW Assignments, 3 Quizzers (Lecture) 4. Group Project: Main Project (5...

**[General Logistics ]** **[Introduction (Class 1)]** 1. Lectures : 5 ECTS , Labs : 2.5 ECTS 2. Written Exam: 2/3 % , Group Projects : 1/3 % , Bonus 1/3 by scoring 70% on the bonus assignments 3. Bonus Assignments: 2 HW Assignments, 3 Quizzers (Lecture) 4. Group Project: Main Project (50%) , Excel HWs (30%), Assignments (20%) 5. Pencil 6. Cedar Logs(Northwest, US), Graphite (Sri Lanka), Rapeseed oil (Indonesia), Zinc and copper(China), Castor beans(East Africa), Pumice (Italy), Sulfur chloride (), Aluminum (China), Candelilla Wax (Mexico) 7. Clay (Mississippi), Aluminum Hydroxide 8. Eraser, Lead, Labelling, 9. Right : Objects, Quantity, Place, Time, Quality, Cost, "Customer" 10. Logistics : Product and Information Flow 11. Supply Chain Management: Product, Information and Monetary Flow **[Class 2 ]** 1. Supply chain is a network of companies coming together to make a product or service 2. Supply chain management: more than 2 companies/ everyone in the supply chain. 3. Logistics: Within a company/ between 2 companies 4. Trade-off = Opportunity Cost. \| system thinking = total cost orientation ( all related to tradeoffs ) 5. **Logistics** -- it is all about optimizing, planning, controlling, efficiency and maintaining material and information flow. 6. The goal of logistics (6 R's) is to deliver the right objects in the right quantity to the right place at the right time in the right quality for right costs. 7. **Supply chain management** -- covers the integrated planning and control of all the goods, information and monetary flows along the complete value-added chain from the supplier's supplier to the customer's customer **[Procurement Logistics:]** Orientation, Objects, Functions, Processes 1. Orientation: relation with the suppliers, connection between suppliers and the company 2. Objects: raw material and semi-finished products 3. Functions: Obtain the most suitable goods and services at the most reasonable prices, delivered when and where required 4. Processes: Market research/requirements planning , make or but decisions, supplier management (selecting a supplier), ordering, order controlling **[Production Logistics ]** 1. Orientation: connection between procurement and distribution logistics 2. Objects : semi-finished goods in the process of value adding 3. Function : use the available production capacities, produce the products needed in distribution logistics 4. Processes : organizational logistics, layout planning, production planning and control 5. Activity : More products made in less time, % of defects, less cost, % of usage of raw materials, maintenance of machines, fulfil the order on time. 6. **Targets for production** : Short throughput Time(1), High Due date Reliability(1), Low Inventory Level (2), High Utilization of available resources(Human and Machines)(High-Capacity Utilization)(2). (1. Logistics Performance ; 2. Logistic Costs)\ \ \*short throughput time (time to produce product)\ \* high due date reliability (finishing in time)\ \*low inventory level\ \* high capacity utilization (overall working of machines and stuff) **[Distribution Logistics ]** 1. Orientation: reaching the customer 2. Object: Finished goods 3. Function: Ensuring the current management of goods from the end of the production line to the customer. 4. Processes: Order processing, Warehousing, Transportations. 5. [**production** **≠** **consumption**]{.math.inline} **(Place, Time, and Quantity)** 6. Criteria to evaluate different Distribution Network: Cost, Time, Environment 7. Picking: Finding and selecting products from the warehouse: barcode, pick-by-voice, pick-by-sight. (Commissioning systems) 8. Packaging: optimize quantity and quality of package material 9. Storing: use of different storing systems (e.g., high rise racks) 10. Transportation: Road, Airway, Water, Railroad 11. Freight Transport System 12. Intermodal Transport: The movement of goods in one and same loading unit or vehicle which successfully uses several modes of transport without **[Disposal Logistics (удаление)]** 1. Orientation: change in the direction of the flow of objects\ \* Disposal logistics, often referred to as reverse logistics or reverse supply chain, is the process of managing the return, recycling, and disposal of products or materials after they have reached the end of their useful life or have become obsolete. 2. Object: spatiotemporal transformation of the remainders and waste (solid, liquid) as well as used and used-up products, returned empties, containers, and wrappings. 3. Function: Reduce logistic costs, enhance, service, and save natural resources 4. Process: Procurement, Production, Distribution Disposal 5. Example: Remainders and waste, returned emptied, wrappings **[\ \ \ After sales Logistics]** 1. Orientation :Provide services to the customer after the delivery of the product 2. Object :Spare parts 3. Function :Ensuring the lifelong use of the product 4. Processes : Returns, repairs, spare parts distribution 5. Spare parts distribution network **[Contract Logistics]** 1. Outsourcing to another logistic company -- an activity 2. Reasons of outsourcing : concentrate in core competencies, increase in flexibility, use experience , cost reduction 3. Special form of outsourcing logistics 4. Based on sustainable, work-sharing co-operation between the company, which is outsourcing, and the logistics service supplier based on an individually negotiated long-term service contract. - 4 Party Logistics 5. First (1PL): Cargo owners 6. Second (2PL): Prime Assets provider 7. Third (3PL): Performs large part if a company's supply chain 8. Forth (4PL): Logistics integrator or "Lead Logistics Provider" 1. Cost of material/production(20%) 2. Quality of products (45%) 3. Transport (Distance)(Time) (5%) 4. Reputation (20%) 5. After sales service (10%) **[Class 3 (Purchasing, Sourcing and Procurement)]** 1. Mean([*Μ*)]{.math.inline}, Standard Variation([*σ*)]{.math.inline}, Coefficient of Variance (CoV) (Mean divide by Standard Variation \* 100%) **[Purchasing ]** 1. Orientation: relation with the suppliers; connection between suppliers and company. 2. Objects: Raw material and semi-finished products (externally produced parts) 3. Function: Obtain the most suitable goods and services at the most reasonable contract prices, delivered when and where required 4. Core Processes: Market research/ requirements planning -- make or buy decisions -- supplier management -- ordering -- order monitoring 5. **Two key elements of purchasing: 1)Strategic Sourcing 2)Operative Procurement** 6. The main goal of purchasing is to obtain the most suitable goods and services at the most reasonable contract prices, delivered when and where required **Strategic sourcing**: finding, selecting , contacting and contracting suppliers **operative procurement**: ordering , expideting , follow up **[\ ]** **[Material Categorization ]** **[ABC analysis :purchase volume value \* quantity]** 1. 'A' being the most important, and 'C' being the least important 2. May consider -- more emphasis on supplier development for 'A' items, Tighter physical inventory control for 'A' items, More care in forecasting 'A'' items. 3. Steps for using the matrix - 1) List all purchases in descending order 2) Analyse the risk and market complexity of each purchase 3) Position each item on the matrix accordingly 4)Periodically, decide whether or not to move a particular 5) purchase to an alternative quadrant. 4. Steps -- Find Absolute Demand, Order the Absolute Demand in descending order, Find relative demand, Find Cumulative Percentage, Decide of Threshold Value, Categorize each product to ABC based on Threshold Value. 5. Products are classified according to their importance(value \* quantity) for company\ \ \ m\ \ \ **[XYZ Analysis -- Constant ability]** 1. 'X' having most stable/constant consumption, rare fluctuations, sold regularly 'Y' usually are trend moderated or seasonal reasons (Stronger fluctuations)and 'Z' being completely irregular consumption. 2. Use CoV to express the predictability of demand. 3. Steps : Input Data -- Calculate (Mean([*Μ*)]{.math.inline}, Standard Deviation([*σ*)]{.math.inline}, CoV) -- Order the CoV in ascending order - Decide of Threshold Value - Categorize each product to XYZ **[Kraljic Portfolio Matrix (Profit Impact and Supply Risk) ]** The Kraljic Portfolio Matrix is helpful in positing commodities/supplies according to four matrix quadrants\ \* The Kraljic Portfolio Matrix aims to guide managers so that they can recognize the weakness of their organization and formulate strategies for guarding against supplies disruption. 1. Profit Impact -- Volume purchased, Percentage of total Cost, Impact on product quality or business growth. 2. Supply Risk -- Availability, Number of suppliers, Competitive Demand, Make-or-buy opportunities, Storage Risks, Substitution opportunities. 3. Matrix Axis -- Y: Profit Impact, X: Supply Risk. 4. 2 High -- Strategic Items, Y high: Leverage Items, X high: Bottleneck Items, 2 Low : Non-Critical Items. **[(Strategic Items)]** 1. Exploit, Balance and Diversify **[Exercise ]** 1. Easy to find and arrange when needed, identify, and eliminate expired materials. Helps with the strategic sourcing and operative procurement decisions. 2. Stages of Production, Conditions needed of the parts/material, Product group, based on importance. **[Exercise 2 ]** 1. Strategic: Engine, Gear Box, Fuel Supply System 2. Bottleneck: Electronic Sensors 3. Non -- critical: Audio/Video Devices, Windscreen and Glasses, Battery 4. Leverage: Steering Systems, Braking Systems, Carburetor **[Exercise 3 ]** 1. Single Sourcing: Reliable Relationships, Supply Risks, Economics of Scale (Buying in large bulk), 2. Multiple Sourcing : Lower risks, Inconstant Quality, Higher cost (Price and Transport), Taxes and Tariffs, Delivery Time, Easier for Marketing (More connections), Communication Problems. **[Exercise 4]** 1. Strategic : Single and Local (preferred)/Global, Single and Dual Sourcing 2. Bottleneck : Single/Multiple(preferred) and Global 3. Non -- critical : All is possible (which one has lower cost) 4. Leverage : Multiple and Global **[\ ]** A close-up of a chart Description automatically generated**[\ \*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*helps us to make decisions \*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\ Class 4 ]** **[Global Sourcing ]** 1. Benefits : Decrease purchasing costs (lower wages, machine hours and international taxes), Increase of revenue by local contents clauses, Improved market transparency and technology access, Entrance to new sales markets \-\-- Obtain Competitive Advantage 2. Risks: Total cost of ownership (Inclusion of additional costs necessary {packing, customs, transportation, storage, etc.} , Transportation risks, Quality Risks, Exchange rate fluctuations, Know-how loss, Communication barrier. \-\-\-\-- Risk Management 3. Barriers of Global Sourcing : Trade Barriers, Information Problems, Currency Volatility, Local Issues, Time Issues, Relationship Issues , Customs and Taxes, Climate Issues. 1. Cost reduction by standardization and scale effects 2. Reduction of transaction cost 3. Simple realization of quality standards 1. No competitiveness between suppliers 2. Strong dependency and procurement risk 3. Low innovation potential 1. Low switching costs 2. Competition among suppliers 3. Improvement of innovation potential 4. Decrease of purchase prices 1. Coordination and communication efforts 2. Difficult to establish standards and constant quality level **[Parts Sourcing ]** 1. Parts Sourcing : Before supplier to manufacturer. Now : Module or System Supplier in between. 2. Multiple components supplier 3. Multiple unstructured single deliveries **[Modular Sourcing ]** 1. Module supplier 2. Structured deliveries of the modular suppliers - Parts sourcing involves procuring individual components or parts separately. - Modular sourcing involves procuring pre-assembled modules or units. " Components and systems procurement are simplified and standardized to manage the growing number of variables and procurement quantities." **[Requirements on Module and System Suppliers]** 1. Resource and Development Know-how 2. Track and constant delivery reliability 3. Constant high product quality and accomplishment of quality tests 4. Just in time (JIT) competency 5. Use of latest information and communication (I&C) technology 6. Production facilities in physical closeness to sub-suppliers **[Competitive Bidding and Negotiating ]** 1. Competitive Bidding: Volume is sufficiently high, Specifications or requirements are clear to the supplier, Marketplace is competitive, Buyer receive bids only from technically qualifies suppliers, Adequate time is available for suppliers to evaluate the request for Quotation (RFQ), Buyer does not have preferred supplier 2. Negotiating: Any criteria for competitive bidding are missing, the purchase requires agreement on wide range of performance factors other than price alone, The buyer requires early supplier involvement, The supplier cannot determine risks and costs before contract is awarded, The supplier requires substantial lead time to develop and produce the requested items. **[Supplier Evaluation / Make or buy decision.]** **[Criteria ]** 1. Core competences/ core strategy 2. Amount and regularity of requirements 3. Production capacity 4. Autonomy 5. Market power 6. Costs 7. Capital requirements **[Decision making methods]** 1. Break even Analysis 2. Make-or-buy Portfolio 3. Investment Appraisal 4. Cost-Benefit Analysis **[Reasons for In House Manufacturing ]** 1. **Cost Efficiency:** In-house manufacturing is cheaper than outsourcing. 2. **Expertise and Resource Utilization:** It boosts product knowledge and optimizes machine use. 3. **Overhead Cost Management:** Improved capacity utilization helps cover overhead costs. 4. **Precision Control:** In-house production ensures precision for complex products. 5. **Control Benefits:** It enables better control over changes, inventory, and procurement. 6. **Transport Challenges:** Products are difficult or costly to transport. 7. **Secrecy:** Protects confidential designs or manufacturing methods. 8. **Independence:** Reduces dependence on external procurement sources. **[Reasons for Outsourcing ]** 1. **Cost Efficiency:** Outsourcing manufacturing is cheaper than in-house production. 2. **Resource Constraints:** Lack of space, resources, time, or skilled personnel hinder new manufacturing methods for a product. 3. **Unattractive Investment:** Small lot sizes or insufficient capital make in-house manufacturing unappealing financially. 4. **Risk Management:** Outsourcing prevents capacity risks due to fluctuating market demands. 5. **Technology and Resource Advantage:** No need for special technologies or tools favors outside manufacturing. 6. **Patents or Business Ties:** Outside manufacturing can benefit from existing patents or business connections. [ **Cost Benefit Analysis** ] 1. The cost benefit analysis is an instrument of decision making which can be used in all types of decisions 2. Advantage : it makes subjective decisions objective, structural decision-making process in groups is possible, 'in addition to quantitative data, qualitative data is also considered as target criteria(measured of data that cannot be quantified is possible)', it makes the decision-making process more traceable/documented. 3. Steps : definition of different alternatives, collection of assessment criteria, evaluation of the different criteria, pairwise comparison of the criteria, evaluation of the suggested solutions, Identification of the part and total utility values (weighting factors \* points{each and find sum of all products}) **[Class 5]** **[Supply Relationship Management ]** 1. Problem of inventory: Capital Tied-up cost, Warehouse cost (space cost) \*Benchmarking -- look around what is happening around **[Transactional Purchasing ]** 1. Focus on short discrete purchasing 2. Short term orientation 3. Arm's length 4. Simple buyer seller relationship 5. Emphasis on price, quality, and delivery in the offered product. 6. No innovation 7. Moderate supplier contact 8. Little sharing of information ; opaqueness 9. Reverse auctions may be applicable **[Relationship Purchasing ]** 1. Focus on supplier relations 2. Long term orientation 3. Closeness 4. Complicated, including internal relationships 5. Emphasis on improving price, quality, delivery, and other factors, such as innovative design as a collaborative exercise between purchaser and supplier 6. High level of supplier contact 7. Significant sharing of information, including cost information ; transparency 8. Reverse auctions generally not applicable. **[Relationship formation : Stages of Supplier Integration ]** 1. One-night stand : Competitive Leverage -- Bids. Tenders and tactical negotiation on an ongoing basis 2. Regular date : Preferred Suppliers -- Proven track record in quality, delivery and cost, hence smaller supplier base, less frequent bidding 3. Going steady : Performance partnerships -- Benchmarking still applied to assess value but now joint definition of improvement plans and priorities, joint supplier and purchaser fusion teams with specific improvement objectives, some job rotation 4. Living together : Strategic Alliances -- Single sourcing are joint investment strategies ; interdependence becomes driving force 5. Marriage : Co-business integration -- Core competences totally aligned, such that rationalization will release added value. **[Cox Model ]** 1. Adversarial -- Arm's length 2. Preferred suppliers -- Partnership Relationship 3. Single sourcing -- Partnership Relationship 4. Network Sourcing -- Partnership Relationship 5. Strategic alliances -- Partnership Relationship 6. Internal contracts (mergers, acquisitions) -- Core competencies **[The Bensaou Model ]** X = Specific Investments of supplier, Y = Specific investments of buyer **[Captive buyer (Y high)]** 1. Products are technically complex 2. Market has few suppliers, stable demand, and no growth 3. Suppliers have high bargaining power, are the technology leaders, and Buyer demands on capabilities of supplier **[Strategic partnership (Both High)]** 1. Products are customer tailored, have technically complex parts of system/engineering based (suffer various changes in product design) 2. Market is competitive with high demand and high growth 3. There are many suppliers with various products and require high technological standard **[Market Exchange (Both Low)]** 1. Products are highly standardized, high-tech products (suffer few changes over time). They have simple products and production process, therefore nearly no engineering required. 2. Market is stable or decreasing demand, and it is a competitive market with many suppliers. 3. Suppliers have low bargaining power and changing costs, and not a technology leader **[\ Captive Buyer (X High)]** 1. Products are technically complex and requires significant engineering, also uses supplier-developed new technology. 2. Although the market is strongly growing and highly competitive, but it is unstable with shifts between suppliers. 3. Suppliers have high technological standard, low bargaining power and high financial potential for R&D.\ \ \ A diagram of a product model Description automatically generated **[Operative Procurement ]** **[Operative Procurement Models for Delivery ( the linking to the abc/xyz) is important\ ]** **[Sourcing on Demand]** 1. Order related job production (single item) 2. Unsteady, sporadic demand 3. Order only with customer demand -- long replacement times. **[Production synchronous delivery]** 1. Demand-oriented delivery 2. Production plan of customer determines delivery frequency and quality. **[Stock holding ]** 1. Customer and procurement markets are decoupled by buffers 2. High material availability -- bulk discount 3. High capital commitment, stockholding costs and risk. **[Stock-keeping in Procurement Process : Six standard Procurement Models ]** **[With Stock-holding ]** [ ] **[Procurement with stock-holding at customer]** - Procurement on stock -- complete processing of procurement by customer, stock keeping by customer. **[Procurement with stock-holding at supplier or service provider]** - Standard parts management -- complete processing of procurement by service provider (outsourcing) ; allocation of material on site of usage by service provider. - Consignment concept -- contract for stock-keeping of supplier or service provider at customer ('on site') ; customer controls inventory - Warehouse concept in contract -- contract for stock-keeping at supplier or service provider ; required time delivery on call. **[Without Stock-holding ]** **[Customer order related procurement]** - Sourcing on demand -- require time procurement for sporadic individual requirement - Production synchronous delivery -- supply chain without inventory buffer between supplier and customer because of cycle time based production processes ; process controlling by automatic call-up **[Impacts of Procurement Models on Function and Location of Stock Keeping ]**  **[Procurement on stock ]** Double Inventory needed (supplier and customer) -- Double cost **[Consignment Concept]** Supplier in charge for the customer's warehouse **[Prerequisites for Production Synchronous Delivery ]** - Partner-like relationship - Framework agreement - Flexible demand management system - Regularly advance information - Quality management (usually accomplished by supplier) - Exploitation of rationalization potentials by means of - Experience growth - Mutual improvement of processes and product **[Just In time Delivery (JIT)]** - Continuous material and information flows along the value adding chain - Inventory carrying cost planning - Require quality assurance in the production process - Period-oriented delivery - Arrangement of the production according to the flow principle - Staging of production factors at the point of time they are needed in production **[\ \ Aims ]** **\***Exact demands realization of internal and cross-enterprise exchange of goods \* customer-oriented and cost-efficient production **[Adv]** 1. Reduction of parts inventory along the value adding chain. 2. Avoiding of redundant quality controls 3. Avoiding of additional handling efforts 4. Close collaboration between suppliers and manufacturers necessary 5. Reduction of throughout times **[Dis]** 1. Breakdowns can have an impact on many parts of the value adding chain 2. Organization of appropriate freight carrying or forwarding concepts **[Just in Sequence Delivery (JIS)]** - Vendor parts are assembled and delivered with a minimal advance time directly to the assembly line with the right model and sequence according to the customer requirements. - Demand orientated - Integration of suppliers from the pre-assembly to the crisis management, therefore suppliers have to located with the spitting distance of the production with their own manufacturing plant or storage\ \ Aims of JIS delivery:\ **- exact demands realization of internal and cross-enterprise exchange of goods\ - customer-oriented and cost-efficient production** **[\ ]**A diagram of a diagram Description automatically generated**[\ \ Production Logistics ]** **[Introduction ]** Need to consider: Material Flow-orientated layout ; Production planning and control ; Materials planning and order management, information flow Targets for production: Short throughput Time(1), High Due date Reliability(1), Low Inventory Level (2), High Utilization of available resources(Human and Machines)(High-\ Capacity Utilization)(2). (1. Logistics Performance; 2. Logistic Costs)\ \ \ Manufacturing Tetrahedron: Cost, Time, Quality, Flexibility **Production logistics**: includes the planning, control , accomplishment and monitoring of material as well as information flow from the supplier to the final production stage.  **[Manufacturing system ]** - A complex arrangement of physical elements such as, 1. Machines for processing 2. Tooling (fixtures, dyes, cutting tools) 3. Materials handling equipment (which includes all transportation and storage) 4. People (operators, workers, associates) **[Input ]** - Materials - Sub-assemblies - Energy - Demand - Information from design, purchasing, production control, etc. **[Output]** - Good products, parts etc. - Information - Service to customer - Defectives, scrap **[Decision Horizons in Manufacturing Systems ]** Long term: Manufacturing system design -- design of process structure, equipment quantities, equipment layout. Medium-term: Manufacturing system planning (Production Planning and Control){PPC} - production planning, master scheduling, material requirements planning, capacity planning Short-term: Manufacturing system control. (Production Planning and Control){PPC} -- scheduling, dispatching, shop floor management. **[Manufacturing System Design (MSD)]** MSD is the mapping from performance requirements onto suitable values of decision variables, which describe the physical design of the manufacturing system. It consists of a set of long-term decisions that affect the production facility for years. **[Relation between Product Design and Resource Design ]** ***[Product design]*** - Determination of product: types, variety, structure, materials. ***[Process planning]*** - Determination of manufacturing operations: types, tools (which machines) ***[Resource design ]*** - Determination of resource : types, amount **[Machine Requirements Problem]** X = (t min/60min) \*(P/hu) \*(required products \*production time on machine)/ available hours on machine X = Required number of machines T = standard time for operations in minutes P = Total number of production units required per day H = Standard number of hours available per day per machine U = Efficiency of machine (%) **[Template shuffling Approach to the Resource Layout Problem]** - A manual method - A number of templates (geometric replicas of machines, material handling units, etc.) arranged by trial and error on the pre-specified floor area of the facility - The most widely used of all the resource layout formulations in industry - Not amenable to automatic solution because it is not well structured and layouts must be ranked by visual inspection **[Relationship Chart Approach to the Resource Layout Problem]** - Qualitative formulation - Gives the desirability of having each pair of resources adjacent to each other. - Desirability is usually expressed in a letter code - Codes are transformed into numerical ratings - The objective is to find the layout with the highest score A : Absolutely essential that two departments be located adjacently (4\^3) E : Essential that two departments be located adjacently (4\^2) I : Important that two departments be located adjacently (4\^1) O : Marginally beneficial that two departments be located adjacently (4\^0) U : Unimportant that two departments be located adjacently (0) X : The two departments should not be adjacent (-4\^5)**[\ \ ]**A diagram of a diagram Description automatically generated**[\ \ \ \ The Material Flow problem ]** - Type of the Material handling system - Configuration of the material handling system ***[Decision Variables]*** - The travel aisle layout - The number and the locations of the pickup and delivery stations - The pattern of material flow within the travel aisles (unidirectional, bidirectional or combinations) - The number of vehicles required - The routes used by vehicles during specific operations - The dispatching logic used during operation - The storage capacities of pickup and delivery stations  \+ **[Class 6 ]** **[Production Planning and Control (PPC)]** The core function of this is to allocate items (products, material) and resources (human labour and production facilities) to orders in terms of **time and volume**. - Delivery point of view : delivery date must be planned (volume and time limit) - Scheduling point of view : resources and material must be planned (volume and time limit) - Efficient production planning requires the coordination of demand and supply across departments , companies. **[General Terms of Planning]** 1. Horizon -- period of time for which the planning is valid 2. Frequency -- number of planning executions per unit of time with constant planning horizon 3. Planning unit -- fractions of time in which the horizon is split (can be identical with frequency ) 4. Closing date -- the day from which on the planning is valid 5. Duration -- span if time which is necessary to create a plan 6. Object -- subject of the planning **[Rolling Horizon Planning ]** Frozen Period -- Roll Period, a period where everything still remains the same **[Planning Units]** Closing date, planning horizon, planning frequency, planning unit, time **[MRP II]** Diagram Description automatically generated Diagram Description automatically generated  In summary, **dispatching** focuses on determining the order in which machines or work centers should handle production tasks, while **shop floor management** involves overseeing the machinery\'s operational status, including handling machine breakdowns, maintenance, and ensuring smooth production flow on the shop floor. Both aspects are critical for efficient manufacturing operations. **[Demand Forecasting ]** - The process of estimating future demand - Forecast are a prerequisite for every planning process if the future demand is uncertain, because planning can only be carried out on the basis of known or assumed quantities - Forecasting is done using a forecasting technique, which is systematic procedure for forecasting demand according to a particular model Diagram Description automatically generated **[3 Laws of Forecasting]** 1. Forecasts are always wrong -- only estimated value, not actual 2. Detailed Forecasts are worse than aggregate forecasts -- less variability of results 3. The further into the future, the less reliable the forecast will be. **[Types of Forecasting techniques ]** 1. Historically forecasted techniques - Quantitative techniques -- moving average, exponential smoothing, regression - Qualitative techniques -- manual forecasting ("eyeballing")(estimate roughly if you sent yesterday 10 you will send 10 tomorrow) 2. Future orientated techniques - Quantitative techniques -- extrapolation(analyse) from known demand , the iphone from pre orders in which you can quantify the small portion of data that u received and translate it to how will they behave. - Qualitative techniques -- Delphi method(tool you can use to combine all opinions), Surveys among customers and/or industry experts.( which colour will be trending next season ) u ask some experts **[The method of the Moving Average ]** Find the average of the past n-period (from the back) Smaller 'm' allows the company to react faster (responsive), but there will be fluctuations which is not good to production. Having large "m" gives more precise forecast \*sum last consumption / divide number of periods Its either u pick a smaller m or a greater m depends on the demand and increase in demand ( sometime the method doesn't work for unstable demand which could be an answer depends on the question ) **[Moving Weighted Average ]** Sum of all "(Weighting \* Consumption)"/ sum of all weightings\ \ advantage prioritize lates changes in demand **[Exponential Smoothing ]**  **[Least Squares Method (Regression Analysis)]** Describing using a mathematical function -- linear or non-linear \*TA Help : Monday 13.15 or 20.45\* **[Class 7]** **[Aggregate Planning ]** [Aggregate planning is a strategic process used by businesses to determine the best way to meet demand while optimizing resources like labor, raw materials, and production capacity over a specified period] 1. **[Input ]** - Aggregate production requirements per unit - Aggregate demand : forecasts considered deterministic here - Aggregate inventory position 2. **[Output ]** - Aggregate production plan - Required aggregate production capacity - Expected in-/outflows of products 3. **[Reasons of using ]** - Demand changes quicker than supply - Many company functions require (rough cut) plan of what will be produced in the next -- 12 months - Staffing - Subcontracting - Marketing - (strategic) sourcing  **[Material Requires Planning (MRP)]** Diagram Description automatically generated - Coordinate orders - Within the plant (jobs) - From outside (purchase orders) - For all types of items from - Final products - components - To meet the objectives of - ensuring product availability - low inventory levels - high scheduling reliability [Bill of Materials (BOM)] - number {x}, = number of equipment needed for 1\ \  [Scheduling ] \*Scheduling is concerned with the allocation of limited resources to tasks over time - forward : calculate earliest end/start date , Begins with the set (earliest acceptable) start date for the order , Calculates for each operation, - backward : calculate latest end/start date, Begins with the set (latest acceptable) completion date for the order (the order due date) , calculates for each operation. [Dispatching] - FIFO : First in First Out - Least Slack : Due date -- processing time - SPT -- Shortest Processing Time - EDD -- Earliest Due date - \*Tardiness = Completion Time -- Due Date \* - \*Completion Time = Total Processing Time of all work\* **[Shopfloor Management. ]** Diagram Description automatically generated  **[: { focus on the order , each rule requires a diffirent order } ]**  - Slack = due date -- process time -current time - Free slack is the amount of time by which an activity can be delayed without affecting the early start of any subsequent activities. - tardiness refers to the delay or lateness in completing a job or task beyond its scheduled **[Functions of (short term) production control]** **[\*\*Key terms in production logistics \*\*]** **Term** **Definition** ------------------------- --------------------------------------------------------------------------------------------- Actual Throughput Time The actual time taken from the beginning to the end of a job. Cycle Time The time required to complete one cycle of an operation or task. Flow Time The total time a job spends in the production process from start to finish. Planned Throughput Time The intended or scheduled time for a job to be completed. Planned Lead Time The planned duration for a job to reach completion. Output Rate Quantity of parts produced per unit of time. Throughput (Rate) The rate at which items are produced or processed within a specified time frame. Maximum Output Rate The upper limit on the quantity of items produced per unit of time. Capacity The maximum output or production capability of a system or resource. Capacity Utilization The fraction of time a work system is operational and not idle due to a lack of parts. Utilization The ratio of actual production to maximum capacity. Work in Process (WIP) Inventory of partially completed items between the start and end of the production process. Work Content The time required to set up and produce a product. Makespan The total time taken to finish a set number of jobs. **[Throughput time component ]** 1. Flow chart of a production order 2. Throughput element  **[Funnel Model ]** Diagram Description automatically generated  **[Throughput Diagram ]** Y = work (hrs) X = time (shop calendar days) \*look like stairs\* \*similar to break even chart\* \*Only use Input/Output SCD with WC (Work Content)\* Chart Description automatically generated **[Little's Law]** WIP = cycle time \* throughput rate (WIP= CT\*TH) à unites = time \* unite/time  \*the jump for output in the 100 value was too much so skip it and leave it till the last A graph with lines and numbers Description automatically generated **[+\_Class 8 ]** **[Logistics Operating Curves { throughput diagrams different alternatives }( storage throughput diagrams ) ]**  Typical WIP Trend - Low WIP Level - Intermediate WIP Level - High WIP Level The ideal Case Scenario  - Input comes in when output finishes (blocks) - Starvation (idle station) between blocks - Input got in early and require waiting time. - Time between arrivals is constant - Operation time is constant and \