Features of the P-S Cycles Planning & Scheduling System
Gathering Depot Sales Forecasts
A Sales Forecast workbook is submitted by each Depot in different formats, and there are individual interfaces for each Depot Forecast. This workbook locates a “Marker” text within each Forecast workbook to derive the position of the data.
The data from the Depots is pulled in to this workbook without opening the Depot’s workbooks
Each Depot Forecast is normalized, and then they are all “stacked” to form a single table.
Conditioning the Forecasts
The Forecasts are submitted by the Depots in monthly buckets, and these are split into weekly buckets, considering:
1. A “Forecast Spread” table reflecting that sales are heavier towards the end of the month.
2. Sales do not occur during weekends and public holidays
3. Some weeks start in one month and end in the following month
Initial Replenishment of Depot Inventory from the Distribution Center
Minimum and maximum inventory levels are expressed as cover (not units), for each Depot, in the “Locations” sheet. The delivery lead time to each Depot is also considered.
It is assumed that products will be replenished from the Distribution Center, and not “back shipped” from one Depot to another.
For each product that is currently below the minimum cover (plus the delivery lead time) at a Depot, the system calculates the quantity required to raise the inventory level to the maximum cover. However, if there is insufficient inventory at the Distribution Center, the inventory is “rationed”. For those Depots where the inventory is below the minimum, and below the national average cover, inventory is replenished up to the national average. (this is an iterative calculation)
A parameter on the “Menu” sheet controls whether inventory will be distributed on a “Top-Up” basis. If one or more products at a Depot are below the minimum cover, this will trigger a replenishment. To optimize the usage of transport to that Depot, it may be sensible to “Top-Up” other products to their maximum cover. “Topping-Up” may also be subject to inventory rationing.
The projected inventory is calculated for each product at each location at the end of each week. In the weeks in which a product is projected to drop below the minimum cover, a replenishment is “triggered”, and the quantity to replenish the inventory to the maximum cover, is calculated.
The logic will not not trigger more than one replenishment per week, so the gap between the minimum and maximum cover should be one week or more. Again, the option is applied to “Top-Up” the other products at the same depot.
The system calculates the exact date and time in the week, that the cover would have penetrated the minimum cover. This way each replenishment can prioritised, for example a Tuesday replenishment would have a higher priority than a Friday replenishment, in the same week. The date and time of the earliest replenishment to a depot, is attached to any other replenishments and Top-Ups to the same Depot in the same week, so all the dedliveries to one Depot, in a week, can be synchronized.
The Chicago Distribution Center holds inventory to supply the Chicago region as well as for replenishing the other depots. The Depot replenishment quantities are calculated, then any surplus inventory at the Distribution Center is allocated to Depots, and what cannot be satisfied from the Distribution Center, will need to be made.
The Sales Forecasts prepared by each Depot are estimates of the sales that should be fulfilled from the Depot Inventory. However, orders may be placed by customers which are above what was forecast, for export customers for example. This is “Make to Order” demand. Small sales orders which were anticipated in the forecast, are part of the “Make to Inventory” demand.
Sales orders may be nominated to be despatched from the Distribution Center, or alternatively, from one of the Depots. In the week that the order is due to be dispatched, the order will “soak up” any surplus inventory that may be at the Depot, and after that it will “soak up” any surplus inventory at the Distribution Center. Sales order quantities that cannot be satisfied with surplus inventory, will need to be made.
The material cost of each manufactured item is calculated by taking the cost of the purchased items, and “rolling up” the costs through each level of the BOM, to give the material cost of each finished product, and each sub-assembly in between.
Material Requirements Planning (MRP1)
The finished products that need to be made to satisfy Depot demand, and to satisfy sales orders, are combined together and presented as demand to the MRP module.
The module takes each demand for finished products in priority sequence, and explodes demand through each level of the BOM. At each level of the BOM, it deducts:
- WIP of components or sub-assemblies, that may have already been issued to the assembly.
- Inventory of components or sub assemblies, in the store, that are available for any assembly that requires them.
- Assemblies and sub-assemblies that need to be manufactured, for each demand
- Components that need to purchased
- Inventory and WIP that will remain when all the demand has been satisfied.
Explode Through Routing & Batch for Set-Up Reduction
Purchased tubing is cut and then shaped to make frame tubes of various lengths. The BOM shows that frame tubes are made directly from purchased tubing, and there is no item code for a frame tube that is cut, but not yet shaped. Every item with more than one operation is exploded.
The parameter “Batching Period – Hours”, on the Work_Centers Sheet that control how production runs through the paint line are batched together to reduce. For example any runs of the same color that are due within 12 hours of each other, will be run together. All the operations upstream and downstream of the paint line will also follow the same color sequence, but within a color, the cutting work center will cut like tube lengths together.
The Rough-Cut capacity calculations compare the hours of workload on each Work Center, with the capacity (hours available) in each Work Center, and display the comparison on charts.