2. What is a Supply Chain?
A supply chain consists of the flow of products and services
from:
Raw materials manufacturers
Component and intermediate manufacturers
Final product manufacturers
Wholesalers and distributors and
Retailers
Connected by transportation and storage activities, and Integrated
through
information, planning, and integration activities.
Many large firms are moving away from in-house Vertically
Integrated structures to Supply Chain Management
3. What is a Supply Chain?
The design and management of seamless, value-added
processes across organizational boundaries to meet the real needs
of the end customer
Institute for Supply Management
Managing supply and demand, sourcing raw materials and
parts, manufacturing and assembly, warehousing and inventory
tracking, order entry and order management, distribution across
all channels, and delivery to the customer
The Supply Chain Council
The planning and management of all activities involved in
sourcing and procurement, conversion, and all logistics
management activities … also includes coordination with channel
partners, which can be suppliers, intermediaries, third party
service providers, and customers.
4. Planning & IT-Systems
Supply Chain planning directs the demand for quantities and
timing for every stage of the supply chain
Aim is to achieve the target service level with minimal costs
Planning consists of data administration and calculation
Usually high usage of IT-Systems
Problems of Planning:
Problem 1: Demand fluctuates
Problem 2: Inventory Management
Problem 3: Actuality of data
5. Development of SCM IT-Systems
Material Requirements Planning (MRP)
Developed in the 1970s as inventory control and production
planning systems
Manufacturing Resources Planning (MRPII)
Is used to combine the material planning and the shop floor
with the business functions such as accounting and
purchasing
Enterprise Resource Planning (ERP)
Developed in the 1990s
Combined even more functions
Should provide the same database for the whole company
6. Development of APS
Can’t consider capacities of extern partners and suppliers
Limited opportunities to create, optimize, analyze different
scenarios
ERP-Systems offer only low support in decision-making of
the future demand
Weak nesses of the old systems:
Aims of APS:
Resolve problems with ERP-Systems
Improve MRP processes
Apply more advanced technologies
Better integrated Supply Chain Management
7. What is APS
An upgrade for MRP, MRP II and PPS-Systems
Planning including the information of all members in a SC
mitigation of Bullwhip-effect, lower inventories, enabling CPFR
Best applicable for:
Make-To-Order manufacturing
Production with competing products
Products with high complexity
Manufacturing with frequent schedule changes by steady
changing market environment
Definition: „APS is a process manufacturers use to effectively meet
customer demand. The process involves producing customer
demand forecasts and using them to set optimal material and
production levels”
8. How does APS work?
Suits as an tool-kit to the current ERP-Systems or as complete
SW package ERP+APS available
APS does not replace but complements the ERP-Systems!
Creates the optimal production plans under restriction of
resource availability and production capacity constraints of
each SC stage
Analyses and estimates different scenarios to identify and to
prevent possible bottlenecks on time
Linear programming with advanced mathematical formulas
(f.i. branch-and-cut)
Comprises several modules (functional groups) according to the
SCP-Matrix
9. References
1)Supply Chain Management by Chorpra and Meindl
2)Enterprise Resource Planning – Concepts and Practice by Vinod
Kumar Garg and N K Venkitakrishnan, PHI
3) Management and Information System by Laudan & Laudan, Pearson
Publications
