Intended learning outcomes: Explain why the features frequency of customer demand and frequency of order repetition do not necessarily need to correspond.
Continuation from previous subsection (4.4.5)
It is also interesting to compare the feature frequency of customer demand in Figure 4.4.2.1 (features related to customer and product or product family) with the feature frequency of order repetition as shown in Figure 4.4.5.3. It is noteworthy that the values of the features in the same columns do not necessarily have to correspond.
Fig. 4.4.5.3 The features frequency of customer demand and frequency of order repetition do not necessarily need to correspond.
Indeed, procurement and production can be decoupled from demand via storage:
- To a certain degree, storage can provide a buffer for discontinuous demand, so that there can be more frequent production. For example, a product can be manufactured throughout the year that will be in demand mainly at a holiday time like Christmas. Through this, capacities can be utilized more evenly. On the negative side, carrying costs are incurred.
- On the other hand, if demand is continuous, delivery can also be made from storage, and usage can be replenished through less frequent orders in large batches. This course of action is sometimes unavoidable, due to both technical constraints (if, for example, such as in the process industry, certain production facilities allow production in specific batch sizes only) and economic reasons (if, for example, as is typical in procurement, the ordering of a small quantity makes no sense, because transport costs — or in production, setup costs — are too high in relation to the unit costs of the small quantity).
However, the more storage should be avoided, the more there has to be a connection between values of the features in the same columns: Unique demand occurs together with production or procurement without order repetition, discontinuous demand together with production or procurement with infrequent repetition, and continuous demand with production or procurement with frequent order repetition.
Similarly, the choice of the planning & control concept (see Section 4.5.3) as well as methods and techniques for materials management (see Section 5.3.2) must first be made on the basis of the frequency of customer demand. If a number of concepts and techniques are possible, the choice is determined by the selected frequency of production or procurement order repetition.
Course section 4.4: Subsections and their intended learning outcomes
4.4 Characteristic Features Relevant to Planning & Control in Supply Chains
Intended learning outcomes: Produce an overview on principle and validity of characteristics in planning & control. Explain six features in reference to customer, and item or product or product family, five features in reference to logistics and production resources, as well as seven features in reference to the production or procurement order. Describe important relationships between characteristic features of transcorporate logistics in supply chains.
4.4.1 Principle and Validity of Characteristics in Planning & Control
Intended learning outcomes: Describe the characteristic in planning & control in a supply chain. Explain the use of the results of the analysis.
4.4.2 Features in Reference to a Product: Depth and Orientation of the Product Structure, and VAT Analysis
Intended learning outcomes: Present important features and possible values referring to a product. Differentiate between a convergent product structure and a divergent product structure. Disclose the VA analysis within the VAT analysis.
4.4.2b Features in Reference to Customer and Product Family: Frequency of Customer Demand and Product Variety Concept
Intended learning outcomes: Present important features and possible values referring to the customer demand and the product variety concept. Differentiate between continuous demand and discontinuous demand. Explain the product variety concept. Disclose the T analysis within the VAT analysis and its relation to the product variety concept.
4.4.2c Features in Reference to an Item: Unit Cost and Transportability
Intended learning outcomes: Present important features and possible values referring to an item: unit cost and transportability.
4.4.3 Features in Reference to Logistics and Production Resources: Production Environment and Depth of the Product Structure in the Company
Intended learning outcomes: Present important features and their possible values in reference to logistics and production resources. Explain the production environment: make-to-stock, assemble-to-order, make-to-order, and engineer-to-order. Differentiate the depth of product structure in the company from the depth of the product structure within the total supply chain.
4.4.3b Features in Reference to Production Resources: Facility Layout, Flexible Capability, Flexible Workforce, and Flexible Capacity
Intended learning outcomes: Present important features and their possible values in reference to production resources. Describe fixed-position manufacturing, job shop production, as well as single-item-oriented, high-volume and continuous line production. Differentiate flexible capability (of the production equipment), flexible workforce, and flexible capacity.
4.4.4 Features in Reference to the Production or Procurement Order: Reason for Order Release, Frequency of Order Repetition, and Flexibility of the Order Due Date
Intended learning outcomes: Present important features and possible values in reference to production or procurement order. Differentiate between order release according to demand, prediction, and consumption. Differentiate between production (or procurement) without, with infrequent, and with frequent order repetition. Identify the feature flexibility of the order due date.
4.4.4b Features in Reference to the Production or Procurement Order: Blanket Order, Lot Size or Batch Size, Lot Traceability, Loops in the Order Structure
Intended learning outcomes: Present important features and possible values in reference to production or procurement order. Identify the features type of long-term order and blanket order. Explain the concepts of lot size, lot traceability, and loops in the order structure.
4.4.5 Relationship between Facility Layout, Orientation of Product Structure, and (Order) Batch Size, and between Product Variety Concept, Production Environment, and Frequency of Order Repetition
Intended learning outcomes: Identify links among the features facility layout, orientation of product structure, and (order) batch size. Disclose links among the features product variety concept, production environment, and frequency of order repetition.
4.4.5b Relationship between the Frequency of Customer Demand and the Frequency of Order Repetition
Intended learning outcomes: Explain why the features frequency of customer demand and frequency of order repetition do not necessarily need to correspond.
4.4.6 Features of Transcorporate Logistics in Supply Chains
Intended learning outcomes: Present important features, possible values, and increasing complexity of supply chain collaboration, of supply chain coordination, and of the configuration of the supply chain.
