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.
Figure 4.4.4.1 shows the third group of features.
Fig. 4.4.4.1 Important features and possible values in reference to production or procurement order.
The reason for order release is the origin of the demand. The type of order indicates the origin of demand that resulted in the order.
- Conventionally, the following values are distinguished (compare to Figure 4.2.3.1): Order release according to demand and customer production orderor customer procurement order: A customer has placed an order. It may be a classic (single) order, for a car, for example, or it may be a blanket order, such as for electronic components. In the latter case, customer production orders can follow at different points in time, released according to the delivery agreements. This is also called demand-controlled materials management, using pull logistics.
- Order release according to prediction and forecast order: Future demand has been estimated, such as demand for a machine tool. Customer orders for the machine tool have not yet been received. To meet forecasted demand, a production or procurement order is released. This is also called forecast-controlled materials management using push logistics.
- Order release according to consumption, and (stock) replenishment order: A customer places an order for a product in stock, for example, in the retail trade. In response to the demand, stock must be reordered. Actually, this is a response to forecasting future need in the quantity that is reordered. This is also called consumption-controlled materials management using pull logistics.
Compare these definitions to Figure 4.2.3.1. By the way: The trigger for the release of orders can be different for end products, semifinished goods, and raw materials. It is dependent on the (customer) order penetration point (OPP).
The frequency of order repetition tells us how often within a certain time period a production or procurement order for the same product will be made. The time period chosen should be sufficiently long.
- Production without order repetition or procurement without order repetition means that an order for the same physical product will practically never be placed again.
- Production with infrequent order repetition or procurement with infrequent order repetition means that, with a certain probability, an order for the same physical product will be placed again.
- Production with frequent order repetition or procurement with frequent order repetition means that orders for the same physical product will be very frequent.
Note: The adjective physical is used here to underline that this feature refers to the product level, and not to the product family level. Therefore, if an order produces a physically different product of the same family compared to another order, this is not considered to be production with order repetition.
The flexibility of the order due date indicates whether customers (internal or external) are flexible when stipulating the delivery due date.
The flexibility of the order due date is of great importance to methods of planning & control, particularly with regard to the target area of delivery. With regard to the target area of cost, it is connected to the flexible capacity, on-hand balance, and in-process inventory.
Continuation in next subsection (4.4.4b).
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.
