Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

5.1.3 Part Processes and Tasks in Short-Term Planning & Control

Intended learning outcomes: Present in detail short-term planning & control, also called execution and control of operations. Produce an overview on order release, order coordination, order monitoring and order checking, delivery, job-order costing, and billing.

Figure shows, in MEDILS form, part processes and tasks in short-term planning and control, or execution and control of operations.

Fig.        Short-term planning & control: execution and control of operations.

The figure shows only one production structure level in the supply chain. The order originates from a sales, production, or procurement department of an internal or external customer. The production structure level itself places orders to suppliers, either components warehouses or lower production structure levels. The second part process can be repeated. For a production order, for example, first all com­ponents will be procured. Then all operations can be executed. Orders can be released either separately for each part process or all together. Order coordination can also be repeated (broken arrows in Figure

Order configuration handles an order proposal from medium-term planning or an order from an external or internal customer. It determines delivery (work, or product, quantity, and due date).

Order configuration compares the order to any existing bid or blanket order. In the case of R&D orders, order configuration consists in planning the volume of the release. This is part of engineering change control (ECC). See Section 5.4.

Detailed resource requirements calculation calculates, firstly, for an un­planned order, if needed, through analytical explosion of product structures and routing sheets (see Sections 1.2.2 and 1.2.3), the detailed require­ments of products, material, components and capacity (persons and infra­structure), divided up along the time axis. Secondly, it tests — for a planned or unplanned order — the availability of resources; that is, whether the requirements for resources are covered; where necessary, order proposals for covering requirements are worked out.

If resources are not available at the required times, lead time must be increased. Here, techniques such as available-to-promise (ATP) or capable-to-promise (CTP) can be of use. For details refer to Section 5.3.5.

Order release is the decision to execute order proposals or orders originating from higher-level logistics. It produces all administrative documents required for order confirmation, order execution (for example, in production), or for communication with suppliers. Necessary transportation means will also be secured.

A released order is a production or procurement order with ongoing production or procurement (in contrast to a planned order).

Order coordination coordinates the order and all other connected orders in an integrated manner. For example, a customer order may require a development order and several levels of production and procurement orders. These make up further short-term processes of the type shown in Figure, arranged in a multilevel cascade. Figure shows a simple example. Normally, there are several levels and, at each level, several parallel part processes to coordinate.

Order monitoring and order checking: Progress checking monitors execution of all work accor­ding to plan in terms of quantity and delivery reliability. (If devi­ations from the plan are too great, this may lead to recalculation of the rest of the process plan.) Quality control means checking the quality of all incoming goods from production and procurement. Quality control has become an extensive process that is based upon specific quality control sheets.

In data management, all types of orders each are business objects, of the order class (see Section 1.2.1).

For delivery, or distribution, the products are issued from stock (order picking) and prepared for shipment; the required transportation means and accompanying documents are made available; and delivery is executed.

Job-order costing evaluates data captured by shop floor data collection (that is, mainly resource use).

Billing transmits the results of cost accounting to the customer (for example, in the form of an invoice) and, where required, adjusts data management’s projected values for the business objects.

Course section 5.1: Subsections and their intended learning outcomes

  • 5.1 Business Processes and Tasks in Planning & Control

    Intended learning outcomes: Describe the MRP II concept and its planning hierarchy. Explain the part processes and tasks in long-term, medium-term planning as well as in short-term planning & control. Present the reference model of processes and tasks in planning & control. Produce an overview beyond MRP II: DRP II, integrated resource management, and the “theory of constraints”.

  • 5.1.1 The MRP II Concept and Its Planning Hierarchy

    Intended learning outcomes: Explain the business processes in logistics and operations management of an enterprise, structured according to temporal range. Describe the different degrees of detail in planning. Disclose the aim of data management.

  • 5.1.2 Part Processes and Tasks in Long-Term Planning

    Intended learning outcomes: Present long-term planning, also called master planning. Differentiate between master planning and master scheduling. Produce an overview on bid processing, customer blanket order, sales and operations planning (SOP), (detailed) resource requirements planning, requests for quotations, and blanket order processing.

  • 5.1.2b Part Processes and Tasks in Medium-Term Planning

    Intended learning outcomes: Disclose medium-term planning & control, also called detailed planning and scheduling. Produce an overview on detailed resource requirements planning, and order proposal.