Sales & Operational Planning : Sales and Operations Planning (S&OP) is a powerful decision making tool for business executives as well as line managers. According to Tom Wallace, “S&OP enables the company’s managers to view the business holistically and gives them a window into the future”. Positive results that companies have gained from S&OP include hard benefits, such as improved customer service and lower inventory and soft benefits, such as improved teamwork and better decision making. The value to any company of balancing supply and demand has long been understood. When we add volume and mix to this equation, we get the four fundamentals needed for effective business balance. For those companies grappling with these 4 fundamentals, S&OP can provide excellent benefits. The role of S&OP process is to balance supply and demand at the volume level. Companies who do a good job at this level find much less problem at balancing the supply and demand at mix level, thereby reducing inventory, improving customer service and improving manufacturing efficiencies.

Materials Requirement Planning (MRP) :
MRP is software based production planning and inventory control system used to manage manufacturing processes

Objectives of an MRP system:
Ensure materials and products are available for production and delivery to customers.
Maintain the lowest possible level of inventory.
Plan manufacturing activities, delivery schedules and purchasing activities.

Inputs to MRP process:
Stock on hand data
Bills of Materials
WIP or Works orders released but not completed
Purchase Orders released but not received
Customer Orders promised and not promised
Forecasts where applicable.

Outputs to MRP process:
Planned Purchase Orders
Planned Works Orders
Exception Reports

Benefits of MRP process:
MRP process is quick and accurate as long as the master parameters are maintained correctly
Avoids dependence on people

Demand Forecasting : Demand Forecasting is the process in which companies are able to forecast into the future to determine what future demands may be. This is important to businesses due to the fact that it enables them to be sufficiently prepared, in terms of inventory, for their customers.

Demand Management takes supply chain management to the next level by enabling an automated “ecosystem” that simultaneously maps demand forecasting against factors like supply restrictions, customer commitments, inventory counts, financial predictions, as well as patterns of behaviour that can affect demand at any given time.

Demand management is a more proactive approach than its predecessors – relying on highly sophisticated quantitative analytics and advanced modeling techniques to preset tolerance levels, predict and pinpoint problem areas, monitor and adjust strategies dynamically, and achieve real time visibility and synergy across all channels

Master Production Schedule (MPS): The Master Production Schedule (MPS) translates your business plan, including forecasted demand, into a production plan using planned orders in a true multi-level optional component scheduling environment. Using MPS helps you avoid shortages, costly expediting, last minute scheduling, and inefficient allocation of resources.

Working with MPS allows you to consolidate planned parts, produce master schedules and forecasts for any level of the Bill of Material (BOM) for any type of part. You can maintain and manipulate the Master Production Schedule forecasts using the Statistical Sales Forecasting module, and you can maintain separate forecasts for each customer.

The master production schedule (MPS) is a presentation of the demand, including the forecast and the backlog (customer orders received), the production schedule (the supply plan), the projected on hand (POH) inventory, and the available-to-promise (ATP) quantity. The master production schedule (MPS) is the primary output of the master scheduling process. The MPS specifies the end items the organization anticipates manufacturing each period. End items are either final products or the items from which final assemblies (products) are made; as described later in this section. Thus, the MPS is the plan for providing the supply to meet the demand.

Production Planning: Production Planning represents the heart of any manufacturing process. Its purpose is to minimise production time and costs, efficiently organise the use of resources and maximise efficiency in the workplace.

Production planning incorporates a multiplicity of production elements, ranging from the everyday activities of staff to the ability to realise accurate delivery times for the customer. With an effective production planning operation at its nucleus, any form of manufacturing process has the capability to exploit its full potential

Inventory Management :
Inventory management balances the cost of lost sales due to inadequate stock vs. the cost of carrying too much stock
You'll need to know how and when to order, how to receive items, how to track stock and how to monitor sales and return.
An essential element of inventory planning is knowing how much inventory you need and when you need it. It involves forecasting sales before they happen, tracking items that leave and knowing how long it will take to receive new items. A successful inventory management system will have just enough of each item to meet needs at any given time, thus reducing the cost of keeping extra stock or causing delays by running out of items in demand. The Just In Time manufacturing method distills this idea into an inventory management system that industries, have adopted with success.

Objectives of Inventory Management:

Reduce carrying costs.
Improve the ordering process.
Maximize order flow.
Reduce waste.
Get items on hand when you need them.
Increase customer satisfaction.

Distribution Requirements Planning: Distribution Requirements Planning (DRP) is a method used for planning requirements in a multi plant multi warehouse distribution context. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements. DRP also enables to set default plant locations to ensure that the various warehouse requirements are planned at the correct plants which can minimise transportation costs.

 DRP uses several variables:
On-hand inventory at the end of a time period.
Backordered demand at the end of a time period.
Required quantity of product needed at the beginning of a time period.
Constrained quantity of product available at the beginning of a time period.
Recommended order quantity at the beginning of a period.

 DRP needs the following information:
Demand in a future time period.
Scheduled receipts at the beginning of a time period.
Safety stock requirement for a period.
On-hand inventory at the beginning of a period.

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