Production Strategies: Make to Stock-Make to Order- Make to Forecast

1. Why would demand forecasting make sense in a “make to stock” situation? It projects the standard components needed so that the product can be made after customer receiving a customer order.

The timing of capacity changes also needs to be taken into consideration to achieve maximum efficenty given that demands of their products varies with seasonal changes. The ability to react to market demand changes quickly will determine manufacturers flexibility in keeping up with these demands. Manufacturers needs facilities to produce, whether warehouses to store its raw materials or finished goods, or manufacturing plants to produce their products. Services facilities are needed by certain manufacturing industries such as consumer electronics to cater for returns. Distribution centres also determine the efficenty of production distribution and un-nesessary inventory holding will result in higher holding cost. Such facilities require large investments and are integral of the manufacturer’s supply chain strategy and thus proper planning is needed when making these decisions regardong the size, location which affect the overall operations. How manufacturers run their productions also determine how successful will they be in terms of productivity and quality levels. Different types of equipment and processes also affect the cost and output of the manufacturing plant. Information systems that flow both upstream and downstream affects the forecasting, planning, inventory and production levels, they must be robust to ensure the manufacturing firm is able to react accordingly to changing demands and variations. In addition to their internal environment,

Supply-chain management consists of developing a strategy to organize, control, and motivate the resources involved in the flow of services and materials within the supply chain. A supply chain strategy, an essential aspect of supply chain management, seeks to design a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy.

* Inventory levels will have to be closely monitored as the customer orders will require special handling and production scheduling versus the push mentality of producing many products to stock.

During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand

Employing new merchandising tools aid the company in realizing lean production measures with its supply chain. Forecasting capabilities substantiated through “The combined efforts of our supply chain, merchandising, operations and finance teams, we reduced inventory by almost half a billion dollars in 2009, while at the same time improving our in-stock position” (Datamonitor 360, 2010).

The present organizational chart of the SC Department in the company includes two buyers, one material control clerk, one expeditor and two shipper/receivers. This structure was functional to the previous strategy because there was a strong focus on the purchasing function. We believe that in order to maximize the SC Department resources in accordance with the new structure the positions and functions of the people with the SC Department will have to be adapted to strengthen the inventory management function of the company. There company could benefit from having one person responsible for forecasting demand. Processes should be reviewed to ensure that the SC Department has sufficient access to information in order to achieve this task. Re-buying will also be of utmost importance now in order to ensure that there is always sufficient inventory to maintain production going.

Coordinating capacity restrictions with production to produce optimal levels of inventory without stocking out or creating a large excess of inventory.

They can operate on a just in time method, when they get a constant understanding of demand. This way they can cut production costs, by only making what they need. They can also predict when they need more inventory to make sure that they never run out of stock for their customers to purchase.

The advantages of Advanced Planning and Scheduling programming permit noteworthy changes to MRPII's customary creation arranging/booking and scope quantification model. As demonstrated in the outline beneath, the MRPII model for arranging and booking promoters the utilization of diverse methodologies (Production Planning, Master Production Scheduling, Material Requirements Planning, Production Activity Control) over distinctive time skylines. Every methodology has its own particular variant of Capacity Planning to recognize and conform for limit awkward nature. Since these

(Bowersox, D.J., Closs, D.J., and Cooper, M.B. (2010). Supply Chain Logistics Management. (3rd Edition) New York, NY: McGraw-Hill/Irwin.

| A production system in which inventory is "pulled" through the shop tends to require a larger work-in-process inventory than a system in which inventory is "pushed" through the shop. Your Answer:

The bullwhip effect increases as the lead time increases. This is because the order level needed and desired level needed are proportional to the lead time. This causes amplifying of inventory. There can also be other delays like delaying order placing.

Delayed differentiation or Postponement is a concept in supply chain management where the manufacturing process starts by shipping a generic product as far down the supply chain before variety (differentiation) is added. Since aggregated forecast are more accurate, instead of building a complete product based on forecast HP should build based on orders (push-pull strategy) and actual assembly specific product that is ordered. For example, the

Forward logistics (or conventional logistics) is the regular distribution channel followed by the manufactures from time immemorial. Forward logistics concentrates on the products (goods or services) reaching the consumer end and deals with the line of flow from the manufacturer’s end to the consumer’s end. It deals with the very essence of Supply Chain Management and logistical activities of an organization. It has a significant impact on the primary operations carried out, which act as the basic revenue generating aspect of a business. In this logistical system, the flow is a “one-to-many” type and the forecasting or traceability is quite simple.