Index. Dell Computer Corporation, 247 direct sales model, 248 Internet, incorporation of, 247 Demand collaboration,

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1 I Index A Action plan and execution, 212 labor force, 212 monitoring, 212 project owner, appointment of, 212 purchase order placing, 212 selection of partners, 212 selection of sites, 212 staff, appointment of, 212 Additive manufacturing. See 3D printing Advanced planning systems (APS), 141 capabilities, exception resolution, guidelines, 167 heuristics and linear programming, 166 importance, 164 linear programming (LP), 166 Application service provider (ASP) model, 250 ATP. See Available to promise (ATP) Available to promise (ATP), 184 B Batch inventory description, 60 EOQ model, Bill of material (BOM), 74 BOM. See Bill of material (BOM) BTO. See Build-to-order (BTO) Build-to-order (BTO), 33 C Capacity collaboration, 171, 173 Carbon Disclosure Project (CDP), 253 Center of demand (COD), 199 COD. See Center of demand (COD) COGS. See Cost of goods sold (COGS) Collaborative Planning, Forecasting, and Replenishment (CPFR), 168 Collaborative processes, guidelines for applicability, 173 Constraint based planning capacity constraints, 158, 163 input data and prebuild calculations, example, 162 seasonal demand, 161 seasonal or prebuild inventory, 161 constraints situation, 157 examples, constraints and resolution options, 158 Cost of goods sold (COGS), 236 Customer relationship management (CRM), 250 D Dell Computer Corporation, 247 direct sales model, 248 Internet, incorporation of, 247 Demand collaboration,

2 274 Index Demand planning, 249 advantages and disadvantages, 137 bullwhip effect, 122 business model, 91 collaboration, description, 87 developments, 138 distortion, pulse, economic indicators building material, 118 building permits, 121 forecasting, 119 Lennox revenue and housing permit data, 120 regression model, factors, 89 forecasting (see Forecasting, demand planning) functions, 89 industry, forecasting methods, 92 market expansion analogous forecasting, 108 analysis, 108 demographic factors, 109 diffusion modeling, 108 factors, 110 forecasting, multiple forecast updates, ordering and replenishment policies, partner s demand signal, 122 price elasticity, 105 process, 90 pyramid forecasting (see Pyramid forecasting) raw material, 123 regression model, time series forecasting (see Time series forecasting) unawareness, weather impact category, 115 complex weather patterns, 116 consumer spending, 114 forecast, 116 large data volumes, 116 multiple weather variables, 115 National Weather Service, 114 regression model, 114 R-square, 114 DES. See Double exponential smoothing (DES) 3D printing R&D departments, 252 supply chain, impact on, 252 Double exponential smoothing (DES), E Earnings per share (EPS), 220 Economic order quantity (EOQ) model, Electronic Business using extensible Markup Language (ebxml) specification, 174 Electronic data interchange (EDI), 174 EOQ model. See Economic order quantity (EOQ) model EPS. See Earnings per share (EPS) F FCFS. See First-come-first-served (FCFS) FDC. See Flatbed distribution centers (FDC) First-come-first-served (FCFS), 184 Flatbed distribution centers (FDC), 194 Forecasting, demand planning accuracy, measures, consensus methods, 96 errors, factors, 95, qualitative methods, G, H GMROI. See Gross margin return on inventory (GMROI) GMROOA. See Gross margin return on operating assets (GMROOA) Gravity model, 199 Green packaging, 254

3 Index 275 Green supply chain green value measurement, importance, 253 low-cost changes, 254 moderate or high level of investment, 254 Gross margin return on inventory (GMROI), 31, 33, 240 Gross margin return on operating assets (GMROOA), 195, 236 I Incremental margin model expected profit, multi-period model, 57 optimal inventory level, 58, 60 spreadsheet functions, 58 Information system, developments application service provider (ASP) model, 250 competitive activities, 249 customer relationship management (CRM), 250 demand planning, 249 inventory management, 249 presentation of information, 250 radio-frequency identification (RFID), 249 software-as-a-service (SaaS) model, 250 Inventory budgeting finished goods inventory, 65 GMROI, product inventory investment, raw materials, 65 rigorous procedure, 63 sample lead times and contractual terms, supply network, 63 Inventory collaboration, 170 Inventory planning advantages, 71 batching inventory, benefits and drawbacks, 29, budgeting (see Inventory budgeting) camera supply chain, 25, 28 category, 26, 28 days and turns, 32 demand correlation, description, 23 factors, 31 fill rate, 32 GMROI, 31, 33 guidelines, 85 Manufacturer s Shipments and Inventory Data (U.S. Census Bureau s survey), 24 multiple transportation modes, optimal service level, 30 period fill rate, 32 postponement category, 77 characteristics, strategy, transportation costs, 79 raw materials, relevant supplier and transportation, 29 safety stock incremental margin model (see Incremental margin model) newsvendor model (see Newsvendor model) service level method (see Service level method) staging, 71 stockout service level, 32 supplier flexibility, supply chain stage, 73 supply chain, variability BTO, 33 components, 35 extension and variance products, 35 factors, flexibility and disruptions, 35 methods, purchasing and informationsharing processes, 36 J Just-in-time production (JIT), 247 K Key performance indicators (KPIs), 219 KPIs. See Key performance indicators (KPIs)

4 276 Index L Locations, identification COD, 199 gravity model, 199 M MAD. See Mean absolute deviation (MAD) Manufacturing availability, 223 delivery performance, 222 OEE, 223 performance, 223 quality, 224 revenue and diagnostic, 225 Manufacturing planning and control (MPC) business environment, demand and supply collaboration, 15 demand management, 11 departments, 15 features, 15 inventory planning, 14 MPS, 11 MRP, 11 network planning, 14 process framework, 10, 14 production planning, 11 S&OP, 15 supply planning, 14 WMS, 12 MAPE. See Mean absolute percentage error (MAPE) Master production scheduling (MPS), 11 Materials requirements planning (MRP), 11, 141 bill of materials (BOM), 149 calculation explosion, 150 netting, 150 offsetting, 150 data, example, 151 dependent demand, 149 independent demand, 149 item master, 149 Master production schedule (MPS), 149 MRP bill-of-material explosion, 154 on hand inventory, 149 production schedules and requirement plans, example, 152 scheduled receipts, 149 Material routings, evaluation cost data, relevancy, 204 integer programs, 205 Mean absolute deviation (MAD), 93, 234 Mean absolute percentage error (MAPE), 93, 234 Metrics customer-facing, 219 EPS, 220 internal-facing, 220 KPIs, 219 rigorous approach, 220 SCOR model, shareholder-facing, 220 MPC. See Manufacturing planning and control (MPC) MPS See Master production scheduling (MPS) MRP. See Material requirements planning (MRP) N Near-shoring, 251 Network planning 3PL, 197 action plan and execution (see Action plan and execution) changing demand, impact of, 214 COD, calculation, 200 cost and accounts, 195 data and results, 202 definition, 193 delivery costs, 208 GMROOA, 195 importance, 193 inventory costs, 208 locations, identification, 199 logistics and distribution center, 194 management accounts, 195 manufacturing costs, 208

5 Index 277 manufacturing router, 198 material routings, evaluation (see Material routings, evaluation) network and data supply, 206 objectives, 198 process, qualitative factors, 210 quantitative factors, 210 RDC, 193 ROI, 210 routing changes, impact of, 207 supply chain network, 198 time, required, 212 transportation costs, 208 Newsvendor model derivation, NORMDIST, 47 obsolescence cost, 45 optimal service level, 46 retail situation optimal inventory level, unit margins, shortage cost, 45 standard deviation, 47 strategic buy situation expected demand, 52 forecasts, 52 optimal service level and order quantity, profit equation, 52 shortage cost, 52 O OEE. See Overall equipment effectiveness (OEE) Offshoring, 251 OOS. See Out-of-stock (OOS) Ordering and replenishment policies, Organization for the Advancement of Structured Information Standards (OASIS), 174 Out-of-stock (OOS), 232 Outsourcing, 251 Overall equipment effectiveness (OEE), 223 P, Q Partner Interface Processes (PIP), 174 PCDA. See Plan-do-check-act (PCDA) Performance review business environments, 233 COGS, 236 customer performance, days-of-inventory, 235 GMROOA, 236 gross profit, inventory turns, 235 MAD, 234 manufacturing, , 227 MAPE, 234 metrics and variance analysis, OOS, 232 PCDA, 215 process, 221 procurement, product maturity, 217 product performance and rationalization (see Product performance) SCOR model and metrics (see Metrics) shelf place allocation, 234 SKU fill rate, 232 supplier performance, transportation, value fill rate, 232 Plan-do-check-act (PCDA), 215 Point-of-sale (POS) advantages, challenges, 128 POS. See Point-of-sale (POS) Postponement, 251 Pricing and SCM, integration, 252 Production and fulfillment, developments in consumer appliances and goods, 251 drones, 251 energy costs, impact of, 251 postponement, 251 Product performance Bausch and Lomb, 239 GMROI, RGP, 239 silicone hydrogel contact lenses, 239 Soflens Toric, 239

6 278 Index Purchase order collaboration, Pyramid forecasting benefits, 134 category, 133 demand perspectives, 131 guidelines, R RDC. See Regional distribution centers (RDC) Real-time supply chain, 252 Regional distribution centers (RDC), Reorder point (ROP) approach, 141 Replenishment models continuous review replenishment, periodic review replenishment, Requirements planning models distribution requirement planning (DRP), material requirement planning (MRP), 149, 154 Return on investment (ROI), 210 RGP. See Rigid gas permeable (RGP) Rigid gas permeable (RGP), 239 RMSE. See Root mean square error (RMSE) ROI. See Return on investment (ROI) Root mean square error (RMSE), 93 S Sales and operations planning (S&OP) consumer beauty products, 176 cross-functional process, 175 customer order exceptions, effective process, 176 excess inventory exceptions, 186 inventory shortfall exceptions ATP, 184 FCFS, 184 forecast allocation, 182 hard disks, computers, 183 order allocation, 182 scarce resources, 185 structured procedure, 182 supply utilization ratio, 183 procedures and templates, 178 revenue exceptions, visual aids characteristics, forecast accuracy, metric information chart, rapid analysis, waterfall chart and table, 191 workflow, 177 S&OP. See Sales and operations planning (S&OP) SCM. See Supply chain management (SCM) Service level method advantages, 44 correlated case, 41 covariance, 44 forecast error, limitations, 44 normal distribution, 40 RMSE, 39 safety stock, 44 standard deviation, supply lead time variance, 43 supply variability, 41 SES. See Single exponential smoothing (SES) Single exponential smoothing (SES) forecasting, 98, 100 historical sales data, 98 moving averages, 98 Software systems, implementation, 212 Supplier performance customer service, 243 delivery performance, 242 Estée Lauder, 241 process sophistication, 243 purchase price variance, 243 rigorous process, 242 Walmart, 241 Supply chain, 247 Supply chain management (SCM) batch vs. real-time data collection, 18 description, 1 desktop vs. server deployment, 17 limitations, 2

7 Index 279 manual vs. automated workflows, 18 vs.mpc (see Manufacturing planning and control (MPC)) network and cost structure and dynamic business environment, 10 annual report, 4 demand variability, 9 10 factory, 2 Hewlett-Packard, 3 manufacturing plant, 5 margin sensitivity, 8 9 product proliferation, 3 reducing manufacturing costs, 4 refrigerators and washing machines, 2 reliance, contract manufacturers, 4 retailer s distribution centers, 4 sample cost data, 6 7 organization, 19 proprietary vs. industry standards, 18 proprietary vs. open networks, 18 site vs. corporate deployment, 17 software applications, 16 system layout, 16 takeaways, 255 differentiated product offering, 257 effective costing framework, 255 parameters, change of, 257 trends impacting demand, 257 use of scarce resources, 257 Supply collaboration capacity collaboration, 168 collaborative processes, examples, 169 inventory collaboration, 168 purchase order collaboration, 168 supply forecast collaboration, 168 Supply forecast collaboration, 171 Supply planning advanced planning systems (APS), 163, 167 capacity collaboration, 171, 173 collaboration, 167, 169 constraints-based planning, 142, 157, 163 definition, 141 demand planning, 142 T distribution requirements planning (DRP), 154, 157 drawback, 141 importance of, 142 inventory collaboration, inventory planning, 142 materials requirements planning (MRP), 149, 154 process, purchase order collaboration, replenishment models, 142, 144, 149 requirements planning models, 142, 149 supply forecast collaboration, 171 Taiwan Semiconductor Manufacturing Corporation (TSMC), 248 TES. See Triple exponential smoothing (TES) Third-party logistics provider (3PL), 197 Time series forecasting DES, moving averages, 97 SES (see Single exponential smoothing (SES)) TES, 103, 105 Toyota Production System (TPS), 141, 247 Triple exponential smoothing (TES) historical data, 105 shipment data, 103 U United Nations Center for Trade Facilitation and Electronic Business (UN/CEFACT), 174 V Voluntary Interindustry Commerce Solutions (VICS) Association, 174 W, X, Y, Z Warehouse management systems (WMS), 12 WMS. See Warehouse management systems (WMS)