© The Delos Partnership 2006 page 1 Supply Chain Techniques Choices to be made when deciding how to plan

© The Delos Partnership 2006 page 2 Policy affects MPS Model Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time End Item Model Planning Bill of Material Bill of Activity Or Project

© The Delos Partnership 2006 page 3 Make to Stock Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Customer Places Order here Customer Places Order here

© The Delos Partnership 2006 page 4 Make to Order Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Customer Places Order here Customer Places Order here

© The Delos Partnership 2006 page 5 Periods Forecast Actual Demand Proj Avail Balance Available to Promise Cumulative ATP Master Schedule 75 Item Level Forecast Part Number: Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 75 On Hand: 100

© The Delos Partnership 2006 page 6 Customer Profile Customer X 50per month Customer Y 10 per month Customer Z 5 per month Customers A… 35 per month Total =100 per month Forecast at End Item Level

© The Delos Partnership 2006 page 7 End Item Level Forecast Periods Forecast Actual Demand Proj Avail Balance Available to Promise Cumulative ATP Master Schedule 75 Part Number: Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 75 On Hand: 100

© The Delos Partnership 2006 page 8 Assemble to Order Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Customer Places Order here Customer Places Order here

© The Delos Partnership 2006 page 9 Cumulative Lead Time Blue Pen Part Number Blue Pen Part Number Pen Barrel Part Number Pen Barrel Part Number Finished Nib Part Number Finished Nib Part Number Cap Part Number Cap Part Number Semi finished Nib Part Number Semi finished Nib Part Number Ink Part Number Ink Part Number Felt tip Part Number Felt tip Part Number Lead Time = 5 weeks Lead Time = 1 weeks Lead Time = 6 weeks Lead Time = 4 weeks Lead Time = 1 weeks CUMLEADTIMECUMLEADTIME

© The Delos Partnership 2006 page 10 Customer Lead Time = 1 week BluePen Part Number BluePen Part Number Pen Barrel Part Number Pen Barrel Part Number Finished Nib Part Number Finished Nib Part Number Cap Part Number Cap Part Number Semi finished Nib Part Number Semi finished Nib Part Number Ink Part Number Ink Part Number Felt tip Part Number Felt tip Part Number Lead Time = 5 weeks Lead Time = 1 weeks Lead Time = 6 weeks Lead Time = 8 weeks Lead Time = 1 weeks CUMLEADTIMECUMLEADTIME Customer Lead Time

© The Delos Partnership 2006 page 11 Product Variants Blue Pen Part Number Blue Pen Part Number Red Pen Part Number Red Pen Part Number Black Pen Part Number Black Pen Part Number Green Pen Part Number Green Pen Part Number VariantForecastActual Blue4050 Red6070 Black3020 Green7060 Total200 How many Nibs And How many Caps and barrels Needed ? How many Nibs And How many Caps and barrels Needed ?

© The Delos Partnership 2006 page 12 Planning Family Blue Option Part Number Blue Option Part Number Red Option Part Number Red Option Part Number Black Option Part Number Black Option Part Number Green Option Part Number Green Option Part Number Common Parts Common Parts Pen Family Pen Family % = % = % = % = 0.35 Forecast = 200/mth 100 % = 1.0

© The Delos Partnership 2006 page 13 Periods Forecast Actual Demand Proj Avail Balance Available to Promise Master Schedule 50 Periods Dependent Forecast Actual Demand 1171 Proj Avail Balance Available to Promise Master Schedule Blue Option Part Number Blue Option Part Number %

© The Delos Partnership 2006 page 14 Periods Forecast Actual Demand Proj Avail Balance Available to Promise Master Schedule 50 Periods Dependent Forecast Actual Demand 1171 Proj Avail Balance 0 Available to Promise 010 Master Schedule 1110 Blue Option Part Number Blue Option Part Number %

© The Delos Partnership 2006 page 15 Periods Forecast Actual Demand Proj Avail Balance Available to Promise Master Schedule 50 Periods Dependent Forecast Actual Demand 1171 Proj Avail Balance Available to Promise 0610 Master Schedule Blue Option Part Number Blue Option Part Number % Overplan

© The Delos Partnership 2006 page 16 Planning Family Blue Option Part Number Blue Option Part Number Red Option Part Number Red Option Part Number Black Option Part Number Black Option Part Number Green Option Part Number Green Option Part Number Common Parts Common Parts Pen Family Pen Family % = % = % = % = 0.35 Forecast = 200/mth 100 % = 1.0 INVENSTMENTINVENSTMENT

© The Delos Partnership 2006 page 17 Standard EOQ Schedule A B C D 2010 E 20 Total 30

© The Delos Partnership 2006 page 18 Order Quantity Set up cost per unit £5.00£ 2.50£ 1.67£ 1.25£ 1.00£ 0.83 Number of batches pa Total Set up cost £ 6,000£ 3,000£ 2,000£ 1,500 £ 1,200£ 1,000 Average Inventory £ Inventory 20 % £ 500£ 1,000£ 1,500£ 2,000£ 2,500£ 3,000 Total Cost £ 6, 500£ 4,000£ 3,500 £ 3,700£ 4,000 Set up Cost per batch = £ 500Annual Usage = 1,200 Inventory Cost = 20 % Cost per unit = £ “Minimum” OQ

© The Delos Partnership 2006 page 19 Order Quantity Set up cost per unit £5.00£ 2.50£ 1.67£ 1.25£ 1.00£ 0.83 Number of batches pa Total Set up cost £ 6,000£ 3,000£ 2,000£ 1,500 £ 1,200£ 1,000 Average Inventory £ Inventory 20 % £ 500£ 1,000£ 1,500£ 2,000£ 2,500£ 3,000 Total Cost £ 6, 500£ 4,000£ 3,500 £ 3,700£ 4,000 Set up Cost per batch = £ 0Annual Usage = 1,200 Inventory Cost = 20 % Cost per unit = £ Min OQ

© The Delos Partnership 2006 page 20 Mixed Model Schedule A 14 B C D E Tot 30

© The Delos Partnership 2006 page 21 End Item Level Forecast Periods Forecast 14 Actual Demand Proj Avail Balance Available to Promise 14 Cumulative ATP Master Schedule 14 Part Number: Lead Time: 2 periods Safety Stock: 0 Min Ord Qty: 1/1 On Hand: 0

© The Delos Partnership 2006 page 22 Make to Stock Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Customer Places Order here Customer Places Order here

© The Delos Partnership 2006 page 23 Global Supply Chain planning Same product in different geographical location Lead Time separates two locations Central management of inventory enabled

© The Delos Partnership 2006 page 24 Global Supply Chain Planning Bill of Distribution Same Product Code : Location code needed

© The Delos Partnership 2006 page 25 Distribution Planning Process Receive Forecast Calculate Plan CaptureData BALANCED PLAN Hold Supply Review Transmit the plan Receive Supply Plan Review action messages messages ReviewMessages

© The Delos Partnership 2006 page 26 Periods Forecast25 20 Warehous e Demand Actual Demand Proj Avail Balance Available to Promise Master Schedule 150 Master Schedule UK Part Number: Lead Time: 2 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 300 Location : 001 UK

© The Delos Partnership 2006 page 27 Periods Forecast Warehouse Demand Actual Demand 25 Proj Avail Balance Available to Promise Master Schedule 150 Master Schedule - UK Part Number: Lead Time: 2 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 300 Location : 001 UK

© The Delos Partnership 2006 page 28 Periods Forecast520 Actual Demand 15 Proj Avail Balance Available to Promise Master Schedule 100 Planned Release 100 DRP - Germany Part Number: Lead Time: 2 periods Safety Stock: 20 Min Ord Qty: 100 On Hand: 80 Location : 002 Germany

© The Delos Partnership 2006 page 29 Periods Forecast2040 Actual Demand 20 Proj Avail Balance Available to Promise Master Schedule 150 * 150 Planned Release 150 DRP Spain Part Number: Lead Time: 3 periods Safety Stock: 50 Min Ord Qty: 150 On Hand: 90 Location : 003 Spain * In Transit

© The Delos Partnership 2006 page 30 Periods Forecast0010 Actual Demand 20 Proj Avail Balance Available to Promise 50 Master Schedule 50 Planned Release 50 DRP Italy Part Number: Lead Time: 3 periods Safety Stock: 20 Min Ord Qty: 50 On Hand: 70 Location : 004 Italy

© The Delos Partnership 2006 page 31 Engineer or Design to Order Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Customer Places Order here Customer Places Order here

© The Delos Partnership 2006 page 32 Project Management Needs Management across all the projects

© The Delos Partnership 2006 page 33 Bill of Activity – Link with Planning Ship Pack Process Validation Process Validation Develop Process Develop Process Source Material Source Material Develop Materials Develop Materials Source Equipment Source Equipment Design Layout Design Layout Lt = 2 weeks Lt = 6 weeks Raw Material Raw Material Lt = 4 weeks Lt = 10 weeks Lt = 10 weeks Lt = 6 weeks Lt = 6 weeks

© The Delos Partnership 2006 page 34 Master Scheduling Options Summary  Models can change depending on Service level / Customer Lead Time Inventory Level in BOM Set up reduction activity  Requires careful review of planning models  Determining where to meet customer is key