Patent Application
20090043638
1. Field
Embodiments of the invention relate to supply chain management. More specifically, embodiments of the invention relate to integrated planning of time period planning locations and reorder point based planning locations within the supply chain.
2. Background
Historically, there have been two primary approaches to supply chain network planning. The first approach, time period planning (TPP), uses future demands over a time horizon and distribution planning is optimized for the entire horizon. In this type of planning, the horizon is divided into multiple time periods with distribution occurring within each time period. The second approach to planning, reorder point based planning (ROP), is an approach where distribution planning is driven by a shortfall of available quantities below a minimum level known as the reorder point. Both approaches seek to achieve optimization within their given context. The first approach optimizes for a planning horizon, while the second approach replenishes for current demands without optimization for future demands.
Commonly, TPP is used for sophisticated scenarios and critical parts, while ROP is used for simple scenarios and/or noncritical parts. ROP has the advantage of relative simplicity and minimal computational effort. In real networks, it may be necessary or desirable to use TPP for one location within the supply chain and ROP for another location within the supply chain for the same product. Unfortunately, since ROP only calculates the demand for the current day and TPP calculates the demand over the entire planning horizon, it has not been possible to plan for both TPP and ROP locations in a single planning run.
Performing TPP and ROP in consecutive planning runs leads to the risk that TPP locations are preferred over ROP locations or vice versa. Another risk of sequential planning is that the demands from a child ROP location may be inaccurately considered under a TPP calculation for the parent.
A system and method to perform time period planning and reorder point planning in a single planning run is disclosed. Forecast data for a first subset of location products and inventory data for a second subset of location products is supplied to the planning system. Time period planning is performed on the first subset of location products and reordering point planning is performed on the second subset of location products in the same planning run.
The invention is illustrated by way of example and not by way of limitation in the figures of the accompanying drawings in which like references indicate similar elements. It should be noted that references to “an” or “one” embodiment in this disclosure are not necessarily to the same embodiment, and such references mean at least one.
Frankfurt 112 is a child of Montreal 104, but the parent of Helsinki 120, Oslo 128 and Frankfurt (Virtual) 122. Each of Dallas 116, Montreal (Virtual) 114, Helsinki 120, Oslo 128 and Frankfurt (Virtual) 122 are customer facing location products. In creating the distribution plan, the demand of child location products must be considered at the parent location products. Thus, distribution for Helsinki 120, Oslo 128 and Frankfurt (Virtual) 122 must be considered in planning the distribution to Frankfurt 112. It is necessarily the case that any parent location product having children that are TPP location products must itself be a TPP location products. This is true because it is impossible to do TPP planning for a child if the parent is using ROP planning since the availability of the product to satisfy demand in a subsequent period of the time horizon cannot be assured. The corollary is also true; any parent that is an ROP location product must only have children that are ROP location products.
At block 205, the process begins to loop over all location products. For each location product at decision block 206, it is determined whether location is in the first subset. In one embodiment, this may be accomplished by a flag in the master data which indicates whether ROP is relevant for the location product. If the location product is in the first subset, e.g., the ROP relevant flag is not set, time period planning is applied to the forecast demand over the planning horizon at block 208. At block 210, a determination is made whether an excess or shortage exists at the location and the amount of excess or shortage. In TPP location products an excess or shortage may be determined by comparing demand and receipts within a certain excess/shortage horizon. If at decision block 206 it is determined that the location product is not in the first subset, e.g., the ROP relevant flag is set, the reorder point planning is applied at block 212. In one embodiment, reorder point planning is accomplished by using time period planning with a single period for the horizon. Thus, in effect, distribution requirements for a reorder point become immediate as opposed to being graduated to different periods within the time horizon. In one embodiment, within deployment priority tiers, demand from an ROP location product is given the same priority as the demand for the first period of a TPP location. In ROP location products an excess threshold and shortage threshold may used to represent the anticipated demand in the determination of excess and shortage in block 214, because the demands are not known for ROP location products. The loop ends at block 225.
Having planned for each location, a distribution plan based on the planning results of the blocks 208 and 212 for all location products is generated at block 226.
From the distribution plan, stock transfer orders may be generated for regular distribution at block 228. Additionally for location products in the same inventory balancing area stock transfer orders may be generated based on excesses and shortages at block 230. In one embodiment, the distribution plan and stock transfer orders are calculated planning type agnostic. Stated differently, DRP, deployment and inventory balancing have no preference between different planning type location products when generating distribution plan respectively STOs.
While the foregoing description is undertaken in connection with a flow diagram, it should be understood that some elements of the flow may occur in an order other than set forth herein. Some elements may occur in parallel. All such modifications are deemed within the scope of various embodiments of the invention.
The excess 448 is given by the difference between physical stock 310 and the aggregate of XMSL and planned distribution demand 458, confirmed distribution demand 456. These demand components 454 and 456 permit the modeling of demand spikes, such as might result from a promotion. By using them in the excess calculation STO's that transfer out physical stock inventoried for a special demand event, such as a promotion are avoided.
In some instances, some of the stock transfer orders may be balancing stock transfer orders to cause the transfer of products between location pairs having excess/shortages to reduce or eliminate the excess and/or shortage. For example, referring to
Elements of embodiments may also be provided as a machine-readable medium for storing the machine-executable instructions. The machine-readable medium may include, but is not limited to, flash memory, optical disks, CD-ROMs, DVD ROMs, RAMs, EPROMs, EEPROMs, magnetic or optical cares, propagation media or other type of machine-readable media suitable for storing electronic instructions. For example, embodiments of the invention may be downloaded as a computer program which may be transferred from a remote computer (e.g., a server) to a requesting computer (e.g., a client) by way of data signals embodied in a carrier wave or other propagation medium via a communication link (e.g., a modem or network connection).
It should be appreciated that reference throughout this specification to “one embodiment” or “an embodiment” means that a particular feature, structure or characteristic described in connection with the embodiment is included in at least one embodiment of the present invention. Therefore, it is emphasized and should be appreciated that two or more references to “an embodiment” or “one embodiment” or “an alternative embodiment” in various portions of this specification are not necessarily all referring to the same embodiment. Furthermore, the particular features, structures or characteristics may be combined as suitable in one or more embodiments of the invention.
In the foregoing specification, the invention has been described with reference to the specific embodiments thereof. It will, however, be evident that various modifications and changes can be made thereto without departing from the broader spirit and scope of the invention as set forth in the appended claims. The specification and drawings are, accordingly, to be regarded in an illustrative rather than a restrictive sense.
