Process Management

It has often been said, the key to successfully managing inventories is more than just identifying Re-ordering Policies and developing Forecasting Practices, rather it necessitates developing and incorporating best practices in aggregate planning while mapping process practices.

The purpose for any business to have Inventory is to generate revenue as a result of satisfying their customer requirements. To satisfy customer requirements Finance, Operations, Logistics, Distribution, Product Development and Sales team work cross-functionally together to balance supply and demand. Since planning occurs several months or even years out, it is very difficult to know exactly how much of a specific product will be needed, but businesses should be able to determine how a larger group of similar products will sell. By looking at things at an aggregate level for planning meaning at the level of major groups of products, the Operations Team can develop an operations plan as an output of the process done by product families.

The main purpose of Aggregate Planning is to determine the optimum combination of workforce level , production rate, and inventory needed on hand. It requires a cooperated effort from Finance, Operations, Logistics, Distribution, Product Development and Sales team .The typical timeframes fall under Short-range planning, Long-range planning, and Intermediate-range planning. Short-range planning focusses mostly on scheduling production and shipment orders from one day to six months. Long-range planning focusses manufacturing and service processes and logistic activities that deliver the product to the customer over the next 3 to 5+ years. Intermediate-range planning focusses on forecasting, demand management, sales and operations planning for the next 3-18 months. The determination of the production rates by product group or other broad/major categories during this time period is referred to as the Aggregate Operations Plan which translates the businesses...