Supply Chain Management and Advanced Planning: Concepts, Models, Software, and Case Studies

570 Pages·2015·14.84 MB·English

by  Hartmut Stadtler

Springer Texts in Business and Economics
Hartmut Stadtler
Christoph Kilger
Herbert Meyr Editors
Supply Chain
Management
and Advanced
Planning
Concepts, Models, Software,
and Case Studies
Fifth Edition
Springer Texts in Business and Economics
Forfurthervolumes:
http://www.springer.com/series/10099

Hartmut Stadtler • Christoph Kilger (cid:129)
Herbert Meyr
Editors
Supply Chain
Management
and Advanced Planning
Concepts, Models, Software,
and Case Studies
5th Edition
123
Editors
HartmutStadtler ChristophKilger
InstituteforLogisticsandTransport Ernst&YoungGmbH
UniversityofHamburg Saarbrücken
Hamburg Germany
Germany
HerbertMeyr
DepartmentofSupplyChainManagement
UniversityofHohenheim
Stuttgart
Germany
ISSN2192-4333 ISSN2192-4341(electronic)
ISBN978-3-642-55308-0 ISBN978-3-642-55309-7(eBook)
DOI10.1007/978-3-642-55309-7
SpringerHeidelbergNewYorkDordrechtLondon
LibraryofCongressControlNumber:2014955737
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Preface
PrefacetotheFifthEdition
More than 15 years have passed since we started working on the first edition of
this book.A lothas happenedin the meantime. A dot-combubblehas grownand
burst. Another wave of lean managementhas rolled over the planning landscape.
Some people still seem to think that Advanced Planning and Lean Management
are exclusive philosophies although the automotive industry—as the prime father
to Lean—is the best example that both can and should complement each other
in a fruitful co-existence and synergy. New buzz words like profit velocity,
demandsensingandserviceorientedarchitecturehavecomeandgone.Oftenthey
disappearedevenfasterthantheyhaverisen.
During the 7 years since publishing our fourth edition consolidation on the
AdvancedPlanningSystems’(APS)softwaremarketcontinuedatanunabatedpace.
Thus,wedecidedtodosomehistoricalresearchandinsertedasortofgenealogical
tree of APS in Chap.16—in addition to our traditionally updated and extended
overviewofselected softwaresystemsin Chap.18.Theterm“Sales&Operations
Planning” is actually known for more than 25 years in the scientific literature.
Nevertheless,duringrecentyearsitcameupasarenewedconceptonthesoftware
andconsultingmarket.Wewilldiscusshowthisoldideaisinterpretedinamodern
softwareworldwithinseveralchapters.
Chapters 6 on Strategic Network Design, 8 on Master Planning and 12 on
Transport Planning partly show new authors. This gave reason to restructure and
revisetheircontentssubstantially.Withanewcasestudyofthespecialtychemicals
industry(Chap. 26),wedonotonlywelcomeanothernewauthor,butalsowillhave
a closer look at a “new” software suite and software vendor(at least as this book
isconcerned).Ofcoursealotoffurtherupdateshavebeenmade—byfartoomany
to be mentioned in this preface. Finally, a new editor has been affiliated. He not
onlywasanauthorsincethefirstedition,butalsoactedasaneditoroftheGerman
translationof“our”bookin2011.Thus,donotbesurprisedtofindathirdsignature
belowthispreface.
WearegratefultoChristianSeipl,whospenthoursoverhoursofhissparetimein
typesettinganddebuggingthisfifthedition.Also,weareindebtedtotheauthorsof
thisbook,whocontributedtheirwrittenknowledgeandalsotoallunnamedadvisers,
v
vi Preface
who contributed their unwritten knowledge. Last but not least, we would like to
thank the readers—the familiar ones, who are faithful since the first edition, but
also all new ones, who are warmly welcomedto dive into the world of Advanced
Planning.
Hamburg,Germany HartmutStadtler
Saarbrücken,Germany ChristophKilger
Hohenheim,Germany HerbertMeyr
February2014
PrefacetotheFourthEdition
Thehypeisover—andthisisfine!
AdvancedPlanningSystems(APS)havebecomeamaturetechnologyinthepast
years. Investmentsin APS have to undergothe same standardsoftware evaluation
andfinancialappraisalprocessasanyotherinvestment.Itnolongersufficestoargue
that“wehavetobeatthefrontedgeoftechnology”.
And still there is a large number of rewarding applications for APS. Three of
these have becomenew case studies in this fourthedition. Unfortunately,a fourth
casestudyhasbeenwithdrawninthelastminutebecausetheclientcompanyregards
itsAPSsolutionakeyelementofbecomingtheleaderinitssector—expertisewhich
theydonotwanttosharewiththeircompetitors.
A second developmentto mention is the tendency to avoid the term “System”
inAP“S”. Insteadsome preferthetermAdvancedPlanningModuleswhichbetter
reflects the capability to combine some of its modules with other software com-
ponents(e.g. for Supply Chain Event Management)to form an individualSupply
Chain (SC) solution. However, the information flows among modules described
in this book now even become more important for the quality of the SC solution
generated.Hence,thereisnoreasonforustorefrainfromthetermAPSortochange
theconceptofourbook.
Readers familiar with the third edition will realize that not only chapters have
beenreorganizedandupdatedtothestateoftheartbutalsothattherehasbeenmuch
fine-tuningoftechnicalissues like for the indexand thereferences.Thisis dueto
Christian Seipl who took over the “burden” of administering the chapters. Many
thankstohim!Wearealsoindebtedtoanumberofconsultantsandpractitionersfor
providingadviceandproofreadingpartsofthebook,especiallywithrespecttothe
descriptionofselectedAPS.
Nowitisuptoyou,dearreader,tomakethebestuseofthisfourthedition!
Hamburg,Germany HartmutStadtler
Mannheim,Germany ChristophKilger
June2007
Preface vii
PrefacetotheThirdEdition
Fouryearshavepassedsincethefirsteditionofourbook—andstillitsreadershipis
growingrapidly:YoumayevenbeabletobuyaChinesetranslationsoon!
The field of Supply Chain Management (SCM) and Advanced Planning has
evolvedtremendouslysincethefirsteditionwaspublishedin2000.SCMconcepts
have conquered industry—most industry firms appointed supply chain managers
and are “managing their supply chain”. Impressive improvements have resulted
from the application of SCM concepts and the implementation of Advanced
PlanningSystems(APS).However,in thelastyearsmanySCM projectsandAPS
implementationsfailed or atleast did notfullymeet expectations.Many firmsare
just“floatingwiththecurrent”andareapplyingSCMconceptswithoutconsidering
allaspectsandfullyunderstandingthepreconditionsandconsequences.Thisbook
provides comprehensive insights into the fundamentals of SCM and APS and
practicalguidancefortheirapplication.
What makes this book different from others in the field? First, the material
presentedis based on ourexperiencesgained by actually using and implementing
APS.Furthermore,wehavetriedtoextracttheessencefromthreeleadingAPSand
to generalize the results—instead of merely reporting what is possible in a single
APS. Second, this book is not just a collection of papers from researchers who
have come together at a single conference and published the resultant conference
proceedings.Insteadwe have structuredthe area of SCM and AdvancedPlanning
intothosetopicsrelevantforturningAPSsuccessfullyintopractice.Thenwehave
asked prominentresearchers,experiencedconsultantsandpractitionersfromlarge
industry firms involved in SCM to join our group of authors. As a result, this
edition(product)shouldbethemostvaluablesourceofknowledgeforourreaders
(customers).
Youmayhaveobservedthatcreatingourteamofauthorshasmuchincommon
with forming a supply chain in industrial practice. This story can be expanded
evenfurther:Severalauthorsarealsopartners(contributors)inothersupplychains
(authorgroups).Itisthetaskofthesteeringcommittee(editors)tomakeoursupply
chainworkandmakeitprofitableforeverypartner.Thismodelnotonlyworkedfor
the lifetime of a product’slife cycle but also twice for its relaunch. We hope that
oursupplychainwillstick togetherforsometimein thefutureforthebestofour
customers—YOU!
Whatisnewinthisthirdedition,apartfromtheusualupdateofchapters?
(cid:129) AsectiononstrategicissuesinSCMhasbeenaddedasasubsectionofChap.1.
(cid:129) ThecontentsofChaps.2and3arerestructuredwithagreateremphasisonSupply
ChainAnalysis.
(cid:129) LatestissuesandrecommendationsinStrategicNetworkPlanningnowhavebeen
preparedbytwoauthors(Chap.6).
(cid:129) A new chapter has been added showing how to generate production and
purchasing orders for uncritical items by utilizing the well-known MRP logic
(Chap.11).
viii Preface
(cid:129) The chapters on the Definition of a Supply Chain Project (Chap.15) and the
Selection Process of an APS (Chap.16) have been rewritten in light of new
experiencesandresearchresults.
(cid:129) Demand Fulfilment and ATP (Chap.9) now is based on several APS and thus
presentsourfindingsinamoregeneralizedform.
(cid:129) Therearetwonewcasestudies,onefromthepharmaceuticalindustry(Chap.25)
andonefromthechemicalindustry(Chap.20).Also,allcasestudiesnowfollow
acommonstructure.
This edition would not have been possible without the advice from industry
partnersandsoftware vendors.Manythanksto allofthemfortheir mostvaluable
help.Thisisalsothelastedition,whereJensRohdehasadministeredallthepapers
and preparedthe files to be sent to the publisher. Thankyou very much, Jens, for
thisgreatandperfectserviceandallthebestforthefuture!
Darmstadt,Germany HartmutStadtler
Mannheim,Germany ChristophKilger
April2004
PrefacetotheSecondEdition
SuccessStimulates!
Thisalsoholdstruewhenthefirsteditionofabookissoldoutquickly.So,wehave
createdthissecondeditionofourbookwithgreatenthusiasm.
Attentive readersof the firsteditionwill have realizedan obviousgapbetween
the scope of Supply Chain Management (SCM), namely integrating legally sep-
arated companies along the supply chain and the focus of Advanced Planning
Systems(APS)which,duetotheprinciplesofhierarchicalplanning,arebestsuited
for coordinating intra-organizationalflows. Now, collaborative planning is a new
featureofAPSwhichaimsatbridgingthisgap.Consequently,thisnewtopicisthe
mostapparentadditiontothesecondedition(Chap.14).
Buttherearealsomanyotheradditionswhicharetheresultofgreaterexperience
of the authors—both in industrial practice and research—as well as latest APS
softwaredevelopments.Examplesofnewmaterialsincludedare:
(cid:129) ThedifferenttypesofinventoriesanditsanalysisarepresentedinChap.2.
(cid:129) The description of the SCOR-model and the supply chain typology have been
enlargedandnowformaseparatechapter(Chap.3).
(cid:129) There is now a comparison of planning tasks and planning concepts for the
consumergoodsandcomputerassemblyindustry(Chap.4).
(cid:129) New developments in distribution and transport planning have been added
(Chap.12).
(cid:129) EnterpriseApplicationIntegrationisexplainedinChap.13.
(cid:129) Chapter17nowpresentsimplementationissuesofAPSingreaterdetail.
(cid:129) Somecasestudieshavebeenupdatedandextended(PartIV).
Preface ix
(cid:129) Rules of thumb have been introduced to allow users and consultants to better
estimate and control computational times for solving their decision models
(PartVI).
Like in the first edition we have concentrated on the three most popular APS
becausewe haverealized thatkeepingup-to-datewith its latest developmentsis a
verytime-consumingandchallengingtask.
SCM continues to be a top management theme, thus we expect our readers to
profitfromthisupdateandwishthemgreatsuccesswhenimplementingtheirSCM
solution.
Manythankstoallwhocontributedtothefirstandsecondedition!
Darmstadt,Germany HartmutStadtler
Mannheim,Germany ChristophKilger
January2002
PrefacetotheFirstEdition
During the late 1980s and throughoutthe 1990s information technology changed
modern manufacturing organizations dramatically. Enterprise Resource Planning
(ERP) systems became the major backbone technology for nearly every type of
transaction. Customer orders, purchase orders, receipts, invoices etc. are main-
tained and processed by ERP systems provided by software vendors—like Baan,
J.D.Edwards, Oracle, SAP AG and many more. ERP systems integrate many
processes, even those that span multiple functional areas in an organization, and
provideaconsistentdatabaseforcorporatewidedata.BythatERPsystemshelpto
integrateinternalprocessesinanorganization.
Mid of the 1990s it became apparent that focussing on the integration of
internal processes alone does not lead to a drastic improvement of business
performance.WhileERPsystemsaresupportingthestandardbusinessworkflows,
thebiggestimpactonbusinessperformanceiscreatedbyexceptionsandvariability,
e.g. customers order more than expected, suppliers deliver later than promised,
productioncapacityisreducedbyanunforeseenbreakdownofequipment,etc.The
correct reaction to exceptionslike these can save a lot of money and increase the
service levelandwill help to improvesales andprofits. Furthermore,state-of-the-
artplanningprocedures—forplanningsales,internaloperationsandsupplyfromthe
vendorswell in advance—reducethe amountof exceptionalsituations, helping to
keepbusinessinastandardmodeofoperationandturningouttobemoreprofitable
thanconstantlydealingwithexceptionalsituations.
Thisfunctionality—powerfulplanningproceduresandmethodologiesaswellas
quick reactions to exceptions and variability—is provided by Advanced Planning
Systems.AnAdvancedPlanningSystem(APS)exploitstheconsistentdatabaseand
integratedstandardworkflowsprovidedbyERPsystemstoleveragehighvelocityin
industry.Duetotheserecentdevelopments,softwarevendorsofAPSboostamajor