Supply Chain Definitions .com




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Planning Definitions (additional definitions coming soon)

Capacity Requirements Planning (CRP):  a process for projecting resource requirements, for both labor and machines, for key work areas. It helps you compare available capacity to required capacity.
Inputs include open orders, planned order releases and routing files. Output includes the number of hours of work by work center (load profile).

Demand Planning -

Lead Time - the time between the need for goods and the receipt of the goods. This time can be made up of order prep time, manufacturing time, transportation time, receiving time and quality check time.

Maximum Stock -

Order Point System:  an inventory/planning method. A replenishment order is placed once the the inventory drops below a predetermined Reorder Point.

Planned Order Release:  data from Material Requirements Planning that tells when a production order should start (it is offset by the appropriate lead time).

Planning Time Fence (PTF): a period of time in the planning horizon that is used for planning purposes. MRP runs will create planned orders just outside of the planning time fence. If an order was placed within the planning time fence it would adversely effect component schedules, capacity plans and other orders.

Production Planning -

Reorder Point (ROP) : a pre-determined number usually calculated based on a number of factors. Once the inventory drops below the ROP, a replenishment order is created. 

Rough Cut Capacity Planning(RCCP):  a type of capacity planning. It compares requirements to the available capacity at key work centers or critical bottlenecks. it attempts to balance workloads broadly. It often takes into account the areas of labor, machinery, storage space, and suppliers capacity.

Supply Planning -

Safety Stock: stock held a distribution center that is in excess of the what the company expects to sell. The purpose of Safety Stock is to act as buffer inventory to account for unexpected customer orders, longer than expected manufacturing or transportation time.

  The definitions contained on this website are the opinions of the webmaster. Different businesses may have different definitions. Please check numerous sources to ensure that you have the correct definitions.
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Email me at john@supplychainmetric.com This site is owned and maintained by Michelle Taras & John Taras CPIM, PMP

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SupplyChainMetric.com - an overview of various measurements used in a supply chain.

SupplyChainPurchasing - a review of purchasing in a supply chain.

Inventory Definition - a basic overview of inventory terms.

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