van Kh Karel Donselaar

The impact of material coordination concepts on planning stability in supply chains

The goods flows in supply chains can be managed based on either the purchase orders of the next company in the chain or on the demand information from the end customer in the total supply chain. Many standard software packages which are meant for controlling goods flows are based on the purchase orders of their immediate customers (in accordance with the MRP logic). In this paper it is investigated how the type of demand information used influences the stability of the planning in the supply chain. For this purpose a simulation experiment was set up, using data from a truck manufacturer in the Netherlands. This company was confronted with the choice to either stick to its own planning logic (based on undistorted demand information from the end of the supply chain) or to change over to a standard package based on the MRP-logic. This experiment reveals how instable the planning in a supply chain may become if the wrong demand information is being used. The experiment also shows which factors in the production environment as well as in the market place have the biggest impact on the instability of the planning. The results were discussed with the development department of a major software company. Based on the results the software company is now considering to adapt the planning logic in their standard software package.

Performance measurement in the transportation and distribution sector

In the transportation and distribution (TD first they were split into 11 different segments and next their financial and operational data were gathered and compared. Based on the results of the project, the Dutch national organisation for T&D companies (TLN) has decided to adopt the benchmarking procedure developed in this project and to apply it to all 2,000 medium‐sized T&D companies, who are members of TLN. They will use it as a tool to assist their members in finding opportunities for improvement at the individual company level and to monitor the performance of the sector as a whole.

Commonality and safety stocks

Abstract Introducing or increasing commonality in product structures is advocated frequently. However, introducing commonality gives rise to two questions: “Is it advantageous (in terms of service level) to keep common items at stock?” and “How should stocknorms be determined for divergent systems?” It will be shown that in the cases of stationary demand, no lot-sizing and unlimited capacity, the main deterioration of the service level is due to retaining common items in a depot. The impact of imbalance between inventories on the service level will appear to be negligible. This observation will lead to a rule to determine stocknorms for divergent systems which is as simple as the classical rule for the one-stockpoint case.

Modelling handling operations in grocery retail stores: an empirical analysis

Shelf stacking represents the daily process of manually refilling the shelves with products from new deliveries. For most retailers, handling operations are labour-intensive and often very costly. This paper presents an empirical study of the shelf-stacking process in grocery retail stores. We examine the complete process at the level of individual sub-activities and study the main factors that affect the execution time of this common operation. Based on the insights from different sub-activities, a prediction model is developed that allows estimating the total stacking time per order line, solely on the basis of the number of case packs and consumer units. The model is tested and validated using real-life data from two European grocery retailers and serves as a useful tool for evaluating the workload required for the usual shelf-stacking operations. Furthermore, we illustrate the benefits of the model by analytically quantifying the potential time savings in the stacking process, and present a lot-sizing analysis to demonstrate the opportunities for extending inventory control rules with a handling component.

How to release orders in order to minimise system inventory and system nervousness

Abstract On the initiative of Baan, a global ERP-software supplier, and DAF Trucks, a Dutch truck manufacturer, research was carried out to find the optimal order release decisions. This article describes the impact of these decisions on the amount of system inventory and the system nervousness. With the use of a simulation tool different scenarios were modelled. In the simulation experiment the following parameters were evaluated: • The use of MRP versus the use of Line Requirements Planning (LRP) for planning orders. • The use of lot-sizes with a fixed order quantity (FOQ) versus a period order quantity (POQ). • Releasing orders with complete series versus releasing orders without complete series. All the scenarios were evaluated for a more deterministic (10% demand variability) and a more stochastic (100% demand variability) environment. The first goal was to obtain a predetermined service level, the second goal was to minimise inventory and the third goal was to minimise nervousness. With an equal service level in all scenarios, LRP with releasing orders without complete series outperformed MRP in all scenarios concerning inventory. For minimising nervousness the use of FOQs instead of POQs performed better. So for minimising both inventory and nervousness LRP with order release without complete series and FOQs should be chosen.

The use of MRP and LRP in a stochastic environment

Abstract In a multi-echelon production/inventory system the material flow between successive stages has to be coordinated. A number of concepts are available for this material co ordination. Material requirements planning (MRP) is a well-known example. Unfortunately, the MRP concept also has a number of disadvantages. Especially in a stochastic environment, the MRP concept is not very efficient. An alternative concept for material co-ordination will be introduced and evaluated.