OVERVIEW

If you are reading this book, you likely are an operations person by trade. You may have been in operations all your life. I know this because, like you, I am a life-long operations employee and manager. I like the smell of the factory. Making things from raw materials and doing it with speed and flexibility is an art well appreciated by people like us. That is what operations planning is all about making things with cost effectiveness, speed, and high customer satisfaction. Class A ERP process definitions in the operations planning space help to ensure predictable outcomes to schedules.

Operations planning starts with the demand plan and an understanding of the capacities and/or process expectations of the business. With this understanding of process expectations comes the necessary definition of inventory strategy. Too often, inventory strategy is not given the credit it deserves.

Too often, inventory strategy is not given the credit it deserves.

Inventory strategy is a key design element at this point in the Class A ERP discussion. This term is used to designate how inventory is to be positioned in the overall manufacturing, supply chain, and customer service processes. At The Raymond Corporation, the overall product mix was about 80 percent make-to-order (MTO) or engineer-to-order (ETO) products and 20 percent make-to-stock (MTS) products. Having more than one strategy is pretty typical. Understanding and acknowledging it helps to put the right process in place to meet inventory goals and cost requirements.

In MTO businesses, the inventory...