Page 84 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes MRP II systems have been implemented in most manufacturing industries. Some industries need
specialised functions e.g. lot traceability in regulated manufacturing such as pharmaceuticals
or food. Other industries can afford to disregard facilities required by others e.g. the tableware
industry has few starting materials – mainly clay – and does not need complex materials planning.
Capacity planning is the key to success in this as in many industries, and it is in those that MRP
II is less appropriate.

Task Would you suggest the basic difference of MRP and MRP-II techniques?

4.7 Distribution requirement planning

A supply channel is composed of three structures. At one end of the channel is the manufacturer.
The manufacturer focuses on the development and production of products and originates the
distribution process. The terminal point in the channel is the retailer who sells goods and services
directly to the customer for their personal, non-business use. In between the two lies a process
called distribution, which is more difficult to define. One involved in the distribution process is
labeled a “distributor.” The APICS Dictionary describes a distributor as “a business that does not
manufacture its own products but purchases and resells these products. Such a business usually
maintains a finished goods inventory.” The proliferation of alternative distribution forms, such
as warehouse clubs, catalog sales, marketing channel specialists, and mail order, have blurred
functional distinctions and increased the difficulty of defining both the distribution process and
the term distributor.

One ultimately could maintain that distributors include all enterprises that sell products to
retailers and other merchants—and/or to industrial, institutional, and commercial users—but
do not sell in significant amounts to the ultimate customer. According to this definition, most
companies that are involved with the disbursement of raw materials and finished products belong,
in one sense or another, to the distribution industry. By adopting this definition, distribution is
expanded to cover nearly every form of materials management and physical distribution activity
performed by channel constituents, except for the processes of manufacturing and retailing.

Distribution involves a number of activities centered around a physical flow of goods and
information. At one time the term distribution applied only to the outbound side of supply chain
management, but it now includes both inbound and outbound. Management of the inbound flow
involves these elements:
1. Material planning and control
2. Purchasing

3. Receiving
4. Physical management of materials via warehousing and storage
5. Materials handling
Management of the outbound flow involves these elements:

1. Order processing
2. Warehousing and storage
3. Finished goods management
4. Material handling and packaging

78 LoveLy professionaL university