By Ann K. Gatewood, Tony K. Arnold Steve Chapman
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Additional info for Introduction to Materials Management
Operations represent supply, whereas marketing represents demand. The SOP is the forum in which the production plan is developed. Although the strategic plan and strategic business plan are usually updated annually, sales and operations planning is a dynamic process in which the company plans are updated on a regular basis, usually at least monthly. The process starts with the sales and marketing departments, which compare actual demand with the sales plan, assess market potential, and forecast future demand.
The term m aster production schedule is the end result of this process. Usually, the plans are reviewed and changed weekly or monthly. The Material Requirements Plan The material requirements plan (MRP) is a plan for the production and purchase of the components used in making the items in the master production schedule. It shows the quantities needed and when manufacturing intends to make or use them. Purchasing and production activity control use the MRP to execute the purchase or manufacture of specific items.
The development of the strategic plan is the responsibility of senior management. Using information from marketing, finance, production, and other functions the strategic plan provides a framework that sets the goals and objectives for further planning by the marketing, finance, engineering, and production departments. Some companies have adopted a special approach of establishing vision statements and goals as part of the planning process. Tactical work plans are established for the visions to allow all parts of the organization to move systematically toward the overall goal.