APICS

CPIM – CERTIFIED IN INVENTORY

AND PRODUCTION MANAGEMENT
 DEFINITIONS

Supply Chain: is a network of re tailers, distributors, transporters, storage, facilities, and

suppliers that participating in the production, de livery, and sale of a product or service to the
consumer.

Enterprise Resources Planning : is a framework for organizing, defining, and standardizing the
business processes necessary to effectively plan and control an organization so it can use its
internal knowledge to see k external advantage

Lean: minimization of t he amount of all the resources (including time) used in the various
activities ·of the enterprise

Theory of Constraints: A philosophy that focuses the resources of an organization on managing

throughput and financ ial performance .
Demand management is the function of recognizing all sour ces of demands for goods and services
to support the marketp lace .

Demand management serves as a key input into the sales and operations plan and master production
schedule (MPS)

Capacity Management: includes the function of establishing, measuring, monitortng, and

adjusting-limits or levels of capacity to

execute all schedules.

Planning: process of setting goals for the organization and choosing how to use

t h e o rg a n i z a t i o n ' s r e s o u r c e s t o a c h i e v e t h e m .

K e y p e r f o r m a n c e i n d i c a t o r s a r e m e t r i c s u s e d t o a s s e s s o rg a n i z a t i o n a l p e r f o r m a n c e . a g a i n s t
strategic and tactical goals.
Planning
Setting goals for the organization and choosing how to use the organ ization's resources to
achieve them

• Strategic planning/hoshin pl anning

• Business planning

• Sales and operations planning, production planning, and resource requirements

planning

• Master production scheduling and rough cut-capacity planning

• Material requirements planning and capacity requirements plann ing

• Final assembly schedu ling and Input/ output control

• Advanced planning and scheduling

• Project management

• Execution and Control

Supply: actual or planned provision of a product, component, or service
and its sustainability

Inventory: stocks or items used to support production (raw materials and

work-inprocess items), supporting activities (maintenance, repair, and
operating supplies), and customer service (finished goods and service parts
Inventories

Classified: Monitored: Replenish:

• Buffer • ABC classification • Pull
• Transportation • Physical inventory • Push
• Lot size
• Cycle counting
• Anticipation
• Record accuracy
• Fluctuatio n
• Days of supply
• Hedge
• Inventory turns.
• MRO
Acounting methods to value inventory

• First in first out

• Last in first out

• Average cost

• Standard cost
 Purchasing Cycle
The function and responsibility for understanding demand, sourcing,
procuring materials, supplies, or services, receiving goods, and approving
invoices for payment

Begins with: Sourcing: Order processing :

• Requisition • Supplier selection • Purchase release

• Material requirements • Certification • Defining terms and

planning (MRP) • Agreements conditions

• Output • Monitoring supplier

• Partnerships,
performance
• Kanban • Vendor-manage inventory
Order Completion:
• Buffer (VMI).
• Receipts of goods
• Total acquisition costs
• Approval of invoice
Distribution

Distribution: The activities associated with the movement of material between

the supplier, manufacturer, and customer.

• Transportation • Communications network necessary for

• Warehousing effective management
• Inventory control • Physical distribution
• Material handling • Return of goods to the manufacture
• Order administration
• Site and location analysis
• Industrial packaging
• Data processing
Distribution

Transportation: Planning, scheduling, and controlling activities related to mode, carrier type,
and movement of inventories across the supply chain.
• Warehousing
• Inventory control
• Material handling
• Order administration
• Site and location analysis
• Industrial packaging
• Data processing
Warehousing: activities related to receiving, storing, and shipping materials
Distribution inventory: service parts and finished goods located in a distribution system.
Distribution channel: route, from raw materials through consumption, along which products
travel
Transaction channel: is-a distribution network that deals with change of ownership of goods and
services including the activities of negotiation, selling, and contracting
APICS CPIM MAJOR SUBJECTS

I. Master Planning of Resources

II. Detailed Scheduling and Planning

III. Execution and Control of Operations

IV. Strategic Management of Resources

MASTER PLANNING OF RESOURCES

Principles and techniques of: Includes:

- Demand management - Forecasting

- Sales and operations planning - Order servicing

- Master scheduling - Demand shaping

- Distribution planning - Customer relationship management

Integration of the above elements - Distribution network

- Replenishment
Demand management

Successful planning requires an understanding of how components,

concepts, and linkages of the strategic plan, the business plan, and the master
planning of resources interact. Principles include:,

• Planning hierarchy

• Relating the planning process to manufactu ring and service environments

• Demand forecasting concepts

• The relationship between the purpose of the forecast and required timeliness

• Management considerations related to fo recast method selection

• Selecting a time horizon andinterval, and a level of aggregat ion

Techniques of forecasting demand

a) Application of basic qualitat ive and quantitative techniques

b) Evaluation of forecasting performance

c) Collaboration with customers and sup pliers to improve forecast accuracy

Management of the Customer interface

Involves making realist ic order.delivery promises and ma intaining positive

customer relationships. Principles and techniques include:

Customer relationship management (CRM) concepts

b. Setting customer service pol icies, safety stock, and performance tar gets

c. Maintaining effective custome r communications

d. Techniques for measuring o rder delivery performance

e. Influencing demand to better align with supply

Sales and Operations Planning (S&OP)

To link strateg ic goals to operat ions and coordinate the various plann ing efforts
of the functional areas, inc luding operations, sales, so urcing, product
development, marketing , and finance i n a variet y of business environmen ts

Principles of sales and operat ions planning: S&OP is the process executive
management uses to control and gu ide the bus iness

lt coordinates the various business functions to ensure they support the overall
organizationa l strategy and enhance customer servi ce.

lt integrates the multip le plans deve loped within a business and prov ides
direction for more deta iled short -term to medium-te rm planning.
DETAILED SCHEDULING AND
PLANNING

- Inventory

- Management

- Material requirements planning

- Capacity requirements planning

- Procurement and supplier planning

- Supply chain strategies related to scheduling, planning, and sourcing

EXECUTION AND CONTROL OF
OEPERATIONS

Encompasses the principles and techniques necessary to execute, control,

and manage operations, and participate in design decisions.

Provides feedback about how good plans are be ing executed, as well as
providing information for customers and suppliers abo ut the status of
services and products in process.
STRATEGIC MANAGEMENT RESOURCES

- Higher-level thinking on strategic planning and implementation of

operations

- Understanding of how market requirements and strategic position of the

organization drive the resources and processes of an organization.