Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Manufacturing Planning and Control MPC 6 th Edition Chapter 1

1-2 Definition A Manufacturing Planning and Control system provides information and support, which enables managers to efficiently direct the flow of material, manage the utilization of people and equipment, and respond to customer requirements by utilizing the capacity of suppliers, internal facilities, and, in some cases, customers. MPC is often a module in an ERP system.

1-3 Agenda Simplified MPC frameworkSupport activities of an MPC systemMatching the MPC system to requirementsMPC Classification schemaEvolution of MPC systemsPerformance indicators

1-4 An MPC System Framework Front End Activities and systems for overall direction setting Engine Systems for detailed material and capacity planning Back End MPC execution systems

1-5 Resource planning Sales and operations planning Demand management Master production scheduling Detailed capacity planning Detailed material planning Material and capacity plans Shop-floor systems Supplier systems Enterprise Resource Planning (ERP) System Front End Engine Back End Manufacturing Planning and Control System

1-6 Support Activities Long Term The system is responsible for providing information to determine: The appropriate amount of capacity (including supplier capacity) to meet the market demands of the future. Provide the appropriate mix of human resource capabilities, technology, and geographic locations.

1-7 Support Activities Intermediate Term The fundamental issue is matching supply and demand in terms of both volume and product mix. Planning for the right logistics Maintaining appropriate inventory levels Providing delivery information to customers Communicating requirements to suppliers Planning capacity to determine employment levels, budgets, overtime and subcontracting needs, etc.

1-8 Support Activities Short Term There is a need for detailed scheduling of resources to meet production requirements. Key Point - People working on the right things The MPC system must track the use of resources, monitor execution results, and provide information to managers, customers, and suppliers

1-9 Key Areas of Influence on MPC system design Degree of supply chain integration Customer roles and expectations Needs of management

1-10 Matching MPC System with the Firm needs The MPC system should change as competitive conditions, customer expectations, supplier capabilities, and internal needs change. The trend is towards on-line data access and systems–replacing inventory with speedier information exchange Physical changes (outsourcing, etc.) The MPC system must change to match the firm’s strategy

1-11 MPC Classification Schema Repetitive Just-in-time MRP Project Number of subparts SecondsMinutesDaysWeeksMonths Time between successive units Flow

1-12 MPC Classification Schema Flow (continuous production–chemical plants, food, etc.) Repetitive (longer production cycles– automobiles) Just-in-Time (shorter production cycles– TVs, personal computers) MRP (management of complicated parts product–airplanes) Project (unique, long duration–ships).

1-13 Evolution of MPC Systems The MPC system must adapt to meet changing company needs Periodic MPC system audits compare system responses to the requirements of the marketplace System focus Personnel training

1-14 Equipment utilizationOutput results Costs associated with different departments, products, labor utilization, and project conditions Measures of customer satisfaction such as late deliveries, product returns, quantity errors, and quality Performance Indicators

1-15 Principles The framework for the MPC is general, and all 3 phases must be performed, but specific applications must reflect particular firm conditions and objectives. In supply chain environments, the MPC must coordinate the planning and control efforts. MPC systems should support the strategy and tactics pursued by the company. Different Manufacturing processes dictate the need for different MPC designs.

1-16 Principles The MPC should evolve to meet changing requirements in the market, technology, products, and processes. The MPC should be comprehensive in supporting the management of all manufacturing resources. An effective MPC can contribute to competitive performance by lowering costs and providing greater responsiveness to the market. In firms that have an integrated ERP system and database, the MPC system should integrate with and support cross- functional planning through the ERP system.

1-17 Quiz – Chapter 1 In the MPC process, capacity decisions (equipment, facilities, suppliers, etc.) are most likely to occur in what time horizon? In the MPC process, detailed scheduling decisions are most likely to occur in what time horizon? Master Production Scheduling (MPS) and Resource Planning are a part of which MPC phase? Measurement and Control are a part of which MPC phase? Products that are part of a one-time production process (e.g. bridges or aircraft carriers) would most likely use which form of MPC?