Managing Production and Supply Chains An introduction to the ProSim production management simulation

 A virtual company which manufactures & markets three products (X, Y, Z)  Existing supply chain processes in place for key Marketing & Sales, Production Planning & Control, Purchasing & Payment  You will manage the PP&C process  Process redesign or supply chain restructuring are out of scope for now

Products Bills of Materials Toy dollToy car w/doll Toy house w/car & doll

Process Layout

 What is the goal … or The Goal?  How is this measured?  What do we need information-wise to make Goal oriented decisions?  What analysis or information systems based tools might help with the details and mechanics? Throughput InventoryOperating Cost

Structural Issue: Rough Cut Capacity Limit  Visit ProSimPlanner WorksheetProSimPlanner Worksheet  Where is the bottleneck?  Maximum throughput?  Assumptions regarding labor productivity, efficiency, and rejects

Structural Issue: Make vs. Buy for Parts  Purchase cost?  Make cost: Labor (labor productivity?) Machine time (machine efficiency?) Materials (reject rate?)

Sales: Estimating Customer Demand  Products are produced based on weekly schedules  Products are shipped at the end of each ‘month’ (i.e., every 4th week at the end of weeks 4, 8, 12, …)  Last year’s monthly demand data are available  Current month sales order base forecasts are adjusted weekly

Production Planning: What to produce week by week  Master Production Scheduling (MPS)  Materials Requirements Planning (MRP)

Human Resources: Operator Hiring & Training  For ‘simplicity’ we will only use workers 1 thru 9 this term; you can fire if you want but cannot hire (or re-hire).

Purchasing: Order size for parts?  Parts demand?  Ordering & setup costs?  Holding & carrying costs?  Classic EOQ conclusion?

Purchasing: Ordering materials  Materials demand?  Ordering & setup costs?  Holding & carrying costs?  Classic EOQ conclusion? (watch time units – week, month, year?)  Volume discounts?  Adjusted EOQ conclusion?

Plant Management: Plant level decisions  Quality control plan  Facility maintenance plan

Production Scheduling: Assigning operators, hours, machines, products & parts  True execution point – creating the weekly schedule  Communicate plant managers and purchasing decisions  Implement human resources recommendations  Convert production planners estimates to actions

Where we go from here  It’s a deep looking pool but time to jump in and get started  Complete the reading and assessment  Look for in class lecture help

Managing Production and Supply Chains End of presentation