Manufacturing Planning & Control System Major Tasks restate business objectives in operations management terms ensure feasibility of plans identify gaps in current resources help formulate connective action-Suppliers prioritize activities - scheduling facilitate feedback

Keys to MPC Manufacturing Planning and Control System A complete, current and accurate database one set of records high emphasis on data accuracy quick correction of error in db accessible to all who need data System discipline Transparent logic

Production Plan First step in the planning process One of three high level plans Business Plan Sales Plan Production Plan differences between sales plan and production plan is the inventory plan Long term perspective Stated in aggregate units

Issues Considered Capacity management level chase mixed Requires coordination with marketing Demand management

Definition: document that defines the specific goods that specific shops will produce in definite quantities at definite times over a short-term horizon in accordance with the aggregate plan The MPS represents an agreement between marketing and manufacturing Master Production Schedule

A detailed disaggregation of production plan Time-phased statement of how over the planning horizon resources will be used to meet agreed-to commitments Tends to be: short time horizon more detailed product information (BoMs) more concern over capacity corporate plan quasi-contract updated regularly

What is the MPS? Plan showing availability Build schedule Stated in BoM terms

MPS Problems Overloaded Front End Loaded Unstable Incomplete Short Horizon Wishlist

Stability in MPS Balance need of OM for stability and marketing for change. Why is stability important? How introduced? timing fencing time fences denote different reaction to changes and willingness to accommodate change recognizes increasing cost of change as we near current time Different zones types of changes who approves who bears cost

MPS Principles The MPS must be in concert with the production plan The MPS must drive the entire materials management system Include all known requirements in the preparation of the MPS and the FAX Minimize the number of items needed to adequately express the MPS and the FAS

MPS – Master Production Schedule Short term (Aggregate) Production Plan families BOM – Bill of Material Routing file Key Terms from Ch. 14

Material Requirements Planning

MRP and Dependent Demand Dependent Demand demand that is derived consists of WIP + Raw materials concept of parent/component independent demand in MPS Problem with Dependent Demand information generated challenge - generating 100% CSL past approach - s,Q new approach - MRP

Prior to MRP Up to 1970s, extensive use of s,Q models why? Simple to use, limited information requirements, “optional” Why move to MRP? problems with s,Q models high levels of inventory high stockouts poor customer services “Order launch & Expedite”

Why MRP? (2) S,Q ignored BoM information ItemOQOH A300 0 B (comp)250 0 C200 0 D250 0 A uses 1 B; B uses 1 C; C uses 1 D What happens if we receive an order for 50 units of A?

Other Factors Major changes high cost of inventory increased availability of more powerful computers decreasing cost of computers MRP now supported by extensive body of software

MRP Elements Gross Requirements On-Hand Inventory Allocations Scheduled Receipts Net Requirements Planned Order Releases Time-phasing Parent/Component

MRP Elements Planning factors System nervousness Firm planning Explosion Time buckets Action bucket Rolling the Schedule Net Change vs. Regenerative MRP

Advantages of MRP Forward looking when planning (visibility) Useful simulator Provides valid, credible priorities priorities reflect actual needs, not implied needs. Provides mangers with control over the execution system Forms basis for building credible, valid formal system

Limitations of MRP only looks at materials, ignores capacity, shop floor conditions requires user discipline requires accurate information/data requires valid MPS not appropriate for all areas high volume production projects

Types of MRP Systems MRP Closed Loop MRP MRP II Distribution Requirements Planning DRP II Enterprise Requirement Planning

The Curve A B C D 7 >26 F 1 Mean 2.75