1. Production Management System2
Production Management System
Strategic and Operation Decisions 1

2. DECISIONS IN OPERATIONS/PRODUCTION MANAGEMENT
EFFECTIVNESS
Are we doing the right things?
STRATEGIC DECISIONS
Operations system design
( preparation)
OPERATION DECISIONS
Production run
(activity)
EFFICIENCY
Are we doing the things right?

3. Strategic Decisions in Production Management
STRATEGIC DECISIONS (PRODUCTION SYSTEM DESIGN)
Focoused
EFFECTIVNESS
Are we doing the right things ?
Phase
Operations system design
Objectives
Product, process, capacity, localization, layout and work system design
Product design (What product mix to produce?)
Process design (How to produce? What processes to choose? Make or buy?)
Capacity planning (How much to produce? )
Localization choice (Where to produce? )
Facility layout design (What layout to choose? How facilities should be arranged (layout)?
Work system design (Job Design and Work Measurement )

4. Operation decisions in Production Management
Focoused
EFFICIENCY
Are we doing the things right ?
Phase
Operation of Production System
Objectives
Production Planning and Control in order to manufacture required products
Production planning – what output levels for the forthcoming periods?
Master Production Scheduling (short term planning) – what, how much and when to produce the final products
Material Requirements Planning (short term planning) – what, how much, when to order (production orders and purchase orders)
Production Control – production orders dispatching and coordination, priority of production orders,
Purchasing Control – purchasing orders dispatching and coordination

5. PRODUCTION MANAGEMENT SYSTEM
LONGTERM PLANNING
Strategic Plan
MIDTERM PLANNING
Production Planning (aggregate)
PLANNING STAGE
Master Production Schedule
SHORTTERM PLANNING
Material Requirements Planning
CONTROL STAGE
(execution)
Purchasing Control
Production Control

6. Integration of Management Functions and Management Stages in Enterprise
DISTRIBUTION
PRODUCTION
PURCHASING
MANAGEMENT STAGES
MANAGEMENT FUNCTIONS
PLANNING
ORGANIZATION
LEADERSHIP
CONTROLING
Planning – determining of production objectives and plans and the ways of their achievement
Organization – resources assignment to perform the plans
Leadership – motivating and directing the plans performance
Controlling – assessment of plans execution and making correction activities

7. Management Contuity Loop (Deming weel)
Planning Stage
1. PLAN
4. ACT
2. DO
Control Stage
(execution)
3. CHECK
Plan. Work planning
Do. Work execution
Check. Check results
Act. Plan revision if needed

8. Production planning levels in organisation
Long range
STRATEGIC
PLANNING
SOP
AGGREGATE
PRODUCTION PLANNING
MPS
MASTER PRODUCTION SCHEDULING
MRP
MATERIAL REQUIREMENTS PLANNING
PAC DETAILED SCHEDULING (PRODUCTION ACTIVITY CONTROL)
Short range
High specific

9. Characteristics of Production Planning Levels
OBJECT OF PLANNING
FACILITY
PLANNING HORIZONT
PLANNING PERIOD
STRATEGIC
Product mix Production program
Company
> year
(few years)
year
Production Planning
Product families
Enterprise
< year
month
Master Production Scheduling
Final products
Plant
< few months
few weeks
week, day
Materials Requirements Planning
Produced and purchased componements
Department/ work centre