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
Production system design
OPERATIONAL DECISIONS
Production system run
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/production system design
Objectives
Product, process, capacity, localization, layout and work system design
Product design (What products? )
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?)
Work system design (Job Design and Work Measurement )

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

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

6. Characteristics of Production Planning Levels
OBJECTIVE OF PLANNING
FACILITY
PLANNING HORIZONT
PLANNING PERIOD
Strategic Planning
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 components
Department/cell/ work centre

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