production planning and control

Sec-”A” Group 3

PRODUCTION PLANNING & CONTROL

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The need for Production Planning Demand Forecasting Aggregate Production Planning Strategies of Aggregate Planning Scheduling Workforce Planning Materials Requirement Planning Capacity Planning Production Control using JIT

Topics to be covered

PRODUCTION PLANNING AND CONTROL (PPC)

PRODUCTION: that transformation of raw materials to finished goods.

PLANNING: looks ahead, anticipates possible difficulties and decides in advance as to how the production, best, be carried out.

CONTROL: phase makes sure that the programmed production is constantly maintained.

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Addresses decisions on

AcquisitionUtilizationAllocation of limited production resources

Resources include the production facilities, labor and materials. Constraints include the availability of resources, delivery times for the products and management policies.

The need for Production Planning

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Main objective is to take appropriate decisions.

Typical decisions:Work force levelProduction lot sizesAssignment of overtimeSequencing of production runs

The need for Production Planning

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The need for Production Planning

Process Planning

Scheduling

Loading

Combining Functions

Dispatching

Follow – up

Corrective Action

Re-planning

Functions of PPC

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Objective

To predict demand for planning purposes

Laws of Forecasting

Forecasts are always wrongForecasts always changeThe further into the future, the less reliable the forecast will be

Demand Forecasting

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Demand Forecasting

Qualitative Demand Forecasting

Prediction MarketDelphi TechniqueGame TheoryIntentions and Expectations SurveysConjoint Analysis

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Demand Forecasting

Quantitative Demand Forecasting

Discrete Event SimulationQuantitative AnalogiesNeural NetworksData MiningCausal ModelsSegmentation

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Aggregate Production Planning

Objective:-To generate a medium-term production plan To establish rough product mixTo anticipates bottlenecksTo align capacity and workforce plans.

It is usually done for next 2 to12 months.Demand changes over a period of time at a faster rate than the resources. Aggregate planning offers strategies to absorb these fluctuations.

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Aggregate Production Planning

Assumptions in Aggregate Planning

The regular output capacity is the same in all periods. Cost is a linear function composed of unit cost and number of units. Plans are feasible : sufficient inventory capacity exists to accommodate a plan, subcontractors with appropriate quality and capacity are standing by, and changes in output can be made as needed.

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Aggregate Production Planning

Assumptions in Aggregate Planning

All costs associated with a decision option can be represented by a lump sum or by unit cost that are independent of the quantity involvedCost figures can be reasonably estimated and are constant for the planning horizon Inventories are built up and drawn down at a uniform rate and output occurs at a uniform rate throughout each period

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Aggregate Production Planning

Output of Aggregate Planning

Production quantity from regular time, overtime and subcontracted timeInventory held for determination of how much warehouse space and working capital is neededBacklog or stock-out quantity for determining the customer service levels

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Level plans

Use a constant workforce & produce similar quantities each time periodUse inventories and backorders to absorb demand peaks & valleys

Chase plans

Minimize finished good inventories by trying to keep pace with demand fluctuations

Strategies in Aggregate Planning

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Strategies in Aggregate Planning

ProductionDemand

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Unit

s

Time

Level plans

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Strategies in Aggregate PlanningU

nit

s

Time

Series1

ProductionDemand

Chase plans

Series1

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Strategies in Aggregate Planning

Hybrid or Mixed Strategies

Build-up inventory ahead of rising demand and use backorders to level extreme peaksLayoff or furlough workers during lullsSubcontract production or hire temporary workers to cover short-term peaksReassign workers to preventive maintenance during lullsInfluencing Demand

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Concerned with timetable of production

Scheduling arranges the different manufacturing operations in order of priority, fixing the time & date for the commencement & completion of each operation.

Types of scheduling

Forward scheduling Backward scheduling

Scheduling

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Scheduling

The pattern of scheduling differs from one job to another which is explained as below.

Master ScheduleProduction ScheduleManufacturing ScheduleScheduling of Job Order Manufacturing

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Workforce Planning

To find out and direct

Right peopleRight placeRight timeRight price

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Workforce Planning

Issues

Basic Staffing Calculations and labor hoursWorking EnvironmentFlexibility/AgilityQuality

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Materials Requirement Planning

MRP is a production planning and inventory control system used to manage manufacturing processes.

An MRP system has 3 major objectives

Ensure materials are available for production and products are available for delivery to customersMaintain the lowest possible level of inventoryPlan manufacturing activities, delivery schedules and purchasing activities

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Materials Requirement Planning

MRP steps

Takes output from the planning phase (master plan)Combines that with the information from the inventory record and product structure recordsDetermines a schedule of timing and quantities for each item

The basic idea is to get the right materials to the right place at the right time.

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Materials Requirement Planning

•Master plan

•MRP

•Capacity Req. plan

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Materials Requirement Planning

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Capacity Planning

The process of determining the production capacity needed to meet changing demands

Maximum amount of work that an organization is capable of completing in a given period of time

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Capacity Planning

Wrong Capacity

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Capacity Planning

Classes of capacity planning

Lead strategy Lag strategyMatch strategy

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JIT is the technique for reducing inventories and elimination of waste in the production system.

Objectives

To eliminate wasteTo improve qualityTo minimize lead timeTo reduce costsTo improve productivity

Production Control using JIT

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Pull production and kanban

JIT is associated with pull systems.

Toyota was the first developer of kanban system.

Examples

McDonalds'Office Xerox Paper

Production Control using JIT

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Issues

JIT InterdependenciesImplementing IssuesJIT purchasingExpected Outcomes

Production Control using JIT

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