bolton - introduction
DESCRIPTION
Introduction to forecastingTRANSCRIPT
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Manufacturing Resource PlanningM&IS 34064 Section 001
David F. Bolton, CFPIM, C.P.M. Materials Manager, Rotek Inc.
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Session 1
Manufacturing v. Service Organizations Customer Influence in Design Process Categories Order Winners and Qualifiers Business Environment Issues Process Analysis and Information Flows General Information Flows
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Manufacturing Resource Planning (MRP II)
“A method for the effective planning of all resources of a manufacturing company”
—APICS Dictionary
Objective: to integrate the resources of an organization
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Introduction
Introduction of planning and control–all businesses use some form–management must exploit principles
discussed in this text to exceed What impact does the customer have on
the whole selection process?–What system to use is influenced by you
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Manufacturing Planning and Control
Involves Production planning Implementation and control Inventory management
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1.1 Manufacturing v. Service Operations
What does a manufacturing firm provide? ...example
A service firm?…example
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1.1 Manufacturing v. Service
Timing–how long would you wait to have a dishwasher
repaired? Customer Contact
–ever had a poor customer service rep? Quality
–how would it be measured? Inventory
–stored capacity (service at 100% for spares)
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1.2 Customer Influence in Design
Design of the planning and control system is influenced by the customer
Make-to-stock (MTS) Assemble-to-order (ATO)
–package-to-order (breakfast cereal sizes) Make-to-order (MTO) Engineer-to-order (ETO)A number of issues influence these decisions...
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Wealth Creation
What is wealth? Where does wealth
come from? How can we increase
our wealth? How can we add value?
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External Environment
World competition Quality Customer
expectations
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Lead Time
“A span of time required to perform a process”—APICS Dictionary
Delivery lead time “The time from the receipt of a customer order to the
delivery of the product”—APICS Dictionary
Cumulative lead time “The longest planned length of time to accomplish the
activity in question”—APICS Dictionary
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Manufacturing Strategies
Make-to- Stock
Design
Inventory Manufacture Assemble Ship
Delivery Lead Time
Manufacture Inventory Assemble Ship
Manufacture Assemble Inventory Ship
Purchase Manufacture Assemble Ship Engineer-to-Order
Make-to- Order
Assemble- to-Order
Delivery Lead Time
Delivery Lead Time
Delivery Lead Time
Reprinted with permission, J.R. Tony Arnold, Introduction to Materials Management, third edition, Prentice-Hall, 1998
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1.3 Process Categories
The customer influence can also impact the process used by the firm to deliver...
Project Job Process Batch or Intermittent Processing Repetitive or Flow Processing ContinuousWhat are some examples of each, and why?
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Manufacturing Processes
ContinuousProduction
RepetitiveProduction
Product Layout
Intermittent Production(Job Shop)
Process Layout Project Layout
Manufacturing Processes
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Product Layout
Workstations in sequence needed to make product
Work flows at a nearly constant rate Little work-in-process inventory
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Characteristics of Product Layout
Limited range of similar products Dedicated workstations Sufficient demand Capital intensive
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Advantages of Product Layout
Little work-in-process inventory Short throughput and manufacturing lead
times Lower unit cost
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Process Layout
Reprinted with permission, J.R. Tony Arnold, Introduction to Materials Management, second edition, Prentice-Hall, 1996
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Characteristics of Process Layout
Intermittent lot production Many different parts processed at
workstations General-purpose machinery Similar types of skills and equipment in
each department Work moves only to required stations
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Characteristics of Process Layout
Relatively easy to change product or volume
Complex and expensive production and inventory control
High work-in-process inventory levels Longer lead times
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Product ProcessCapital costFlexibilityAnnual setup costRun costWork-in-process inventoryProduction and inventory controlcostsLead time
Product Layout vs. Process Layout
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Characteristics of Project Layout
Used for large, complex projects Project remains in one location for
assembly Avoids cost of moving the product
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Business Strategy
To meet customer expectations, a company must be market oriented.
All functions in a business must support this concept.
Operations must be tuned to meet the needs of the marketplace.
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Customer Expectations
Meeting customer expectations requires good communications
Understanding customer needs Two-way communication Working with customers to solve design
and production problems Freeness and openness
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1.4 Order Winners and Qualifiers
Characteristics that provide value to the customer
Price–standard (catalog)–custom (negotiated)
Quality–tangible (conformance, reliability)–intangible (aesthetics, brand)
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1.4 Order Winners and Qualifiers
Characteristics that provide value to the customer...
Delivery–speed–reliability
Pre- and post-sale service Flexibility (product and volume)
–volume–variety
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Customer Expectations (Cont.)
Order qualifiersCompetitive characteristics needed to be a viable competitor
Order winnersCompetitive characteristics that cause customers to choose firm’s products and services
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1.5 Business Environment Issues
The business must understand their market. Customer “learning”
–quality as an order winner v qualifier Competitor moves
–may change strategies (price once a winner, now a qualifier
Multiple markets (may influence system) Product design changes
–technology rapidly changing
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1.6 Process Analysis, Info Flow
The business must understand its internal process and information flow...
Control and reporting points–MRP and many reporting points–JIT and few reporting points
Process analysis and improvement–process mapping–process improvement–process reengineering–value stream mapping
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1.6 Process Analysis, Info Flow
Process Mapping–developing a detail view of the flow of
information• how complete?• How efficient?• Eliminate redundancy• how effective?
Process improvement–Kaizen events
• continuous improvement
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1.6 Process Analysis, Info Flow
Process reengineering–radical changes in processing possible?
• Flow v. batch production? Value stream mapping
–start with customer and map operations–determine takt time
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1.7 General Information Flow
Level of detail increases as information flows from top to bottom
Time horizons tend to decrease
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Capacity Management Techniques
CapacityRequirements
Planning (CRP)
Priority Management Techniques
ResourcePlanning
(RP)
Sales and OperationsPlanning
(SOP)
Rough-CutCapacity
Planning (RCCP)
MasterProductionSchedule
Material Requirements
Planning (MRP)
Production Activity Control
(PAC) Operation Sequencing
Input/Output Control
Planning and Control Hierarchy
At each level, there are three questions:
What are the priorities?
What capacity is available?
How can differencesbe resolved?
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A Typical Manufacturing Organization
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ENGINEERING
PRODUCTION
FINANCE
QUALITY
MARKETING
SALES
Traditional “Silo” Organizations
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Dominant flow of products and services
Dominant flow of demand and design information
Basic Supply Chain
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Physical Supply/Distribution
Movement of goods from suppliers to the beginning of the production process and from the end of the production process to consumersActivities
Transportation Distribution inventory Warehousing Packaging Materials handling Order entry
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Profit = Revenue – Expense
Company Objectives
Best customer service Lowest production costs Lowest inventory investment Lowest distribution costs
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Conflicts in Traditional Supply Systems
FinanceMarketing Operations
This implies
Inventory investment
Objective
Customer service
Production efficiency
Increase profit and cash flow, reduce investment
Increase revenue Reduce manufacturing cost
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Role of Materials Management
Demand Resources
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Why Plan?
To satisfy customer demand and ensure the availability of resources
Material Capacity
Demand Resources
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These are questions of priority and capacity.
A Good Planning and Control System