Production Planning and Control
Introduction
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Coordination of materials with suppliers
Efficient utilization of people and machines
Efficient flow of materials
Communication with customers
PPC Class Notes-
Production Planning and Control
Introduction
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PPC Class Notes-
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Decision Making vs. Decision
Support
• Authors claim that PPC system does not
make decisions or manage the operations
• Managers perform these activities
• PPC system provides support for decision
making
PPC Class Notes-
Decision Making vs. Decision
Support (Cont’d)
• However, developing intelligent software is
becoming increasingly feasible
• Software not only to support decision makers
but also make (at least) some of the decisions
• Expert Systems, Neural Networks, Genetic
Algorithms, Evolutionary Programming,
Genetic Programming, Tabu Search, Simulated
Annealing, etc. are available techniques
PPC Class Notes-
Activities Supported by PPC
• Materials Planning
• Purchasing
• Raw Material Inventory Control
• Capacity Planning
• Scheduling Machine and People
• WIP Inventory Control
PPC Class Notes-
Activities Supported by PPC
(Cont’d)
• Coordinate Customer Orders
• Finished Goods Inventory Control
PPC Class Notes-
Costs and Benefits of PPC Systems
PPC requires a large # of indirect people
Companies with ineffective PPC system will
have poor customer service, excessive
inventories, low equipment and people
utilization, high rate of part obsolescence,
large number of expediters
PPC Class Notes-
Company Game Plan
Overall direction for PPC is provided by a
Company Game Plan
Game Plan links various departments
(engineering, finance, marketing,
production)
It should be consistent with strategic plans,
budgets, and company’s capabilities
PPC Class Notes-
Hierarchical Planning
1. Overall Manufacturing Planning
2. Detailed Materials and Capacity Planning
3. Execution of Plans
PPC Class Notes-
Production Planning and Control
General Framework
Resources
Planning
Production
Planning
Demand
Management
Rough-cut
Capacity
Planning
Master Production
Scheduling
Detailed
Capacity
Planning
Detailed Material
Planning
Material and
Capacity Plans
Shop Floor
Systems
Purchasing
PPC Class Notes-
1.Overall Manufacturing Planning
Hierarchical Planning Cont’d
Demand Management
• Forecasting
• Order Promising
• Order Processing
• Order Entry
• Spare Parts
PPC Class Notes-
1.Overall Manufacturing Planning
Hierarchical Planning Cont’d
Production Planning
Monthly Plans for Product Families
Master Production Scheduling (MPS)
Weekly Plans for Individual Products
MPS must sum up to Production Plan
PPC Class Notes-
PP – MPS Relation
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PPC Class Notes-
Example
Product Family: Markers
Products: Red, Blue, Green Marker
Note:Usually a period is one month and a
subperiod is one week (s=4).
PPC Class Notes-
Example (Cont’d)
ProductionPlan
M
onths
1
2
M
arker Family 100000 120000
M
aster ProductionSchedule
Products
W
eeks
1 2 3 4 1 2 3
Red 10 10 10 10 15 15 15
Blue 10 10 10 10 10 10 10
Green 5 5 5 5 5 5 5
PPC Class Notes-
4
15
10
5
1.Overall Manufacturing Planning
Hierarchical Planning Cont’d
Resource Planning
• Long-Range Capacity Requirements
• Number of Machines
• Number of Employees
• Overtime
• Shifts
• Plants
PPC Class Notes-
1.Overall Manufacturing Planning
Hierarchical Planning Cont’d
Rough-Cut Capacity Planning
Capacity Requirements for Master Production
Scheduling
• Overall Factor
• Capacity Bills
• Resource Profiles
PPC Class Notes-
2.Materials & Capacity Planning
Hierarchical Planning Cont’d
Materials Planning
Production rates can be used in simpler
manufacturing systems.
Materials Requirements Planning (MRP) can be
used in more complex systems. MRP determines
time-phased requirements (period-by-period) for
all purchased and manufactured parts such as raw
materials, components, parts, subassemblies, etc.
PPC Class Notes-
2.Materials & Capacity Planning
Hierarchical Planning Cont’d
Detailed Capacity Planning
Labor Hours Required
Machine Capacity Required
In an MRP environment, this task is
accomplished by using the Capacity
Requirements Planning (CRP) technique.
PPC Class Notes-
3. Execution of Plans
Hierarchical Planning Cont’d
Shop Floor Control
• Conventional Approach, Process Layout
Similar machines are grouped into workcenters
Use workorders to schedule the jobs through
workcenters / departments
Schedule machine and other workcenters
Determine start and completion times of orders
Update the schedule
PPC Class Notes-
3. Execution of Plans
Hierarchical Planning Cont’d
Shop Floor Control (Cont’d)
• Recent Trend, Manufacturing Cells
Similar parts are grouped into families
Corresponding machine cells are formed
Use production rates
Use schedules to control production (Family
Sequencing, Product Sequencing, Cell Loading,
Cell Scheduling, etc.)
Use Kanban System (Pull, Just-in-Time) to control
production
PPC Class Notes-
3. Execution of Plans
Hierarchical Planning Cont’d
Purchasing
•
Purchasing Plan
•
Vendor Search
•
Quotation
•
Order Release
•
Order Follow-up
•
Vendor Capacity
PPC Class Notes-
Planning vs. Control
• Plans are made
• Results are compared with plans (control)
• Results are OK  Wait until next control
period
• Results are not OK  Go to Step 1 (Revise
plans)
PPC Class Notes-
An Example
Resource Planning:
Assume that a jewelry manufacturing company
decided to open three manufacturing sites (US,
Ireland and Singapore).
Each plant is going to run one shift except plating
area which will be run 2 shifts due to high
investment requirement.
PPC Class Notes-
Example Cont’d
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PPC Class Notes-
Example Cont’d
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PPC Class Notes-
Example Cont’d
DemandManagement:
Followingmanpower andresources requirements areestimatedfor
eachplant:
Manpower
Machine
TypeX
Machine
TypeY
Machine
TypeZ
USplant
Irelandplant
300
200
Singapore
plant
150
50
40
30
100
120
50
150
40
70
PPC Class Notes-
Example Cont’d
Master ProductionSchedule:
USPlant –EarringFamily –1ST Month
1
GoldEarring
GoldEarringwithred
stone
Silver Earring
Silver Earringwithred
stone
TOTAL
Weeks
2 3 4
1K 1K 1K 2K
1K 1K 2K 1K
1K 2K 1K 1K
2K 1K 1K 1K
5K 5K 5K 5K
MASTERSCHEDULEISPREPAREDFOREACHMONTH
(POSSIBLYFORTHE1ST COUPLEOFMONTHS, NOTFOR
THEENTIREYEAR) ANDPRODUCTFAMILY.
PPC Class Notes-
Example Cont’d
Rough-cutC
apacityPlanning:
M
anpow
erandm
achinerequirem
entsarerevised.
M
anpow
er
M
achine
TypeX
M
achine
TypeY
M
achine
TypeZ
U
Splant
330
55
95
190
PPC Class Notes-
Example Cont’d
M
aterialsPlanning:
D
etailedm
aterial plansarepreparedforsubassem
bliesand
partstobem
anufactured; com
ponentsandrawm
aterialsto
bepurchased.
1 2 3
G
old
Silver
Red
Stone
Plated
parts
4
W
eeks
5 6 7 8 9 10 11 12
3kg 3kg 2.5kg 2.5kg …
5kg 5kg 4kg 4kg …
3K 2K 3K 2K …
5K 5K 5K
5K
…
PPC Class Notes-
Example Cont’d
C
apacityR
equirem
entsP
lanning
:
W
eeks
1 2 3
4
M
anpow
er 320 310 330 322
M
achine 52 55 60 57
X
M
achine 90 92 98 95
Y
M
achine 178 163 172 170
Z
5 6 7 8 9 10 11 12
…
…
…
…
PPC Class Notes-
Example Cont’d
Purchasing:
Contact vendors, evaluatequotesandcut purchaseorders.
ShopFloorControl:
Assignpartstobeplatedtodifferent platinglines
Loadmanufacturingcellswithproductsanddeterminestart
andcompletiontimes
Cell1 Job1 Job3
Job7
Cell2 Job2
Job4
Cell3 Job5
Job8
Job6
0
5hr 7 10
22 25
3438
PPC Class Notes-
Planning vs. Control
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PPC Class Notes-
Matching PPC with the Needs of the Firm
Number of
Subparts
Just-in-Time
MRP
CPM/PERT
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Months
Time between successive units
Examples: Oil, food, drugs, watches, TV, trucks, planes, houses, ships
PPC Class Notes-
Matching PPC with the Needs of the Firm
1. Flow-Oriented Manufacturing Systems
Very short time between successive units
A few components needed
Flow rate is the measure
Ex: Chemical, food, petroleum
PPC Class Notes-
Matching PPC with the Needs of the Firm
(Cont’d)
2. Repetitive-Nature Manufacturing Systems
Short time between successive units
Assemble similar products
Flow Rate or Assembly Rate is the measure
Ex: Televisions, Radios, Watches, Cars
PPC Class Notes-
Matching PPC with the Needs of the Firm
(Cont’d)
3. Just-in-Time
High production volume
Low Product Variety
Reduced Inventory and Leadtime
Ex: Cars, Computers, Jewelry, Copy
Machines
PPC Class Notes-
Matching PPC with the Needs of the Firm
(Cont’d)
4. Materials Requirements Planning (MRP)
Batch production
High product variety
Low production quantity
Ex: Electric Motors, Fans
PPC Class Notes-
Matching PPC with the Needs of the Firm
(Cont’d)
5. CPM/PERT
Long leadtimes
Low production quantity
Ex: Airplanes, ships
PPC Class Notes-
Forces for Change
Typical Responses
Marketplace dictates
Technology
Products
Processes
Systems
Techniques
Shorter Product Life Cycles
Time Based Competition
Quality Requirements
Company strategy
Manufacturing Strategy
Flexibility/Responsiveness
Reduced Overhead costs
Simplification
Automation
Production Cells
Manufacturing
processes
MPC system
PPC Class Notes-
MRP
JIT