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  1. 1. Group
  3. 3.  The need for Production Planning Demand Forecasting Aggregate Production Planning Strategies of Aggregate Planning Workforce Planning Materials Requirement Planning Capacity Planning Production Control using JIT Shop-Floor Control 3
  4. 4. Addresses decisions onAcquisitionUtilizationAllocation of limited production resourcesResources include the production facilities, laborand materials.Constraints include the availability of resources,delivery times for the products and managementpolicies. 4
  5. 5. Main objective is to take appropriate decisions.Typical decisionsWork force levelProduction lot sizesAssignment of overtimeSequencing of production runs 5
  6. 6. Process Planning Re-planning SchedulingCorrective Functions of Loading Action PPC Combining Follow – up Functions Dispatching 6
  7. 7. ObjectiveTo predict demand for planning purposesQualitative Demand ForecastingPrediction MarketDelphi Technique 7
  8. 8. ObjectiveTo generate a medium-term production planTo establish rough product mixTo anticipates bottlenecksTo align capacity and workforce plans.It is usually done for next 2 to12 months.Demand changes over a period of time at a fasterrate than the resources. Aggregate planning offersstrategies to absorb these fluctuations. 8
  9. 9. Guidelines for Aggregate PlanningDetermine demand for each periodConsider company policies that may have impactDetermine capacities for each period Regular time, overtime, subcontracting, etc.Identify backorder or inventory amountDetermine costs of operationContinue through time horizon to calculate total costDevelop alternate plans and compute cost for eachSelect the plan that meets objectives Feb-12 9
  10. 10. 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. Feb-12 Contd… 10
  11. 11. 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 involvedCost 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 11
  12. 12. Output of Aggregate PlanningProduction quantity from regular time, overtime and subcontracted timeInventory held for determination of how much warehouse space and working capital is neededBacklog or stock-out quantity for determining the customer service levels 12
  13. 13. Level plansUse a constant workforce & produce similar quantities each time periodUse inventories and backorders to absorb demand peaks & valleysChase plansMinimize finished good inventories by trying to keeppace with demand fluctuations 13
  14. 14. Level plans Production DemandUnits Time 14
  15. 15. Chase plans Production Demand Series1 Series1Units Time 15
  16. 16. Hybrid or Mixed StrategiesBuild-up inventory ahead of rising demand and use backorders to level extreme peaksLayoff or furlough workers during lullsSubcontract production or hire temporary workers to cover short-term peaksReassign workers to preventive maintenance during lullsInfluencing Demand 16
  17. 17. To find out and directRight peopleRight placeRight timeRight price 17
  18. 18. IssuesBasic Staffing Calculations and labor hoursWorking EnvironmentFlexibility/AgilityQuality 18
  19. 19. MRP is a production planning and inventory controlsystem 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 customersMaintain the lowest possible level of inventoryPlan manufacturing activities, delivery schedules and purchasing activities 19
  20. 20. MRP stepsTakes output from the planning phase (master plan)Combines that with the information from the inventory record and product structure recordsDetermines a schedule of timing and quantities for each itemThe basic idea is to get the right materials to the rightplace at the right time. 20
  21. 21. 21
  22. 22. 22
  23. 23. 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 23
  24. 24. Wrong CapacityFeb-12 24
  25. 25. Classes of capacity planningLead strategyLag strategyMatch strategy 25
  26. 26. IssuesStand-alone capacities and congestion effectsCapacity StrategyMake-or-BuyFlexibilityScalability and learning curves 26
  27. 27. JIT is the technique for reducing inventories andelimination of waste in the production system.ObjectivesTo eliminate wasteTo improve qualityTo minimize lead timeTo reduce costsTo improve productivity 27
  28. 28. Pull production and kanbanJIT is associated with pull systems.Toyota was the first developer of kanban system.ExamplesMcDonaldsOffice Xerox Paper 28
  29. 29. IssuesJIT InterdependenciesImplementing IssuesJIT purchasingExpected Outcomes 29
  30. 30. ObjectiveTo control flow of work through plant and coordinatewith other activities (e.g., quality control, preventivemaintenance, etc.) 30
  31. 31. Material Flow Control 31
  32. 32. FunctionsGross Capacity Control Match line to demand by staffing (workers/shifts) Varying length of work week (or work day) Using outside vendors to augment capacity Contd… 32
  33. 33. FunctionsBottleneck Planning Handling of bottlenecks Cost of capacity is the key Stable bottlenecks are easier to manageSpan of Control Physically or logically decompose system Span of labor and process management 33
  34. 34. IssuesCustomization SFC is often the most highly customized activity in a plant.Information Collection SFC represents the interface with the actual production processes and is therefore a good place to collect data. Contd… 34
  35. 35. IssuesSimplicity Departures from simple mechanisms must be carefully justified. 35
  36. 36. THANK YOU