Production planning

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  • 1. ProductionPlanning
    Introduction
    Activities
    Process
    Outcome
  • 2. Start of Production Planning
    Forecasting Decision: Based on Sales Estimates.
    Management Decision : Based on Demand Estimates, product design, etc.
    Engineering Decision : Based on manufacturing design, process design, materials required, etc.
    Capacity Decision : Based on existing resources of plant, machinery, tools, Planning the facility, etc.
    Financial Decision : Based on funds, profitability.
    Resource availability :Employee workflow, availability of skilled labour, etc.
  • 3. Activities of Production Planning
    Sales Order or Stock to order
    Planning, Routing, Scheduling, Dispatching
    Men
    Materials
    Machines
  • 4. Objectives
    Maximise utilisation of materials and human resources
    Minimise costs
    Timely supply of finished goods
    Effective control of production process
  • 5. Process of Production Planning
    Materials Planning
    Operations Planning
    Cost Planning
  • 6. Master
    Production
    Schedule
    Bill of
    Inventory
    Materials
    Status
    Material
    Requirements
    Planning System
    Purchasing
    Item Master
    Data
    Planned Order
    & Other
    Reports
    Materials Planning
  • 7. Bill of Materials
    Bill of Materials – Parent-child diagram that shows what goes into what.
    Bike
    Wheel Assy
    Frame
    Assy
    Wheel
    Tires
    Frame
    Components
    Hubs & Rims
    Spokes
  • 8. BOM (contd.)
    • Used to make sure enough parts are available throughout production plan.
    • 9. Each part has Lead Time and ordering process.
    • 10. One BOM for every end product to arrive at cost per product.
    • 11. Types of BOM
    Single Level BOM – One level down
    Indented BOM – More than one level
  • 12. Inventory Classifications
    Inventory
    Process stage
    Demand Type
    Number & Value
    Other
    Maintenance Dependent Operating
    Raw Material WIP Finished Goods
    Independent Dependent
    A Items B Items C Items
  • 13. Output of Materials Planning
    Planned Production report
    Planned Purchases report
    Master Schedule report
    Sales Forecasts Listing
    Materials Handling report
  • 14. Operations Planning
    Forecast
    Medium term
    Long term
    Short term
    Lead Time
    Product : What
    Master Production Schedule
    Time: When
    Production Plan
    Quantity: How Much
    Sales Order
    Capacity Constraints
  • 15. How it is done
    Cost
    Time
    Labour
    Engineering Diagram
    Operations Planning
    Standard Process Sheet
    PERT CPM
    Route Sheet
  • 16. Output of Operations Planning
    Least inventory holding.
    Lead time report.
    Capacity utilisation report.
    Effectively Plan purchases, manufacturing and delivery.
    Know the optimum manufacturing process.
  • 17. Cost PlanningCost
    OTHER EXPENSES
    MATERIALS
    LABOUR
    INDIRECT
    DIRECT
    DIRECT INDIRECT
    Direct
    Di
    INDIRECT
    DIRECT
    OVERHEADS
    DOH
    SOH
    FOH
    AOH
  • 18. Examples of Indirect material
    At factory level – lubricants, oil, consumables, etc.
    At office level – Printing & stationery, Brooms, Dusters, etc.
    At selling & distribution level – Packing materials, printing & stationery, etc.
  • 19. Examples of Indirect labour
    At factory level – foremen’s salary, works manager’s salary, gate keeper’s salary,etc.
    At office level – Accountant’s salary, GM’s salary, Manager’s salary, etc.
    At selling and distribution level – salesmen salaries, Logistics manager salary, etc.
  • 20. Examples of other expenses
    At factory level – factory rent, factory insurance, lighting, etc.
    At office level – office rent, office insurance, office lighting, etc.
    At sales & distribution level – advertising, show room expenses like rent, insurance, etc.
  • 21. Output of Cost Planning
    Know the value addition at each stage of production.
    Break up of material, production and overhead costs. Know the direct / indirect costs.
    Know the cheapest production line.
    Analyse the profitability of make / buy decision.
    Know the reason for rise in costs.
  • 22. Outcome of Production Planning
    Production Data
    Inspection Data
    Pay roll Data
    Cost Data
  • 23. ERP in Production Planning
    Master Production
    Schedule
    BOM
    (Bill-of-Material)
    MRP by period report
    Lead Times
    MRP by date report
    (ItemMaster File)
    MRP
    Programs
    Planned orders report
    Inventory Data
    Purchase requirements
    Purchasing data
    Cost reports
    Cost Data