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Ppc & aggregate planning



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  • 5 5
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  • 1. UNIT III
    • Production Planning & Control (PPC)
    • Aggregate Planning
  • 2. Overview
    • Production-Planning Hierarchy
    • Aggregate Planning
    • Master Production Scheduling
    • Types of Production-Planning and Control Systems
    • Wrap-Up: What World-Class Producers Do
  • 3. Production Planning and Control Introduction
    • Coordination of materials with suppliers
    • Efficient utilization of people and machines
    • Efficient flow of materials
    • Communication with customers
    • Aspects of Production Planning & Control:
    • * Design determines physical form & structure of operations
    • process.
    • * Aim of planning and control – to meet customer’s needs and
    • expectations on continuous basis
    • * Ensures that operational objectives of quality, cost, lead time,
    • adaptability, variability & services are met.
    • * Demand is reconciled with supply, in terms of:
    • - Volume
    • - Quality
    • - Timing
  • 5. Demand vs. Supply
    • 3 Factors To Consider When Reconciling Demand And Supply:
    • * Loading of work center – available capacity of the one coffee
    • machine.
    • * Sequence of work;
    • - First come first serve
    • - Earliest due date
    • - Shortest processing time
    • - Other more completed sequencing rules are not covered here
    • * Scheduling of tasks – specifies start and completion times for
    • various tasks
    • - Gantt charts are often used
  • 6. Capacity Planning, Aggregate Planning, Master Schedule, and Short-Term Scheduling Capacity Planning 1. Facility Size 2. Equipment Procurement Aggregate Planning 1. Facility Utilization 2. Personnel needs 3. Subcontracting Master Schedule 1. MRP 2. Disaggregation of master plan Short-term Scheduling 1. Work center loading 2. Job sequencing Long-term Intermediate-term Intermediate-term Short-term
  • 7. Production Planning Horizons Master Production Scheduling Production Planning and Control Systems Pond Draining Systems Aggregate Planning Push Systems Pull Systems Focusing on Bottlenecks Long-Range Capacity Planning Long-Range (years) Medium-Range (6-18 months) Short-Range (weeks) Very-Short-Range (hours - days)
  • 8. Production Planning: Units of Measure Master Production Scheduling Production Planning and Control Systems Pond Draining Systems Aggregate Planning Push Systems Pull Systems Focusing on Bottlenecks Long-Range Capacity Planning Entire Product Line Product Family Specific Product Model Labor, Materials, Machines
  • 9. Hierarchical Production Planning 5 Annual demand by item and by region Monthly demand for 15 months by product type Monthly demand for 5 months by item Forecasts needed Allocates production among plants Determines seasonal plan by product type Determines monthly item production schedules Decision Process Decision Level Corporate Plant manager Shop superintendent
  • 10. Matching PPC with the Needs of the Firm
    • Number of
    • Subparts
    • Seconds Minutes Days Weeks Months Time between successive units
    • Examples: Oil, food, drugs, watches, TV, trucks, planes, houses, ships
    Repetitive Flow Just-in-Time MRP CPM/PERT
  • 11. Matching PPC with the Needs of the Firm
    • Flow-Oriented Manufacturing Systems
    • Very short time between successive units
    • A few components needed
    • Flow rate is the measure
    • Ex: Chemical, food, petroleum
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. Matching PPC with the Needs of the Firm (Cont’d)
    • 5. CPM/PERT
    • Long leadtimes
    • Low production quantity
    • Ex: Airplanes, ships
  • 16. Aggregate Planning
  • 17. Why Aggregate Planning Is Necessary
    • Fully load facilities and minimize overloading and underloading
    • Make sure enough capacity available to satisfy expected demand
    • Plan for the orderly and systematic change of production capacity to meet the peaks and valleys of expected customer demand
    • Get the most output for the amount of resources available
  • 18. Aggregate Planning
    • Goal: Specify the optimal combination of
      • production rate
      • workforce level
      • inventory on hand
    • Product group or broad category (Aggregation)
    • Medium-Range: 6-18 months
  • 19. Aggregate Plans for Services
    • For standardized services, aggregate planning may be simpler than in systems that produce products
    • For customized services,
      • there may be difficulty in specifying the nature and extent of services to be performed for each customer
      • customer may be an integral part of the production system
    • Absence of finished-goods inventories as a buffer between system capacity and customer demand
  • 20. Preemptive Tactics
    • There may be ways to manage the extremes of demand:
      • Discount prices during the valleys.... have a sale
      • Peak-load pricing during the highs .... electric utilities
  • 21. Master Production Scheduling (MPS)
  • 22. Objectives of MPS
    • Determine the quantity and timing of completion of end items over a short-range planning horizon.
    • Schedule end items (finished goods and parts shipped as end items) to be completed promptly and when promised to the customer.
    • Avoid overloading or underloading the production facility so that production capacity is efficiently utilized and low production costs result.
  • 23. Time Fences
    • The rules for scheduling
    No Change +/- 5% Change +/- 10% Change +/- 20% Change Frozen Firm Full Open 1-2 weeks 2-4 weeks 4-6 weeks 6+ weeks
  • 24. Time Fences
    • The rules for scheduling:
      • Do not change orders in the frozen zone
      • Do not exceed the agreed upon percentage changes when modifying orders in the other zones
      • Try to level load as much as possible
      • Do not exceed the capacity of the system when promising orders.
      • If an order must be pulled in to level load, pull it into the earliest possible week without missing the promise.
  • 25. Developing an MPS
    • Using input information
      • Customer orders (end items quantity, due dates)
      • Forecasts (end items quantity, due dates)
      • Inventory status (balances, planned receipts)
      • Production capacity (output rates, planned downtime)
    • Schedulers place orders in the earliest available open slot of the MPS
    • . . . more
  • 26. Developing an MPS
    • Schedulers must:
      • estimate the total demand for products from all sources
      • assign orders to production slots
      • make delivery promises to customers, and
      • make the detailed calculations for the MPS
    • As orders are slotted in the MPS, the effects on the production work centers are checked
      • Rough cut planning - identify underloading or overloading of capacity
  • 27. Types of Production-Planning and Control Systems
  • 28. Types of Production-Planning and Control Systems
    • Pond-Draining Systems
    • Push Systems
    • Pull Systems
    • Focusing on Bottlenecks
  • 29. Pond-Draining Systems
    • Emphasis on holding inventories (reservoirs) of materials to support production
    • Little information passes through the system
    • As the level of inventory is drawn down, orders are placed with the supplying operation to replenish inventory
    • May lead to excessive inventories and is rather inflexible in its ability to respond to customer needs
  • 30. Push Systems
    • Use information about customers, suppliers, and production to manage material flows
    • Flows of materials are planned and controlled by a series of production schedules that state when batches of each particular item should come out of each stage of production
    • Can result in great reductions of raw-materials inventories and in greater worker and process utilization than pond-draining systems
  • 31. Pull Systems
    • Look only at the next stage of production and determine what is needed there, and produce only that
    • Raw materials and parts are pulled from the back of the system toward the front where they become finished goods
    • Raw-material and in-process inventories approach zero
    • Successful implementation requires much preparation
  • 32. Focusing on Bottlenecks
    • Bottleneck Operations
      • Impede production because they have less capacity than upstream or downstream stages
      • Work arrives faster than it can be completed
      • Binding capacity constraints that control the capacity of the system
    • Optimized Production Technology (OPT)
    • Synchronous Manufacturing
  • 33. Synchronous Manufacturing
    • Operations performance measured by
      • throughput (the rate cash is generated by sales)
      • inventory (money invested in inventory), and
      • operating expenses (money spent in converting inventory into throughput)
  • 34. Wrap-Up: World-Class Practice
    • Push systems dominate and can be applied to almost any type of production
    • Pull systems are growing in use. Most often applied in repetitive manufacturing
    • Few companies focusing on bottlenecks to plan and control production.