Production Planning Control, Demand Forecasting, Aggregate Production Planning, Strategies of Aggregate Planning . Scheduling Workforce Planning Materials Requirement Planning Capacity Planning Production Control using JIT Shop-Floor Control

2.  The need for Production Planning
 Demand Forecasting
 Aggregate Production Planning
 Strategies of Aggregate Planning
 Scheduling
 Workforce Planning
 Materials Requirement Planning
 Capacity Planning
 Production Control using JIT
 Shop-Floor Control
Apr-15
2

3. Addresses decisions on
Acquisition
Utilization
Allocation
of limited production resources
Resources include the production facilities, labor
and materials.
Constraints include the availability of resources,
delivery times for the products and management
policies.
Apr-15
3

4. Main objective is to take appropriate decisions.
Typical decisions
Work force level
Production lot sizes
Assignment of overtime
Sequencing of production runs
Apr-15
4

5. Process
Planning
Scheduling
Loading
Combining
Functions
Dispatching
Follow – up
Corrective
Action
Re-planning
Functions of
PPC
Apr-15
5

6. Objective
To predict demand for planning purposes
Laws of Forecasting
 Forecasts are always wrong
 Forecasts always change
 The further into the future, the less reliable the
forecast will be
Apr-15
6

7. Qualitative Demand Forecasting
Prediction Market
Delphi Technique
Game Theory
Intentions and Expectations Surveys
Conjoint Analysis
Apr-15
7

8. Quantitative Demand Forecasting
Discrete Event Simulation
Quantitative Analogies
Neural Networks
Data Mining
Causal Models
Segmentation
Apr-15
8

9. 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 faster
rate than the resources. Aggregate planning offers
strategies to absorb these fluctuations.
Apr-15
9

10. 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
Apr-15
10

11. 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.
Contd…
Apr-15
11

12. 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
Apr-15
12

13. Apr-15
13
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

14. Level plans
Use a constant workforce & produce similar
quantities each time period
Use inventories and backorders to absorb
demand peaks & valleys
Chase plans
Minimize finished good inventories by trying to keep
pace with demand fluctuations
Apr-15
14

15. Production
Demand
Apr-1515
Units
Time
Level plans

16. Units
Time
Series1
Apr-15
16
Production
Demand
Chase plans
Series1

17. 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
Apr-15
17

18. Concerned with timetable of production
Scheduling arranges the different manufacturing
operations in order of priority, fixing the time & date
for the commencement & completion of each
operation.
Types of scheduling
Forward scheduling
Backward scheduling
Apr-15
18

19. The pattern of scheduling differs from one job to
another which is explained as below.
Master Schedule
Production Schedule
Manufacturing Schedule
Scheduling of Job Order Manufacturing
Apr-15
19

20. To find out and direct
Right people
Right place
Right time
Right price
Apr-15
20

21. Issues
Basic Staffing Calculations and labor hours
Working Environment
Flexibility/Agility
Quality
Apr-15
21

22. MRP is a production planning and inventory control
system 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
Apr-15
22

23. 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 item
The basic idea is to get the right materials to the right
place at the right time.
Apr-15
23

24. Apr-15
24

25. Apr-15
25

26. 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
Apr-15
26

27. Wrong Capacity
Apr-15
27

28. Classes of capacity planning
Lead strategy
Lag strategy
Match strategy
Apr-15
28

29. Issues
Stand-alone capacities and congestion effects
Capacity Strategy
Make-or-Buy
Flexibility
Scalability and learning curves
Apr-15
29

30. JIT is the technique for reducing inventories and
elimination of waste in the production system.
Objectives
To eliminate waste
To improve quality
To minimize lead time
To reduce costs
To improve productivity
Apr-15
30

31. Pull production and kanban
JIT is associated with pull systems.
Toyota was the first developer of kanban system.
Examples
McDonalds'
Office Xerox Paper
Apr-15
31

32. Issues
JIT Interdependencies
Implementing Issues
JIT purchasing
Expected Outcomes
Apr-15
32

33. Objective
To control flow of work through plant and coordinate
with other activities (e.g., quality control, preventive
maintenance, etc.)
Apr-15
33

34. Apr-15
34

35. 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… Apr-15
35

36. 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
Apr-15
36

37. 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… Apr-15
37

38. Issues
Simplicity
Departures from simple mechanisms must be
carefully justified.
Apr-15
38

39. THANK YOU