Section B

Production Planning and Control

  • Definition: Production Planning and Control (PPC) is a management process coordinating production activities for efficient and effective manufacturing.
  • Objective: Ensure timely, efficient, and cost-effective manufacturing processes.
  • Components:
    • Production planning
    • Scheduling
    • Execution
    • Control

Key Elements of Production Planning

  • Demand Forecasting: Predicting future product demand to plan production.
  • Capacity Planning: Ensuring the manufacturing facility can meet production goals.
  • Material Requirements Planning (MRP): Planning materials needed for production to avoid shortages or excess inventory.
  • Production Scheduling: Creating detailed schedules for manufacturing activities for timely completion.

Process Planning in Production Control

  • Definition: Determining specific processes and operations required to produce a product.
  • **Steps:
    • Operation Selection: Identifying the sequence of operations needed for manufacturing.
    • Resource Allocation: Assigning resources (labor, machines, materials) to each operation.
    • Process Optimization: Improving processes to enhance efficiency and reduce costs.
  • Tools and Techniques:
    • Gantt charts
    • Flowcharts
    • Process simulation

Benefits and Challenges of PPC

  • Benefits:
    • Improved efficiency and productivity
    • Reduced production costs and waste
    • Better inventory management
    • Enhanced customer satisfaction due to timely delivery
  • Challenges:
    • Dealing with demand fluctuations
    • Managing production bottlenecks
    • Ensuring coordination between different departments
    • Adapting to technological changes and innovations

Master Production Schedule (MPS)

  • Definition (APICS): States the requirements for individual end items by date and quantity.

Features of MPS

  • Linked to manufacturing, indicating where and how much of each product will be demanded.
  • Quantifies significant processes, parts, and other resources to:
    • Optimize production
    • Identify bottlenecks
    • Anticipate needs
    • Complete goods
  • Typically created by software with user adjustments.
  • Translates customer demand (sales orders) into a build plan using planned orders in a component building environment.

MPS Explained

  • Breaks down (disaggregates) the production plan into product families.
  • Promotes valid order promises.
  • Provides a communication medium between Marketing/Sales and Operations.
Disaggregation of Sales and Operations Plan
  • The production plan is broken into product families.
Marketing ←→ Operations Communication
  • Marketing communicates demand through customer orders and forecasts.
  • Operations communicates capacity through inventory levels and constraints.
Resource Availability Control
  • Production shortfalls will be known ahead of time, allowing for alternative plans.
Customer Service
  • Proactively control the ability to deliver goods to customers.
Inventory Control
  • Proactive approach to inventory control.
  • Items are scheduled to arrive when needed.
  • Safety stock has less importance.

How MPS Works

  • Information Needed for MPS Logic:
    • Lot Size
    • Lead Time
    • Product Demand
    • Starting Inventory
  • Inputs:
    • Can come from ERP, Sales
  • Outputs:
    • Amounts to be Produced
    • Staffing Levels
    • Quantity Available to Promise
    • Projected Available Balance
    • May be used to create a Material Requirement Planning Schedule

Example: MPS for Gearboxes for 2 Wheelers

WeekForecasted DemandStarting InventoryProduction QuantityEnding Inventory
Week 1500200400100
Week 2600100600100
Week 3700100700100
Week 4800100800100
Explanation of Example
  • Forecasted Demand: Estimated number of gearboxes required each week.
  • Starting Inventory: Number of gearboxes available at the beginning of each week.
  • Production Quantity: Number of gearboxes to be produced each week to meet demand and maintain buffer stock.
  • Ending Inventory: Number of gearboxes remaining at the end of each week.
  • Calculation:
    • EndingInventory=StartingInventory+ProductionQuantity−ForecastedDemandEnding Inventory = Starting Inventory + Production Quantity - Forecasted Demand
Calculation Example for Week 1
  • Forecasted Demand: 500 units
  • Starting Inventory: 200 units
  • Production Quantity: 400 units
  • EndingInventory:200+400−500=100unitsEnding Inventory: 200 + 400 - 500 = 100 units

Jet Spray Corp. Example

  • Markets dispensers for hot & cold beverages
  • Uses an integrated system that includes:
    • MRP
    • Capacity Planning
    • Shop floor control
    • MPS
    • Inventory Management

Summary

  • MPS breaks the Sales & Operations plan into product families
  • Maintains Desired Level of Customer Service
  • Allows proactive control of inventory.