Production Planning and Control – Comprehensive Notes

Perform Production Planning

• Perform Production Scheduling

  • Refer to Section 2.2 and 3.2

• Prepare Bill of Material (BOM)

  • Refer to Section 5.2

• Carry-out Material Requirement Planning (MRP)

  • Refer to Sections 5.1 – 5.3

Production Planning & Control (PPC) Process

• Objectives (produce right quantity/quality at right time, cheapest method)

  • Offer reliable delivery dates

  • Complete orders on time

  • Maximise plant & manpower utilisation

  • Minimise stock / WIP

  • Provide data for company planning

• Production Planning – decides facilities, location & best usage for manufacturing

• Production Control – executes the plan, monitors performance, reports variance

Common PPC Terms

• Sales Forecast – future sales prediction (past sales + surveys, trends, spending)

• Master Production Schedule (MPS)

  • When & how much of each product is required

  • Quantifies resources, identifies bottlenecks, drives factory activity

• Material Requirement Planning (MRP) – time-phased calculation of material needs via BOM + inventory + MPS

• Shop Floor Control – prioritise, track, report production orders; update labour/machine hrs

• Purchasing – acquisition of raw/semi-finished materials for production

• Inventory Control – supervise supply, storage, accessibility of all inventories

• Capacity Requirement Planning (CRP) – determine manpower/machine/facility capacity to meet demand

• Costing – allocate expenditure to stages to ascertain total cost

• Bill of Material (BOM)

  • List of parts & qty needed, usually w/ Manufacturer Part Number (MPN)

PPC Operating Steps

• Planning – select materials, methods, machines, manpower

• Scheduling – decide when each operation starts/ends to hit due date

• Loading – apportion work to facilities; balance required vs available capacity

• Dispatching – issue works orders, route cards, job sheets, material requisitions, organise tooling; initiates production

• Progressing – monitor each order vs schedule; report variance for action

Planning of Resources & Scheduling

Resource Planning

• Manpower

  • Direct labour (operators, prod technicians)

  • Indirect labour (facility tech, supervisor, engineer, manager)

• Facilities

  • Production equipment (machines, tools, jigs)

  • Utilities equipment (compressor, boiler, cooling tower)

  • Plant (building)

• Inventory

  • Raw materials, semi-finished goods, finished goods

• Time – hrs/days of operation planned per standard times & productivity

• Finance – wages, material cost, machinery purchases

Production Scheduling & Loading

• Scheduling definition – establish start/end times

• Objective – plan sequence to complete all products by due date

• Types

  • Master schedule – customer delivery promises

  • Detailed schedules – coordinate semi-finished parts between operations

• Reasons for scheduling

  • Clarify start/end dates, minimise stock & cash outflow, maximise utilisation, satisfy customers, raise morale

• Preparation inputs (forecast, commitments, resources, efficiency, absenteeism, holidays, maintenance, delivery dates, confined space, work content, methods/routes, scrap allowance, labour/machine availability)

• Loading – assign work to machine/operator

  • Objectives: reduce waiting & idle time, inform delivery estimates, balance capacity & workload

• Capacity – output per period

  • \text{If load}=\text{capacity}\Rightarrow\text{fully loaded}

  • Overload vs under-load definitions

Gantt / Machine Loading Chart

• Horizontal bars = activities; length ∝ duration; left→right time flow

• Advantages: visibility of activities & added load impact

• Disadvantages: dependencies hard to see, complex detail problematic, minor data change causes major chart change

Sequencing

• Sets job priorities at workstation; complexity grows with jobs n & machines m$</p></li><li><p>Permutations:$n! possible sequences (e.g. 3 jobs ⇒ 6 sequences; 10 jobs ⇒ 3,628,800)

• Johnson’s Rule (2-machine case)

  1. Find smallest processing time

  2. If on Machine A ⇒ earliest slot; if on B ⇒ latest slot

  3. Ties: choose any

  4. Strike scheduled job, repeat until done

• Requirements: only 2 machines, all jobs pass A→B, no B work before A part, processing times known

• Example 1 (times in min)

  • Jobs 1-6: A [0.4 1.4 0.3 1.2 1.1 0.9], B [1.1 0.7 1.01 0.8 1.01 1.3]

  • Optimal sequence: 3-1-6-5-4-2

• Example 2 sequence: 5-1-2-4-3 (additional loading diagram & idle time calculated in text)

Inventory Control & Economic Order Quantity (EOQ)

Inventory Control Basics

• Maintains stock at pre-determined desirable levels

• Stock classes: raw material, WIP, supplies, finished goods

• Purposes

  • Raw material – buffer delivery disruption, volume discounts

  • WIP – avoid stoppage, level production during demand swings

  • Finished goods – buffer market fluctuation, quick service, compensate production issues

Stock Control Systems

• Maximum-Minimum (Two-Bin) – fixed order quantity Q$, variable order interval; reorder when first bin empty</p></li><li><p>Fixed Order Cycle – fixed interval$T$, variable quantity to raise level to$Q_1 each cycle; good admin coordination

Inventory Costs

• Deterioration, Obsolescence, Storage & Insurance, Lost return on capital

Deterministic EOQ Model Assumptions

1. Constant known demand D

2. Supply arrives instantaneously

3. No stock-out allowed

4. Zero lead-time in model

5. All costs constant & known

6. Orders independent

Total Annual Cost

TC = \frac{D S}{Q} + \frac{Q I C}{2}$</p><ul><li><p>$S$= order/setup cost per order</p></li><li><p>$I$= carrying-cost rate</p></li><li><p>$C$= unit cost</p></li><li><p>$Q$= order quantity</p></li></ul><h5 id="24ae0d01-def3-4c2c-95ac-d8a438b1f48b" data-toc-id="24ae0d01-def3-4c2c-95ac-d8a438b1f48b" collapsed="false" seolevelmigrated="true">Optimum (EOQ)</h5><p>$Q^* = \sqrt{\frac{2 D S}{I C}}$<br>Number of orders per year$= \frac{D}{Q^*}$</p><h5 id="96d0b9da-e9d6-49ae-98c4-7308d015d206" data-toc-id="96d0b9da-e9d6-49ae-98c4-7308d015d206" collapsed="false" seolevelmigrated="true">Sample Tutorials (answers provided)</h5><ol><li><p>Resistors:$EOQ=60$units,$TC=\$120$</p></li><li><p>Rivets:$Q^*=1000\ \text{kg}$,$TC=\$200$</p></li><li><p>Retailer:$EOQ=2000\ \text{units}$,$TC=\$800$</p></li><li><p>Given$C=3\$,$$I=25\%,$$S=6\$, $D=6000$ ⇒ compute EOQ & TC (exercise)

Material, Manufacturing & Enterprise Resource Planning

MRP System

• Calculates component needs & order dates (time-phased)

• Inputs: BOM, Inventory records, MPS

• Objectives

  • Minimise inventory

  • Maximise production efficiency

  • Improve customer service

• Benefits: lower inventory, set-up cost, better utilisation, faster response, re-plan ability

MRP Record Fields

• Period (time bucket), Planning horizon

• Gross Requirements (GR)

• Scheduled Receipts (SR)

• Projected Available Balance (PAB)

  • $PAB<em>t = PAB</em>{t-1}+SR<em>t+Planned\ Receipts</em>t-GR_t$

• Net Requirements $=\max(0,GR-PAB-Safety\ Stock-SR)$

• Planned Order Receipt (PORc)

• Planned Order Release (PORl) = PORc shifted back by lead-time

• Lot sizing: Fixed Order Qty, Lot-for-Lot (LFL)

• Offsetting – back-scheduling PORl by lead-time

Bill of Material (BOM)

• Single-level vs Multi-level; level codes differentiate stages; 99 % accuracy required

• Independent demand (finished goods) vs Dependent (components derived)

• Typical BOM problems: wrong/missing parts, wrong qty, variable qty, missing ops, ancillary items

• Engineering Change urgency: immediate, by date, after stock used; implement via FPO, effective date, or component structuring

Explosion Examples

• Example 1: Produce 100 A in period 8; computed orders for B,C,D,E via lead-time offset tables (see transcript tables)

• Example 2: Product K with on-hand 50, M & R components; showed MRP of dependent items with scheduled receipts

• Example 3: Multiple parents J & K drawing common component M; lot sizing $m=30$, calculated projected balances & PORs

MRP II System

• Extension of MRP; integrates capacity & financial implications; supports “what-if” simulation

• Objectives – optimise service & cost across full management process (business planning → execution)

• Functional Elements: Business Planning, Master Production Planning, MRP, CRP (all linked)

• Planning record shows periods 1-10 with GR, SR, PAB, NR, PORc, PORl

ERP System

• Enterprise-wide integrated information system (SAP, Oracle, SSA, Microsoft)

• Covers manufacturing, order entry, GL, purchasing, warehousing, HR, etc.

• Objectives: improve service, competitiveness, automate solutions, raise efficiency, reduce waste, modernise processes

• Advantages: higher quality & efficiency, decision support, agility, flexibility

• Disadvantages: customisation issues, process re-engineering risk, high cost & vendor lock-in, data-sharing resistance, integration dependency, heavy training

Tutorials & Practice Problems (Section 28–29)

• Build product structure trees & BOMs for given parent/child relationships (products A, X, M, Y, Z)

• Identify BOM inaccuracies (list any 4)

• Complete MRP record for Item W with on-hand 20, LFL policy, lead-time 1 week, component items B–E with given policies

• Johnson sequencing for Shaping & Grinding jobs A–F

  • (i) Determine optimal sequence

  • (ii) Draw bar (Gantt) chart using $10\,\text{mm}=5\,\text{min}$

  • (iii) Compute throughput time

  • (iv) Compute total idle time

• EOQ exercise: stationery, $D=8500, C=3.8, S=10, I=20\%$

  • Calculate $EOQ$ (nearest unit), order frequency, total inventory cost

These bullet-point notes capture every major & minor concept, numerical reference, equation, example and implication presented in the transcript. They can stand alone as a comprehensive study guide for Production Planning & Control, Scheduling, Inventory Management, and ERP-related systems.