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Production Planning and Control

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Production Planning and Control

  1. 1. PRODUCTION <br /> PLANNING <br /> & CONTROL<br />Group<br />
  2. 2. 2<br />Dec-10<br />
  3. 3. Topics to be covered<br /><ul><li>The needfor Production Planning
  4. 4. Demand Forecasting
  5. 5. Aggregate Production Planning
  6. 6. Strategies of Aggregate Planning
  7. 7. Scheduling
  8. 8. Workforce Planning
  9. 9. Materials Requirement Planning
  10. 10. Capacity Planning
  11. 11. Production Control using JIT
  12. 12. Shop-Floor Control</li></ul>3<br />Dec-10<br />
  13. 13. The need for Production Planning<br />Addresses decisions on<br /><ul><li>Acquisition
  14. 14. Utilization
  15. 15. Allocation</li></ul> of limited production resources<br />Resources include the production facilities, labor and materials. <br />Constraints include the availability of resources, delivery times for the products and management policies. <br />4<br />Dec-10<br />
  16. 16. The need for Production Planning<br />Main objective is to take appropriate decisions.<br />Typical decisions<br /><ul><li>Work force level
  17. 17. Production lot sizes
  18. 18. Assignment of overtime
  19. 19. Sequencing of production runs</li></ul>5<br />Dec-10<br />
  20. 20. The need for Production Planning<br />Functions of <br />PPC<br />6<br />Dec-10<br />
  21. 21. Demand Forecasting<br />Objective <br /><ul><li>Topredict demand for planning purposes</li></ul>Laws of Forecasting<br /><ul><li>Forecasts are always wrong
  22. 22. Forecasts always change
  23. 23. The further into the future, the less reliable the </li></ul> forecast will be<br />7<br />Dec-10<br />
  24. 24. Demand Forecasting<br />Qualitative Demand Forecasting<br /><ul><li>Prediction Market
  25. 25. Delphi Technique
  26. 26. Game Theory
  27. 27. Intentions and Expectations Surveys
  28. 28. Conjoint Analysis</li></ul>8<br />Dec-10<br />
  29. 29. Demand Forecasting<br />Quantitative Demand Forecasting<br /><ul><li>Discrete Event Simulation
  30. 30. Quantitative Analogies
  31. 31. Neural Networks
  32. 32. Data Mining
  33. 33. Causal Models
  34. 34. Segmentation</li></ul>9<br />Dec-10<br />
  35. 35. Aggregate Production Planning<br />Objective<br /><ul><li>To generate a medium-term production plan
  36. 36. To establish rough product mix
  37. 37. To anticipates bottlenecks
  38. 38. To align capacity and workforce plans.</li></ul>It is usually done for next 2 to12 months.<br />Demand changes over a period of time at a faster rate than the resources. Aggregate planning offers strategies to absorb these fluctuations.<br />10<br />Dec-10<br />
  39. 39. Aggregate Production Planning<br />Guidelines for Aggregate Planning<br /><ul><li>Determine demand for each period
  40. 40. Consider company policies that may have impact
  41. 41. Determine capacities for each period</li></ul> Regular time, overtime, subcontracting, etc.<br /><ul><li>Identify backorder or inventory amount
  42. 42. Determine costs of operation
  43. 43. Continue through time horizon to calculate total cost
  44. 44. Develop alternate plans and compute cost for each
  45. 45. Select the plan that meets objectives</li></ul>11<br />Dec-10<br />
  46. 46. Aggregate Production Planning<br />Assumptions in Aggregate Planning<br /><ul><li>The regular output capacity is the same in all </li></ul> periods. <br /><ul><li>Cost is a linear function composed of unit cost </li></ul> and number of units. <br /><ul><li>Plans are feasible : sufficient inventory capacity </li></ul> exists to accommodate a plan, subcontractors with <br /> appropriate quality and capacity are standing by, <br /> and changes in output can be made as needed. <br />Contd…<br />12<br />Dec-10<br />
  47. 47. Aggregate Production Planning<br />Assumptions in Aggregate Planning<br /><ul><li>All costs associated with a decision option can be </li></ul> represented by a lump sum or by unit cost that are <br /> independent of the quantity involved<br /><ul><li>Cost figures can be reasonably estimated and are </li></ul> constant for the planning horizon <br /><ul><li>Inventories are built up and drawn down at a </li></ul> uniform rate and output occurs at a uniform rate <br /> throughout each period<br />13<br />Dec-10<br />
  48. 48. 14<br />Aggregate Production Planning<br />Output of Aggregate Planning<br /><ul><li>Production quantity from regular time, overtime </li></ul> and subcontracted time<br /><ul><li>Inventory held for determination of how much </li></ul> warehouse space and working capital is needed<br /><ul><li>Backlog or stock-out quantity for determining the </li></ul> customer service levels<br />Dec-10<br />
  49. 49. Strategies in Aggregate Planning<br />Level plans<br /><ul><li>Use a constant workforce & produce similar </li></ul> quantities each time period<br /><ul><li>Use inventories and backorders to absorb </li></ul> demand peaks & valleys<br />Chase plans<br />Minimize finished good inventories by trying to keep pace with demand fluctuations<br />15<br />Dec-10<br />
  50. 50. Strategies in Aggregate Planning<br />Level plans<br />Production<br />Demand<br />Units<br />Time<br />Dec-10<br />16<br />
  51. 51. Strategies in Aggregate Planning<br />17<br />Chase plans<br />Production<br />Demand<br />Units<br />Time<br />Dec-10<br />
  52. 52. Strategies in Aggregate Planning<br />Hybrid or Mixed Strategies<br /><ul><li>Build-up inventory ahead of rising demand and </li></ul> use backorders to level extreme peaks<br /><ul><li>Layoff or furlough workers during lulls
  53. 53. Subcontract production or hire temporary </li></ul> workers to cover short-term peaks<br /><ul><li>Reassign workers to preventive maintenance </li></ul> during lulls<br /><ul><li>Influencing Demand</li></ul>18<br />Dec-10<br />
  54. 54. Scheduling<br /><ul><li>Concerned with timetable of production</li></ul>Scheduling arranges the different manufacturing operations in order of priority, fixing the time & date for the commencement & completion of each operation.<br />Types of scheduling<br /><ul><li>Forward scheduling
  55. 55. Backward scheduling </li></ul>19<br />Dec-10<br />
  56. 56. Scheduling<br />The pattern of scheduling differs from one job to another which is explained as below.<br /><ul><li>Master Schedule
  57. 57. Production Schedule
  58. 58. Manufacturing Schedule
  59. 59. Scheduling of Job Order Manufacturing</li></ul>20<br />Dec-10<br />
  60. 60. Workforce Planning<br />To find out and direct<br /><ul><li>Right people
  61. 61. Right place
  62. 62. Right time
  63. 63. Right price</li></ul>21<br />Dec-10<br />
  64. 64. Workforce Planning<br />Issues<br /><ul><li>Basic Staffing Calculations and labor hours
  65. 65. Working Environment
  66. 66. Flexibility/Agility
  67. 67. Quality</li></ul>22<br />Dec-10<br />
  68. 68. Materials Requirement Planning<br />MRP is a production planning and inventory control system used to manage manufacturing processes.<br />An MRP system has 3 major objectives<br /><ul><li>Ensure materials are available for production and </li></ul> products are available for delivery to customers<br /><ul><li>Maintain the lowest possible level of inventory
  69. 69. Plan manufacturing activities, delivery schedules </li></ul> and purchasing activities<br />23<br />Dec-10<br />
  70. 70. Materials Requirement Planning<br />MRP steps<br /><ul><li>Takes output from the planning phase (master plan)
  71. 71. Combines that with the information from the </li></ul> inventory record and product structure records<br /><ul><li>Determines a schedule of timing and quantities for </li></ul> each item<br />The basic idea is to get the right materials to the right place at the right time.<br />24<br />Dec-10<br />
  72. 72. Materials Requirement Planning<br />25<br />Dec-10<br />
  73. 73. Materials Requirement Planning<br />26<br />Dec-10<br />
  74. 74. Capacity Planning<br /><ul><li>The process of determining the production </li></ul> capacity needed to meet changing demands<br /><ul><li>Maximum amount of work that an organization is </li></ul> capable of completing in a given period of time<br />27<br />Dec-10<br />
  75. 75. Capacity Planning<br />Wrong Capacity<br />Dec-10<br />28<br />
  76. 76. Capacity Planning<br />Classes of capacity planning<br /><ul><li>Lead strategy
  77. 77. Lag strategy
  78. 78. Match strategy</li></ul>29<br />Dec-10<br />
  79. 79. Capacity Planning<br />Issues<br /><ul><li>Stand-alone capacities and congestion effects
  80. 80. Capacity Strategy
  81. 81. Make-or-Buy
  82. 82. Flexibility
  83. 83. Scalability and learning curves</li></ul>30<br />Dec-10<br />
  84. 84. Production Control using JIT<br />JIT is the technique for reducing inventories and elimination of waste in the production system.<br />Objectives<br /><ul><li>To eliminate waste
  85. 85. To improve quality
  86. 86. To minimize lead time
  87. 87. To reduce costs
  88. 88. To improve productivity</li></ul>31<br />Dec-10<br />
  89. 89. Production Control using JIT<br />Pull production and kanban<br />JIT is associated with pull systems.<br />Toyota was the first developer of kanban system.<br />Examples<br /><ul><li>McDonalds'
  90. 90. Office Xerox Paper</li></ul>32<br />Dec-10<br />
  91. 91. Production Control using JIT<br />Issues<br /><ul><li>JIT Interdependencies
  92. 92. Implementing Issues
  93. 93. JIT purchasing
  94. 94. Expected Outcomes</li></ul>33<br />Dec-10<br />
  95. 95. Shop floor Control<br />Objective<br />To control flow of work through plant and coordinate with other activities (e.g., quality control, preventive maintenance, etc.)<br />34<br />Dec-10<br />
  96. 96. Shop floor Control<br />WIP<br />Tracking<br />Throughput<br />Tracking<br />Material Flow<br />Control<br />Status<br />Monitoring<br />Work<br />Forecasting<br />Capacity<br />Feedback<br />Quality<br />Control<br />35<br />Dec-10<br />
  97. 97. Shop floor Control<br />Functions<br /><ul><li>Gross Capacity Control
  98. 98. Match line to demand by staffing (workers/shifts)
  99. 99. Varying length of work week (or work day)
  100. 100. Using outside vendors to augment capacity</li></ul>Contd…<br />36<br />Dec-10<br />
  101. 101. Shop floor Control<br />Functions<br /><ul><li>Bottleneck Planning
  102. 102. Handling of bottlenecks
  103. 103. Cost of capacity is the key
  104. 104. Stable bottlenecks are easier to manage
  105. 105. Span of Control
  106. 106. Physically or logically decompose system
  107. 107. Span of labor and process management</li></ul>37<br />Dec-10<br />
  108. 108. Shop floor Control<br />Issues<br /><ul><li>Customization</li></ul> SFC is often the most highly customized activity in <br /> a plant. <br /><ul><li>Information Collection</li></ul> SFC represents the interface with the actual <br /> production processes and is therefore a good <br /> place to collect data.<br />Contd…<br />38<br />Dec-10<br />
  109. 109. Shop floor Control<br />Issues<br /><ul><li>Simplicity</li></ul> Departures from simple mechanisms must be <br /> carefully justified.<br />39<br />Dec-10<br />
  110. 110. THANK YOU<br />
  111. 111. Bibliography<br />41<br /><ul><li>Management Science II, by Dr.T.T. Narendran, IIT </li></ul> Madras (pdf format)<br /><ul><li>Shop floor Control, by Wallace J Hopp and Mark </li></ul> J Spearman, 1996-2000<br /><ul><li>www.factory-physics.com
  112. 112. Production Planning and Control, Lesson 8, Abha </li></ul> Kumar<br /><ul><li>Production and Inventory Control, by Dr. Lotfi K. </li></ul> Gaafar, 2005 (ppt format)<br /><ul><li>Manufacturing Planning and Control, by Stephen </li></ul> C. Graves, MIT Boston, Nov1999 (pdf format)<br />Dec-10<br />
  113. 113. Bibliography<br />42<br /><ul><li>http://en.wikipedia.org/wiki/Aggregate_planning
  114. 114. http://www.slideshare.net/birubiru/aggregate-</li></ul> planning-2069281<br /><ul><li>http://www.buec.udel.edu/murphys/2009%20SLIDE</li></ul> %20PACKET/Chapter13AggPlanFINAL.pdf<br /><ul><li>http://www.scribd.com/doc/11590350/Aggregate-</li></ul>Planning<br /><ul><li>Production Planning and Inventory Control, 2nd Edition, </li></ul>by Seetharama L. Narasimhan, Dennis W. Mcleaveyand <br /> Peter J. Billington<br />Dec-10<br />