3. Production Planning Hierarchy Master Production Scheduling Production Planning and Control Systems Pond Draining Systems Aggregate Planning Push Systems Pull Systems Focusing on Bottlenecks Long-Range Capacity Planning
4. 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)
5. 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
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. Relationships Between OM Elements Marketplace and Demand Research and Technology Product Decisions Process Planning & Decisions Aggregate Plan for Production Detailed Work Schedules Master Production Schedule Priority Planning & Scheduling Demand Forecasts, orders External Capacity Plant Capacity Raw Materials Available Inventory On Hand Work Force
8. Hierarchical Production Planning 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
27. Aggregate Planning Example A small manufacturing company with 200 employees produces umbrellas. The company produces the following three product lines: 1) the Executive Line, 2) the Durable Line and 3) the Compact line, as shown in the below Executive Line Durable Line Compact Line
28. Aggregate Planning Example: Demand for Executive Umbrellas Number of working days: Jan: 22 Feb: 19 Mar: 21 Apr: 21 May: 22 Jun: 20
38. Aggregate Planning Example Which Plan is Cheaper? Clearly, the level capacity plan is cheaper over the selected time horizon Note: Be cautious in using the chase strategy as many intangibles, such as employee loyalty and commitment to the organization are adversely affected $260,411.00 $249,100.00 Chase Level Capacity
39. Production Plan Example 110 400 1500 — 1250 — 1000 — 750 — 500 — 250 — 0 — | | | | 1 2 3 4 Quarter Paint (thousands of gallons) 510 300 Inventory consumption Production plan Requirements Inventory accumulation