2. A.R
Concept
• Production Planning and scheduling helps
to
– deliver the product to the customers on time.
– Maintain desired level of inventory.
3. A.R
Concept : Dependent Demand
• For any product for which a schedule can be
established, dependent demand techniques
should be used
4. A.R
Ranges of Production Planning – Time
perspective
• 5-10 years production planning
– Plant construction
– Location selection
– Product line decision / design
• 2- 5 years
– Capital budgeting
– Equipment and plant capacity decision
– Layout
• Month to a year
– Inventory decision
– Labour decision
5. A.R
Basic Functions : Production Planning and
Scheduling
• How much to produce (Volume) and when to
produce ( Timing)
• Optimal utilization of plant and capacity
determination
• Balancing output and capacity
6. A.R
Basic Terminologies
• Business Plan :
– Overall level of business activity forecasted for 6-18
months – Top level MGMT, expressed in monetary
units.
– Forecasting is based on ;
• General Economic condition
• Industries condition
• Level of competetion in the industry (Refer M. Porter’s Five
Force Model)
– Business Plan must be supported by
• Finance, Production, Marketing, R&D (functional
Dept)
7. A.R
Aggregate Output Planning
• Overall output planning for 6-18 months (how
much to produce during these periods)-
expressed in Units.
• But does not include product specifications such
as styles, colours, shape etc.
• Aggregate output planning must support the
business plan.
8. A.R
Aggregate capacity Planning
• Maintains balance between desired output
(expected demand and existing capacity)
• It balances
– Output level, capacity constraints, temporary capacity
adjustments – TO meet the demand.
9. A.R
Master Production Schedules
▶ Specifies
▶ what is to be made
▶ When
▶ How much
▶ Must be in accordance with the aggregate
production plan
▶ Inputs from financial plans, customer demand,
engineering, supplier performance
10. A.R
MPS – Objectives
▶ To meet the demand for an individual product in
a product family.
▶ Examples of product and product family
▶ Product family – Bakery
▶ Individual product – Cake / Biscuits/ Cookies.
▶ Disaggregating products families and
individual products and accordingly
schedules the production for an individual
product.
11. A.R
Master Production Schedule Contd.
▶ MPS is established in terms of specific products
▶ More detailed level of planning devides the product
groups into individual products.
▶ Schedule must be followed for a reasonable
length of time
▶ The MPS is a statement of what is to be
produced, not a forecast of demand
12. A.R
Master Production Planning Process
Sales & Operations
Planning
Generates an aggregate
plan
Supply Chain
Procurement
Supplier
performance
Human Resources
Staff planning
Production
Capacity
Inventory
Marketing
Customer
demand
Finance
Cash flow
Master production
schedule
13. A.R
Master Production Schedule Contd
• MPS coordinates Marketing and production
– Schedules the production for specific order
• MPS requires changes when;
– New improvement in method of production or
production process re-engineering
– Delayed supply or equipment failure
14. A.R
Factors to be considered in MPS /
Behavioural Considerations
• Production volume
• Production method
• Production policy
• Reliability of supply
• Current loading
• Internal transportation
• Capacity of plant and availability of Manpower
• Unanticipated events ; strikes, machine
breakdown, employee turnover
15. A.R
Material Requirement Planning
• Material requirement planning tells
– When to release and receive specific material – to
support the Master production schedules
16. A.R
Material Requirement Planning - Objectives
• Inventory reduction
• Kanban – availing materials at time in right quantity
• JIT-
• Production efficiency
• Reduction in production and delivery lead tiime
• Coordinate
– Production, inventory, procurement
17. A.R
Rough Cut Capacity Planning
• A process of testing the feasibility of production
schedules against the capacity.
• It examines whether existing capacity supports
the MPS .
• It identifies the gap between capacity
requirement and Master production schedule.
