operation and management

1. Manufacturing Planning
and
Control

2. ISSUE
“The fundamental problem
of operations management is
balancing capacity and
demand …”

3. Manufacturing Planning and Control
Marketing Strategic Financial
Planning Planning Planning
Resource Aggregate Demand
Planning Production Management
Planning
Master Production Rough-Cut Capacity
Schedule (MPS) Planning (RCCP)
Material Capacity
Requirements Requirements
Planning (MRP) Planning
Production Activity Capacity
Control Control

4. Processes in Production Planning
and Control
• DEMAND MANAGEMENT
• AGGREGATE PRODUCTION PLAN
• MASTER PRODUCTION SCHEDULE
• CAPACITY REQUIREMENT PLAN
• MATERIAL REQUIREMENT PLAN
• OPERATIONS SCHEDULING
• SHOP FLOOR CONTROL
• INPUT OUTPUT CONTROL

5. INTERFACES TO PRODUCTION
PLANNING AND CONTROL
• TO ARRIVE AT MPS WE NEED FIRM ORDERS FROM
CUSTOMERS OR FORECAST OF DEMAND FROM Sales
/CUSTOMERS
• TO ARRIVE AT CAPACITY REQUIREMENT PLANNING WE
NEED TO KNOW THE AVAILABILITY OF THE MACHINE
CAPACITY WITH RESPECT TO THE DEMAND LOAD ON THE
CAPACITY
• TO ARRIVE AT THE MATERIAL REQUIREMENT PLAN WE
NEED THE MPS,ENGG DESIGN CHANGES,BILL OF MATERIAL
AND INVENTORY RECORDS
• MRP OUTPUTS PLANNED ORDER SCHEDULES FOR
INVENTORY AND PRODUCTION CONTROL

6. MASTER PRODUCTION
SCHEDULE
• MASTER PRODUCTION SCHEDULER
SHOULD:
-INCLUDE ALL DEMANDS FROM PRODUCT
SALES WAREHOUSE REPLENISHMENT
SPARES AND INTER PLANT REQUIREMENT
-KEEP SIGHT OF
AGGREGATE PLAN -KEEP
CUSTOMER ORDER PROMISES IN MIND
-IDENTIFY AND COMMUNICATE ALL
PROBLEMS

7. CAPACITY PLANNING
• CAPACITY IS A MEASURE OF ABILITY TO
PROVIDE CAPABILITY TO MEET MKT
DEMAND
• CAPACITY DECISIONS USE FOLLOWING
STEPS:
-MEASURE DEMAND
-MEASURE FINITE CAPACITY
-RECONCILE CAPACITY&
DEMAND
-EVALUATE ALTERNATIVES INCLUDING
SUBCONTRACTING

8. Managing Capacity
• Disaggregate the capacity management problems …
• Example:
– Resource requirements planning -- check the
production plan in aggregate units. Done before
MPS
– Rough cut capacity planning -- check the master
schedule in shop hours and MPS reworked if
required.
– Capacity requirements planning -- check the
materials plan in shop hours By default infinite
capacity is assumed. A separate exercise done on

9. MATERIAL REQUIREMENT
PLANNING
• MRP DRIVEN BY MPS
• WHAT MATRL TO BE ORDERED FROM
OUTSIDE AND WHAT MATRL TO BE MFG
INHOUSE TAKING INTO ACCOUNT
CURRENT INVENTORY LEVELS
• MRP RUN RESULTS IN CALCULATION OF
NET REQMNT AND RELEASE OF
PURCHASE ORDER OR WORK ORDER
• MRP USES A BILL OF MATERIAL FOR
PRODUCTS TO CALCULATE REQMNTS

10. OPERATIONS SCHEDULING
• SCHEDULING INVOLVES PREPARATION OF
TIME TABLE FOR WORK THAT NEEDS TO
BE DONE TO MEET CLIENT DATES OR TO
ACHIEVE DESIRED OBJECTIVE
• EFFECTIVE SCHEDULING DONE TO AVOID
BOTTLENECKS AND TO OPTIMIZE
UTILISATION OF SHOP FLOOR RESOURCES
• SHEDULING RULES REQUIRED TO
OPTIMIZE OPERATIONS

11. SCHEDULING RULES
• FIRST COME FIRST SERVED
• EARLIEST DUE DATE
• SHORTEST PROCESSING TIME
• LONGEST PROCESSING TIME
• LAST ARRIVED FIRST PROCESSED
• LEAST SLACK TIME
• LEAST CHANGEOVER COST

12. OPERATIONS SCHEDULING
• SCHEDULING SYSTEMS USE EITHER FINITE OR INFINITE LOADING
TECHNIQUES TO DETERMINE HOW MACHINE CAPACITY SHOULD
BE USED
• INFINITE CAPACITY OCCURS WHEN WORK IS ASSIGNED TO A
WORK CENTRE BASED ON WHAT IS NEEDED .IT IS PRESUMED
THAT CAPACITY IS ALWAYS AVAILABLE AND NO
CONSIDERATION IS GIVEN DIRECTLY TO WHETHER THERE IS
SUFFICIENT CAPACITY AT THE RESOURCES REQD TO DO WORK.
IN INFINITE LOADING SYSTEMS LEAD TIME IS ESTIMATED BY
TAKING MULTIPLE OF OPERATING TIME(SETUP +RUN TIME) PLUS
QUEUE DELAY IN MATRL MOVEMENT
• FINITE LOADING SCHEDULES IN DETAIL EACH RESOURCE
USING THE SETUP AND RUNTIME REQD FOR EACH ORDER
.SYSTEM DETERMINES EXACTLY WHAT EACH RESOURCE WILL
DO AT EACH MOMENT OF THE DAY

13. SCHEDULING AND CONTROL
FUNCTIONS
• ALLOCATING ORDERS TO WORK CENTRES
• DETERMINING SEQUENCE OF ORDER
OPERATIONS
• DISPATCHING OF ORDERS
• SHOP FLOOR CONTROL OF ORDERS
INVOLVING CONTROLLING PROGRESS OF
ORDERS AND EXPEDITING LATE AND
CRITICAL ORDERS