Session 3 - Production Planning System Flashcards Preview

Operation Management > Session 3 - Production Planning System > Flashcards

Flashcards in Session 3 - Production Planning System Deck (32)
Loading flashcards...
1

complexity of manufacture

right combination of: machinery, equipment, labour, materials to be profitable
--> right goods
--> right time
--> top quality
--> economically (min. cost)

2

Good Planning System must answer 4 Questions

1. WHAT will be make?
2. WHAT does it take to make it?
3. WHAT do we have?
4. WHAT do we need?

3

A) Manufacturing Planning & Control System (MPC)

1. Master Plan (Planning) --> Planning --> Implementation
2. General Direction --> Specific Detail Planning
3. Years --> Days
4. General Categories --> Individual components of work station

4

Priority
(Demand)

what products are needed
how many are needed
when they are needed
the marketplace establishes the priorities

5

Capacity
(Resources)

capability of manufacturing to produce P &S
depends on the resources of the company (machinery; labour; financial resources) &availability of material from suppliers

6

Capacity
Short- Term

Quantity of work that labour &equipment can perform in a given period

7

Trade- Off
Priority VS Demand

Manufacturing
responsible for devising plans
to satisfy the market demand if possible (but taking into account their own capacity)

8

A) MPC - Structure
MASTER PLAN

1. Strategic Business Plan
2. Production Plan
3. Master Production Scheduled

9

A) MPC - Structure
PLANNING

1. Strategic Business Plan
...
4. Master Procurements Plan

10

A) MPC - Structure
IMPLEMENTING

5. Production Activity Control and Purchasing

11

A1. Strategic Business Plan
Finance Plan

decide sources/uses of funds available;
CF;
return on investments;
budget

12

A1. Strategic Business Plan
Engineering Plan

Research &Development
design or modification of products
works close to marketing &production to design what will be sold in MP but has to be most economically

13

A1. Strategic Business Plan
Marketing Plan

responsible for analysis MP
Deciding firms response
--> market to b served; products supplied; desired level of C.S

14

A1. Strategic Business Plan
Production Plan

must satisfy MP; Demands
this is done by using plants; machinery, Equipment; RM; as efficient as possible
max. capacity and min. cost

15

A2. Production Plan

Quantities of each product needed for each period
Desired level of inventory
Resources of equipment, labour, materials in each period
Availability of resources needed

16

A3. Master Production Scheduling (MPS)

Plan for production of individual items
It breaks down production plan to show the Quantity of each end item to made for each period
INPUTS:
--> Production Plan
-->Forecast for each idv. item
--> Sales Orders &Inventories
--> Existing Capacity

17

A4. Material Requirement Plan
MRP

Plan for Production &Purchase of components used in making the items in the MPS
Shows the Quantities needed &when to manufacture to use
It is used within purchasing & production activity control to decide the purchase/manuf. of spec. items

18

A5. Purchasing & Production Activity Control (PAC)

Responsible for establishing &controlling the flow of RM into the factories
Responsible for Planning &Controlling workflow through the factory

19

B) Sales &Operating Planning

cross-functional business plan
involves: Sales/Marketing; P. Development; Operations; Senior Management

20

B) S&O Planning
STRUCTURE

Annual - Strategic B. Plan
Monthly - Sales &Operation Plan
(Marketing - Production Plan)
Weekly/Daily
(Detailed Sales Plan - MPS)

21

C) Manufacturing Resource Planning
MRP 2

Business Plan
Sales &Ope. Plan
Resources ok? --> Master Scheduled --> MRP
Resources ok? --> Purchasing /Production activity Control --> Performance Measures
If no Resources:
a) feedback from S&O Plan
b) feedback from Master Scheduled

22

D) Enterprise Resource Planning (ERP)

Framework for Organising &Defining &Standardising Business Processes
necessary to effectively Plan &Control an organisation
so it can use its internal knowledge to seek external advantage

23

D) ERP
STRUCTURE

Essential ERP encompasses total company &MRP 2 Manufacturing
Custom ERP Software:
--> Human Resources, Accounting; Shiping/Delivering
--> Production &Quality &Sales Management
--> Purchase & Inventory M
--> Key Performance Link

24

Typical Problems of Production Planning

time horizon is 12 months with periodic updates (monthly/quarterly)
Demand is fluctuating o seasonal (not constant)
Plant &Equipment are fixed within time horizon
Settled Management Objectives
--> low inventories; efficient Plant Operation; good CS; good labour relations

25

Developing Production Plan
1. Chase Strategy

Producing amounts demanded at any given time
Inventory levels remain stable while production varies to meet demand

26

Chase Strategy
Valuation

inventory can be kept to minimum
additional costs &enough capacity to adapt to changes (extra shift; hire/fire people)

27

Developing Production Plan
2. Production Levelling

Continual Production for an amount to equal average demand
company has to calculate total Demand over time spam of the plan &produce (on average) enough to meet demand

28

Production Levelling
Valuation

smooth level of operation that avoids cost of changing production levels
firms doesn´t need excess capacity to meet peak demand but enough!!!
inventory needs to be kept to minimum - but it will build up in low-demand periods (risky)

29

Developing Production Plan
3. Subcontracting

pure strategy which requires producing at minimum demand
any additional demand is met through subcontracting

30

Subcontracting
Valuation

cost associated with excess capacity/changing production level are avoided since production is levelled
BUT purchase cost (item cost, purchase, transport, inspection) maybe greater than if item where made in-house