Production Planning & Control

Functions of Production Planning

Product selection & design
Process selection & planning
Facility location
Facility layout & materials handling
Capacity planning
Systems & procedures
Estimating quantity/costs of production, men
Routing operation sequence
Job scheduling & loading

Inventory control: MRP; JIT
Time management
Quality control
Maintenance & Replacement
Cost reduction & cost control
Dispatch
Expediting/Follow-up/Progressing

Main Functions

Forecasting to predict customer demand on various products over a given horizon.

Aggregate Planning to determine overall resources needed.

Materials Requirement Planning to determine all required components and timing.

Inventory Management to decide production or purchase quantities and timing.

Scheduling to determine shop-floor schedule of various components.

Quality Control

Purpose

Effectively utilize limited resources in the production of goods so as to satisfy customer demands and create a profit for investors.

Resources include the production facilities, labor and materials.

Constraints include the availability of resources, delivery times for the products, and management policies.

Forecasting

Objective: predict demand for planning purposes.
Laws of Forecasting:
1. Forecasts are always wrong!
2. Forecasts always change!
3. The further into the future, the less reliable the forecast will be!
Forecasting Tools:
Qualitative: Delphi, Analogies
Quantitative: Causal and time series models

Aggregate Planning

Objective: generate a long-term production plan that establishes a rough product mix, anticipates bottlenecks, and is consistent with capacity and workforce plans.
Issues:
Aggregation: product families and time periods must be set appropriately for the environment.
Coordination: AP is the link between the high level functions of forecasting/capacity planning and intermediate level functions of MRP, inventory control, and scheduling.
Anticipating Execution: AP is virtually always done deterministically, while production is carried out in a stochastic environment.

Workforce Planning

How much and what kind of labor is needed to support production goals?
Issues:
Basic Staffing Calculations: standard labor hours adjusted for worker availability.
Working Environment: stability, morale, learning.
Flexibility/Agility: ability of workforce to support plant's ability to respond to short and long term shifts.
Quality: procedures are only as good as the people who carry them out.

Capacity/Facility Planning

How much and what kind of physical equipment is needed to support production goals?
Issues:
Basic Capacity Calculations: stand-alone capacities and congestion effects (e.g., blocking)
Capacity Strategy: lead or follow demand
Make-or-Buy: vendoring, long-term identity
Flexibility: with regard to product, volume, mix
Speed: scalability, learning curves

Demand Management

Objective: establish an interface between the customer and the plant floor, that supports both competitive customer service and workable production schedules.
Issues:
Customer Lead Times: shorter is more competitive.
Customer Service: on-time delivery.
Batching: grouping like product families can reduce lost capacity due to setups.
Interface with Scheduling: customer due dates are are an enormously important control in the overall scheduling process.

Material Requirement Planning

Objective: Determine all purchase and production components needed to satisfy the aggregate/disaggregate plan.
Issues:
Bill of Materials: Determines components, quantities and lead times.
Inventory Management: Must be coordinated with inventory.