Manufacturing Planning and Control

Manufacturing
Planning and Control
Vollman/Berry/Whybark/Jacobs:
Manufacturing Planning and Control for Supply Chain
Management, 5/e (2005)
http://www.pom.edu/mpc/index.htm
Chapter 1
Vollmann, Berry, Whybark & Jacobs
Definition
A Manufacturing Planning and Control
system is a methodology designed to
manage efficiently the flow of material,
the utilization of people and equipment,
and to respond to customer requirements
by utilizing the capacity of our suppliers,
that of our internal facilities, and in some
cases that of our customers to meet
customer demand.
A Context for Thinking about
Manufacturing Planning and
Control (MPC)
What are processes?
Processes define how we do things!
Step 1  Step 2  Step 3  etc.
So, what is the role of MPC?
The MPC system tells the processes
what to work on.
Plans the resources that processes
use (i.e. people, equipment, material).
Plans for what processes will be doing in
the future.
Definition
Mfg Planning and
Control System
Plan the use of
people
Manage the
efficient flow of
materials
Driven by customer
demand and other
Customer requirements
Efficient use
of our capacity
and that of our
suppliers.
Possibly even
our customers.
Often part of a company’s ERP system.
Agenda
What influences the MPC system
design?
 What are the typical support
activities? (LT, MT, ST)
 Performance indicators
 MPC Framework (FE, E, BE)
 Matching MPC system with Needs
 Classification Schema
 Evolution & Responses

Key Areas of Influence on MPC
system design

Degree of Internationalization
Sempre più elevato per la spinta ad esternalizzare il
processo di produzione e concentrarsi su progettazione
e mercato. Nike. Macintosh. Dell (cfr. Chase).

Role of the customer in the system
Variabilità della dimensione e tipologia della domanda che
richiede flessibilità produttiva ottenuta abbassando
scorte, tempi di risposta e costo delle transazioni nel
sistema informativo con SC molto diversificate e sparse

Increasing use of Information Technology.
Necessario per supportare Lean SC con dati e procedure
comuni per unità organizzative funzionalmente,
geograficamente e culturalmente disparate e differenti
Typical Support Activities

Long Term

Intermediate Term and

Short Term.
Long Term (Piano di
Produzione=>MPS)
The system is responsible for providing
information to make decisions on (cfr.
Variabili strategiche, p.13 Seminario)):


The appropriate amount of capacity (intende
quantità per ogni tipo di capacità produttive)
- including supplier capacity - to meet the
market demands of the future.
Provide the appropriate mix of human
resource capabilities (profili tecnici e/o
professionali), technology, and geographic
locations.
Intermediate Term
The fundamental issue is matching supply
and demand in terms of both volume and
product mix.
Planning for the right logistics.
 Providing customers with information on
correct quantities and location to meet
market needs.
 Planning of capacity to determine
employment levels, budgets, overtime and
subcontracting needs, etc.

Short Term
There is a need for detailed scheduling of
resources to meet production
requirements.
Involves time, people, material,
equipment and facilities.
 Involves people working on the right
things.
 Involves tracking the use of resources
and execution results.
 Provide problem-solving support.

Performance Indicators
Output results
 Equipment utilization
 Cost associated with different
departments, products, labor
utilization, and project conditions.
 Measures of customer satisfaction
such as late deliveries, product
returns, quantity and quality errors.

Costs and Benefits of MPC
systems
The costs of an MPC are substantial
but so can be the
 Rewards (see examples).


Common to see ERP system costs
measured at 5-10% of cost of goods
sold.
An MPC System Framework

Front End (cfr. p.14 e segg. del Seminario)


Engine


Set of activities and systems for overall direction
setting (Demand Management, Sales &
Operations Planning, Resource Planning and
MPS)
Material Requirements Plans (MRP): Systems for
detailed material and capacity planning.
Back End

Depicts the MPC execution systems
Sales and operations
planning
Master production
scheduling
Detailed capacity
planning
Demand
management
Front End
Detailed material
planning
Engine
Material
Requirements
Plans (MRP)
Shop-floor
systems
Supplier
systems
Back end
Enterprise Resource Planning (ERP) System
Resource
Planning
Manufacturing Planning and Control System
Front End

Demand Management
Previsione di domanda del cliente finale. Ordini. Rapporti
interaziendali. Specifiche su parti di ricambio.
 Sales & Operations Planning
Coordinamento delle risorse produttive disponibili per
rispondere ai piani di vendita (sales/marketing planes).
 Resource Planning
Previsione delle risorse produttive e loro coordinamento

Master Production Schedule (MPS)
Cosa bisogna produrre e in quali tempi
Sales and operations
planning
Master production
Scheduling (MPS)
Demand
management
Front End
Enterprise Resource Planning (ERP) System
Resource
Planning
Front End
Detailed capacity
Detailed material
and systems for
planning Set of activities
planning
Engine
overall direction
Material and Management, Sales
setting (Demand
capacity plans
& Operations Planning, Resource
Planning and MPS)
Shop-floor
systems
Supplier
systems
Back end
Manufacturing Planning and Control System
Engine
 Detailed Capacity Planning (DCP)
Determina in dettaglio quali risorse produttive (persone,
macchine, …) occorrono per la produzione
 Detailed Material Planning (DMP)
Determina in dettaglio quali parti e materie prime occorrono per
la produzione in base alla “esplosione” (BOM: Bill Of
Materials) dei prodotti finali
 Material Requirements Plans (MRP):
Determina in dettaglio in quali tempi occorrono le parti e le
materie prime, in base al coordinamento delle risorse
produttive e ai BOM dei prodotti finali
Sales and operations
planning
Demand
management
Engine
Systems
for detail material
Master production
Front End
and scheduling
capacity planning.
Detailed capacity
planning
Detailed material
planning
Engine
Material and
capacity plans
Shop-floor
systems
Supplier
systems
Back end
Enterprise Resource Planning (ERP) System
Resource
Planning
Manufacturing Planning and Control System
Back End (execution systems)
 Supplier systems
Coordinamento tempi e quantità delle parti e delle materie prime
con I fornitori
 Shop-floor systems
Coordinamento e scheduling dettagliato delle operazioni per le
attività produttive
Sales and operations
planning
Master production
scheduling
Demand
management
Front End
Back
End
Detailed capacity
Detailed material
planning
planning
MPC execution
systems –Engine
Track progress
Materialand
and collect
capacity plans
data.
Shop-floor
systems
Supplier
systems
Back end
Enterprise Resource Planning (ERP) System
Resource
Planning
Manufacturing Planning and Control System
Matching MPC System with the
Firm needs (A DYNAMIC PROCESS)

As competitive conditions, customer expectations, supplier
capabilities, and internal needs change the MPC should
change. Di conseguenza anche l’importanza relativa dei vari
moduli dell’MPC cambia nel tempo.





The trend is towards on-line data access and systems
(principale cambio tecnologico: intra e inter unità
organizzative).
Physical changes influenzano l’MPC:
 Outsourcing mfg (manufacturing).
 Hollowing (ricercando) out of corporation (?), etc.
Providing information at the level where decision are made, in
appropriate time and frames, directly from the shop floor
Firms competing in product variety strength MPS and DMP
Firms competing on delivery speed need to improve
execution.
MPC Classification Schema
(enfasi degli approcci dell’MPC a seconda della complessità,
cioè numerosità dei componenti, e cadenza dei prodotti)
Number of Subparts
Da destra a sinistra diminuiscono: tempi dei cicli e di risposta,
immagazzinato e simili
MRP
Repetitive
(Beni discreti)
Project
Managment
Just-in-time
Flow
(quantità)
Seconds
Minutes
Days
Weeks
Time between successive units
Months
MPC Classification Schema
Number of Subparts
Flow (chemical plants, food, etc.)
Project
MRP
Just-in-time
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Time between successive units
Months
MPC Classification Schema
Number of Subparts
Repetitive Mfg. (automobiles, high
volume consumer products (i.e.
TVs)
Project
MRP
Just-in-time
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Time between successive units
Months
MPC Classification Schema
Number of Subparts
Just-in-Time systems (feedback
management for shorter life cycle
products – e.g. fashion items).
Focus on minimizing inventory in
the supply chain.
Project
MRP
Just-in-time
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Time between successive units
Months
Number of Subparts
MPC Classification Schema
MRP (feedforward management for
management of complicated longer
life products, i.e. machines,
electronic equipment).
Project
MRP
Just-in-time
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Time between successive units
Months
MPC Classification Schema
Number of Subparts
Project (unique; long term),
buildings, one of a kind
(satellites).
Project
MRP
Just-in-time
Repetitive
Flow
Seconds
Minutes
Days
Weeks
Time between successive units
Months
MPC Classification Schema
Flow (chemical plants, food, etc.)
 Repetitive Mfg. (automobiles,
watches, personal computers)
 Just-in-Time systems (shorter
production cycles)
 MRP (management of complicated
parts product)
 Project type (unique; long time).

Principles
The framework for the MPC is general
and all 3 phases must be performed but
specific applications must reflect
particular firm conditions and objectives.
 In SC environments, the MPC must
coordinate the planning and control
efforts.
 MPC systems should support the strategy
and tactics pursued by the company.

Principles
Different Manufacturing processes
dictate the need for different designs
of the MPC.
 The MPC should evolve to meet
changing requirements in the market,
technology, products, and processes.
 The MPC should be comprehensive in
supporting the management of all
manufacturing resources.

Principles
Different Manufacturing processes
and Supply Chains need different
designs of the MPC. … one size does
not fit all.
 The MPC must evolve to meet
changing requirements in the market,
technology, products, and processes.
 Major problem – the conflict between
the flexible and changing needs of
companies and the inflexibility of ERP
systems.


ERP Companies
SAP
 Oracle
 Microsoft

My Interest in the Topics
 Syllabus – Next Class

Principles
An effective MPC can contribute to
competitive performance by lowering
costs and providing greater
responsiveness to the market.
 In firms that have an integrated ERP
system and database, the MPC
system should integrate with and
support cross-functional planning
through the ERP system.
