Lec 5 Production Planning

8/8/2019 Lec 5 Production Planning

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Production Planning


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Production Planning

` What to produce

` When to produce

` How to produce


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Overview ofOperational

Planning Activities

` Long-Range Planning Focuses on strategic issues relation to capacity,

products, processes and plant location.

` Intermediate-Range Planning Focuses on tactical issues pertaining to aggregate

workforce and material requirements for the coming

year (Aggregate Planning).

` Short-Range Planning Addresses day-to-day issues of scheduling workers

on jobs at assigned work stations.


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Aggregate PlanningAggregate planning is medium -range capacity

planning which typically covers a time horizon of

anywhere from 3 to 18 months.

The goal of aggregate planning is to achieve a

production plan which will effectively utilize the

organizations resources to satisfy expected

demand.

Aggregate planning aims at an overall plan without

Distinguishing products


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`Aggregate production planning is done in anorganization to match the demand with the

supply on a period by period basis in a cost

effective manner


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Aggregate Demand

Over all demand of different products and

services, the company offers.


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Aggregate Planning Strategies

` Pure

` Mix


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Purestrategies are as follows

` Building and utilizing inventory through constant

work force

` Varying the size of work force` Overtime utilization

` Subcontracting


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Mix Strategies

` Mix strategies could be the combination of any

pure strategies


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Steps for Developing the Aggregate Plan

` Step 1- Choose strategy: level, chase or hybrid

` Step 2- Determine the aggregate production rate` Step 3- Calculate the size of the workforce

` Step 4- Test the plan as follows:x Calculate Inventory, expected hiring/firing, overtime needs

x

Calculate total cost of plan` Step 5- Evaluate performance: cost, service, human

resources, and operations


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Aggregateplan forservices firms

Service organizations also use aggregate planning,

some in exactly the same way with a manufacturing

firm.` How many accounts we need to open

` How many membership we need to sale

` How many patient we need to serve


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Master Production Schedule

(MPS)


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Master Production Schedule (MPS)

` MPS is product wise plan for manufacturing

products Which product will produce at what

time till what time


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MPSspecifies

` The sizing and timing of production orders for

specific items

` The sequencing of individual jobs` The short term allocation of resources to

individual activities and operations


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Time Fences in MPSMPS is divided into 4 section based on time called time fence

` 1.Frozen-MPS cannot be changed except on extraordinarysituation. After getting authorization from higher levels

because costly

` 2.Firm Change occur but exceptional situation

` 3.Full All products are allocated to orders, Change makesproduction cost to be affected in less amount

` 4.Open Not all production capacity has been allocated


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Updating MPS

In produce to Stock` Order come from warehouse within company

` Order based on future demand

` Forecast play important role in demand management.

` Lot size depend on economy

In Produce- to order` Demand management is customer.

` Lot size is also depending on customer order` Production is normally demand based


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Production, planning and control systems

Main types:

Push system Pull system


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PushSystems

` Use information about customers, suppliers, and

production to manage material flows

` Flows of materials are planned and controlled by aseries of production schedules that state when batches

of each particular item should come out of each stage of

production

` Can result in great reductions of raw-materials

inventories and in greater worker and process utilizationthan pond-draining systems


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Pull Systems

` Look only at the next stage of production and determine

what is needed there, and produce only that items

`

Raw materials and parts are pulled from the back of thesystem toward the front where they become finished

goods

` Raw-material and in-process inventories approach zero

` Successful implementation requires much preparation


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End ofTopic

Documents

Lec 5 Production Planning