The purpose of demand planning is to predict the behaviour of your customers,which is never directly within your control. The purpose of supply planning is totake the demand plan as given and schedule product to arrive in advance ofwhen the demand is likely to hit – this is something that you can control

Master Production Schedule View Talk

By Anonymous - Posted on 26 December 2011

The MPS (Master Production Schedule) define precisely the required quantity per period for each finished product to sell. The bucket is usually the week and the time horizon up to 3-6 months or a least twice the longest product leadtime.

The aggregate MPS at product level should match with the S&OP defined at product family level and the deviation should be under 3-5% maximum.The MPS is the reference for the customer service that needs to satisfy its customers, and also for the manufacturing that should plan accordingly taking into account the constraints.

The APICS dictionary defines the Master Production Schedule as follows:1) The anticipated build schedule for those items assigned to the master scheduler. The Master Scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives Material Requirements Planning. It represents what the company plans to produce expressed in specific configurations, quantities, and Dates. The Master production Schedule is not a sales forecast that represents a statement of demand. The Master Production Schedule must take into account the forecast, the production plan, and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals. Syn. Master Schedule2) The result of the master scheduling process. The master schedule is a presentation of demand, forecast, backlog, the MPS, the projected on hand inventory, the available-to-promise quantity.

The MPS is a vital link in the production planning system:

- It forms the link between production planning and what manufacturing will actually build;- It forms the basis for calculating the capacity and resources needed;- The MPS drive the MRP. As a schedule of items to be built, the MPS and bills of material determine what components are needed from manufacturing and purchasing;- It keeps priorities valid. The MPS is a priority plan for manufacturing.

The MPS forms a vital link between sales and production as follows:

- It makes possible valid order promises. The MPS is a plan of what is to be produced and when. As such, it tells sales and manufacturing when goods will be available for delivery;- It is a contract between marketing and manufacturing

Relationship to production planA PP is developed for a family of several items. The next step is to forecast demand for each item in the product family. With this data, the master scheduler must now devise a plan to fit the constraints. The term “master production schedule” refers to the last line of the matrix. The term “master schedule” refers to the process of arriving at that line. Thus the total matrix is called a master schedule.

You are here3B. Production planning

3B. Production planning View Talk

By Anonymous - Posted on 24 December 2011

Production planning and control systems refer to the backbone architecture, concept and main driver to plan, schedule and control production activities for a manufacturing enterprise. Effective production planning is of the topmost priority for organizations to surge ahead in this highly competitive environment. Production planning is very complicated procedure and is time consuming.

 A good planning system must answer four important questions :

1. What to make (Say item XYZ)2. What is required to make XYZ ( resources & raw materials)3. What do we have ?4. What & how much we need

These questions are answered by priority and capacity

Priority as established by the marketplace, relates to What products are needed, How Many are needed, and When they are needed. Priorities will change according to the business conditions. For example, a toy company that is preparing goods for the Christmas season will assign a priority to production of products that are projected to be its highest sellers. These products will take priority over other products that sell more steadily throughout the year.

Capacity is the Capability of manufacturing to produce goods and services (deliverables).  It depends on company Resources and the Availability of Material from suppliers.Capacity can be expressed as the time available or as the number of units or dollars produced in a given period.  The demand for goods must be translated into the demand for capacity.  This requires identifying product groups, or families, of individual products based on the similarity of manufacturing process.

Usually the following can be varied to adjust capacity:

1. People can be hired and laid off, overtime and short time can be worked, and shifts can be added or removed.2. Inventory can be built up in slack periods and sold or consumed during high demand.3. Work can be subcontracted or extra equipment leased.4. Manufacturing management is responsible for determining the least-cost alternative consistent with the goals and objectives of the business

In the long and short run, manufacturing must make plans to balance the demands with its resources and capacity. For long-range decisions, such as the building of new plants or the purchase of new equipment, the plans must be made for several years. For planning production over the next few weeks, the time span will be days or weeks.

are here8B. Inventory Planning

8B. Inventory PlanningBy Anonymous - Posted on 12 February 2012

The objectives of inventory management are to provide the required level of customer service and to reduce the sum of all costs involved. To achieve these objectives, 2 basic questions must be answered:

- How much should be ordered at time?- When should an order be passed?

Management must establish decision rules. Lacking any better knowledge, decisions rules are often made based on what seems reasonable. Unfortunately, such rules do not always produce the best results.

Stock-keeping unit (SKU)Control are exercised through individual items in a particular inventory. These are called a stock-keeping unit (SKU). 2 white shirts in the same inventory but of different sizes would be 2 different SKUs. The same shirt in 2 different inventories would be 2 different SKUs.-----------------------------------------------------------------------------------------------------------------------------------------------Lot-size decision rulesLot, or batch, is a quantity produced together and sharing the same production costs and specifications. Following are some common decision rules for determining what lot size to order at one time.

Lot-for-lotThe lot-for-lot rule says to order exactly what is needed. This technique requires time-phased information such as provided by a MRP or a MPS. Since items are ordered only when needed,

this system creates no unused lot-size inventory. Because of this, it is the best method for planning “A” items and is also used in a just-in-time environment.

Fixed-order quantityFixed-order quantity rules specify the number of units to be ordered each time an order is placed for an individual item or SKU. The advantage is that it is easily understood. The disadvantage is that it does not minimize the costs involved.A variation on this rule is the min-max system. In this system, an order is placed when the quantity available falls below the order point. The quantity ordered is the difference between the actual available at the time of order and the maximum.

Economic Order Quantity

Period Order Quantity

Order “n” periods supplyRather than ordering a fixed quantity, inventory management can order enough to satisfy future demand for a given period of time.-----------------------------------------------------------------------------------------------------------------------------------------------CostsIdeally, the ordering decision rules used will minimize the sum of the cost of ordering and the cost of carrying. The best known system is the economic-order quantity.

Independent Demand Ordering SystemsIf stock is not reordered soon enough, there will be a stockout and a potential loss in customer service. However, stock ordered earlier than needed will create extra inventory. The problem then is how to balance the costs of carrying extra inventory against the cost of a stockout.

In industry there are many inventories that involve a large investment and where stockout costs are high. Controlling these inventories requires effective reorder systems. 3 basic systems are used to determine when to order:

- Order point system,- Periodic review system,- Material requirements planning.The first two are for independent demand items; the last is for dependent demand i

You are here6. Production Ativity Control

6. Production Ativity Control View Talk

By Anonymous - Posted on 30 December 2011

The time arrives when plans must be executed, when material requirements planning and capacity requirements planning have been completed and the detail purchasing and production schedules must be determined and released for execution. The function of production activity control (PAC)--often called shop floor control (SFC)---is to have activities performed as planned, to report on operating results, and to revise plans as required to achieve desired result

Order release, dispatching, and progress reporting are the three primary functions of PAC. Dispatching is the activation of orders per original plans. Dispatching decisions are affected by queue management, I/O control, and priority control principles and techniques that are intertwined and mutually supportive. They are useful in the management of lead-time, queue length, work center idle time, and scheduled order completion. Reports on the status of orders, materials, queues, tooling, and work center utilization are essential for control. Many report types with various information are possible. Examining a given situation will reveal which reports and information are required.

Production activity control (PAC) is responsible for executing the MPS and the MRP. At the same time, it must make good use of labor and machines, minimize work-in-process inventory and maintain customer service.

The MRP authorizes PAC: - To release work orders to the shop for manufacturing;- To take control of work orders and make sure they are completed on time;- To be responsible for the immediate detailed planning of the flow of orders through manufacturing, carrying out the plan and controlling the work as it progresses to completion;- To manage day-to-day activity and provide the necessary support.

PlanningThe flow of work through each of the work centers must be planned to meet delivery dates, which means PAC must do the following:- Ensure that the required materials, tooling, personnel and information are available to manufacture the components we needed;- Schedule start and completion dates for each shop order at each work center so the scheduled completion date of the order can be met. This will involve the planner in developing a load profile for the work centers.

ImplementationOnce the plans are made, PAC must put them into action by advising the shop floor what must be done. Usually instructions are given by issuing a shop order. PAC will:- Gather the information needed by the shop floor to make the product;- Release orders to the shop floor as authorized by the MRP. This is called dispatching.

ControlOnce plans are made and shop orders released, the process must be monitored to learn what is actually happening. The results are compared to the plan to decide whether corrective action is necessary. PAC will do the following:- Rank the shop orders in desired priority sequence by work center and establish a dispatch list based on this information;- Track the actual performance of work orders and compare it to planned schedules. Where necessary, PAC must take corrective action by replanning, rescheduling or adjusting capacity to meet final delivery requirements;- Monitor and control work-in-process, lead times and work center queues;- Report work center efficiency, operation times, order quantities and scrap.

Dispatch list.

Once all the operations are scheduled and the material has been picked and delivered to the work center, you can print a dispatch list to keep track of work order and work center status. A dispatch list (or query) displays by work center all work orders with operations scheduled for that work center in the following order:

All work orders, completed but not yet moved to another work center. All active (started) work orders (in-process and in-setup). All work orders which are ready to start (in queue and coming). All work orders on hold.