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 companys 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 pi 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

Variabilit della dimensione e tipologia della domanda che richiede flessibilit 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 unit 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 quantit per ogni tipo di capacit 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)

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. Depicts the MPC execution systems

Engine

Back End

Resource Planning

Sales and operations planning

Master production scheduling

Demand management

Enterprise Resource Planning (ERP) System

Front End

Detailed capacity planning

Detailed material planning Engine Material Requirements Plans (MRP)

Shop-floor systems

Supplier systems

Back end

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

Resource Planning

Sales and operations planning

Master production Scheduling (MPS)

Demand management

Enterprise Resource Planning (ERP) System

Front End

Front End Detailed capacity Detailed material planning Set of activities and systems for planning Engine overall direction Material and setting (Demand Management, Sales 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

Resource Planning

Engine Systemsproduction Master for detail material Front and scheduling planning. End capacity
Detailed material planning Engine Material and capacity plans

Sales and operations planning

Demand management

Enterprise Resource Planning (ERP) System

Detailed capacity planning

Shop-floor systems

Supplier systems

Back end

Manufacturing Planning and Control System

Back End (execution systems)

Supplier systems Coordinamento tempi e quantit delle parti e delle materie prime con I fornitori Shop-floor systems Coordinamento e scheduling dettagliato delle operazioni per le attivit produttive

Resource Planning

Sales and operations planning

Master production scheduling

Demand management

Enterprise Resource Planning (ERP) System

Front End

Back capacity Detailed End Detailed material planning planning MPC execution systems Engine Track progress and collect Material and capacity plans data.
Shop-floor systems Supplier systems

Back end

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 limportanza relativa dei vari
moduli dellMPC cambia nel tempo.

The trend is towards on-line data access and systems (principale cambio tecnologico: intra e inter unit organizzative). Physical changes influenzano lMPC: 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 dellMPC a seconda della complessit, cio numerosit dei componenti, e cadenza dei prodotti)
Da destra a sinistra diminuiscono: tempi dei cicli e di risposta, immagazzinato e simili

Number of Subparts

MRP

Project Managment

Repetitive (Beni discreti)

Flow (quantit) Seconds Minutes

Just-in-time

Days

Weeks

Months

Time between successive units

MPC Classification Schema

Flow (chemical plants, food, etc.)
Number of Subparts
Project MRP Just-in-time Repetitive

Flow
Seconds Minutes Days Weeks Months

Time between successive units

MPC Classification Schema

Number of Subparts

Repetitive Mfg. (automobiles, high volume consumer products (i.e. TVs)

MRP Just-in-time Repetitive

Project

Flow
Seconds Minutes Days Weeks Months

Time between successive units

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.
MRP Just-in-time Repetitive

Project

Flow
Seconds Minutes Days Weeks Months

Time between successive units

MPC Classification Schema

Number of Subparts

MRP (feedforward management for management of complicated longer life products, i.e. machines, electronic equipment).
MRP Just-in-time Repetitive

Project

Flow
Seconds Minutes Days Weeks Months

Time between successive units

MPC Classification Schema

Project (unique; long term), buildings, one of a kind (satellites).
Number of Subparts
Project MRP Just-in-time Repetitive

Flow
Seconds Minutes Days Weeks Months

Time between successive units

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.