IE 563 Advanced Production Planning and Control

Winter 2014
Hector A. Vergara
School of Mechanical, Industrial and Manufacturing Engineering Oregon State University

Today

Course Overview Introduction to Production Planning and Control

Instructors Information

Instructor: Dr. Hector A. Vergara Office: 422 Rogers Hall Phone: (541) 737-0955 Email: hector.vergara@oregonstate.edu Office Hours M 1:00 2:30 PM, W 2:30 4:00 PM By appointment Do not email technical questions about an assignment

Lengthy or potentially difficult questions should be handled face to face with instructor
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Prerequisites

IE 521

Some knowledge of optimization methods Knowledge of Engineering Statistics

ST 314

I am also assuming you have

Some ability to program in a general-purpose language such as C, VB, or Java Familiarity with spreadsheets and other office productivity software
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Course Information

Course Web Page:

http://classes.engr.oregonstate.edu/mime/winter2014/ie563

Syllabus

Contact info. and office hours Text references Class policy information grading, exams, homework, project Tentative course schedule

Blackboard site for IE 563

Slides for lectures (more on this later) Homework assignments and solutions Materials Announcements
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Recommended Textbook

Jacobs, F.R., Berry, W.L., Whybark, D.C., Vollmann, T.E. (2011). Manufacturing Planning and Control for Supply Chain Management (6th Ed). New York, NY: McGraw-Hill.

A great reference for MEng, also good for MS and PhD

We will move around the text according to the tentative course plan

Other References

Hopp, W.J. & Spearman, M.L. (2008). Factory Physics, 3rd ed., New York, NY: McGraw-Hill Irwin. Axster, S. (2006). Inventory Control, 2nd ed., Kluwer Academic Press. Elsayed, E.A. & Boucher, T.O. (1994). Analysis and Control of Production Systems, Prentice Hall. Pinedo, M. (2012). Scheduling: Theory, Algorithms and Systems, 4th ed., Springer.

Course Evaluation

Grading Weights:

Midterm Exam

30%

Tuesday, February 11

Final Exam

30%
15% 25%

Tuesday, March 18 9:30-11:20 AM

Homework

Approx. 6 total
Multiple deliverables

Term Project

Course Evaluation

The final course grades will be assigned using to the following scale:

A AB+ B BC+ C CD F

92% or more [89% - 92%) [86% - 89%) [82% - 86%) [79% - 82%) [76% - 79%) [72% - 76%) [69% - 72%) [59% - 69%) less than 59%
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Exams & Homework

Exams

Closed book and closed notes exams

No laptop computers permitted One double sized formula sheet (8.5x11) with hand-written notes allowed

Based on homework, lecture material & reading assignments

Homework

Homework assignments are due at the beginning of the lecture session

No late assignments will be allowed! Each HW is worth 10 pts.

Homework will be graded based on completeness

Group study is encouraged but splitting up assignments is not

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Term Project

Teams will work in a project during the term

Research and implementation of a topic within Production Planning and Control Multiple deliverables

Proposal Progress Report Final Report Presentation

No collaboration allowed between groups

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Classroom Rules

Arrive to class on time Be attentive during class Refrain from rude or distracting behavior No cell phone use during class

In general, use common sense and be considerate of others!

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Tentative Course Schedule

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Course Outline

Introduction to PP&C Supply Chain Inventory Management

Deterministic Inventory Models Stochastic Inventory Models

Sequencing and Scheduling MRP, MRP-II, CRP JIT

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Questions?

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Introduction to Production Planning and Control

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Course Catalog Description

IE 563 Advanced Production Planning and Control

Application of quantitative and heuristic methods to problems of production, material, and capacity planning. Mathematical models for inventory systems, sequencing and scheduling. Assembly line balancing methods. Just-in-Time manufacturing.

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Production Planning and Control

Definition

Manufacturing/production planning and control entails the acquisition and allocation of limited resources to production activities so as to satisfy customer demand over a specified time horizon

As such, planning and control problems are inherently optimization problems

The objective is to develop a plan that meets demand at minimum cost or that fills the demand that maximizes profit
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Manufacturing/Production Function
Resources: Workers Machines Raw Materials Mfg./Production System Finished Goods

Functional areas of a firm

Marketing Finance Production

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Product/Process Matrix
Low Volume Multiple Products Low Standardization Low Volume Few Products Higher Volume High Volume High Standardization

Jumbled Flow (job shop)

Commercial Printer

Void

Disconnected Line Flow (batch)

Heavy Equipment

Connected Line Flow (assembly line)

Auto Assembly

Continuous Flow

Void

Sugar Refinery

Source: Hopp and Spearman (2008), Factory Physics 3 rd ed.

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Supply Chains

Source: Simchi-Levi (2005), Designing and Managing the Supply Chain.

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Customer Expectations

The customer expects a different set of priorities from:

Speed of delivery Delivery reliability Availability from stock Cost Flexibility to customize a product Quality

To remain competitive, a firm has the ongoing goal of meeting customer expectations and maximize value to the customer
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Importance of PP&C

A big chunk of the economy is rooted in manufacturing Global competition has raised standard for competitiveness Operations can be of major strategic importance in remaining competitive

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Decision Support

The PP&C system provides the information upon which managers make effective decisions

The PP&C system does not make decisions nor manage the operations

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Decisions

Time Horizon

Long term (one year or more) Strategic

e.g., capacity/facility planning, workforce planning e.g., master production scheduling, material and resource requirements planning, inventory management

Medium term (weeks or months) Tactical

Short term (hours or days) Operational/Control

e.g., resource scheduling, shop-floor control, production tracking

Decisions made at each level affect the others

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Hierarchical Production Planning

Marketing Parameters FORECASTING Product/Process Parameters CAPACITY/FACILITY PLANNING Capacity Plan WORKFORCE PLANNING Personnel Plan Labor Policies

AGGREGATE PLANNING Aggregate Plan

Strategy
Customer Demands

WIP/QUOTA SETTING Master Production Schedule

DEMAND MANAGEMENT

WIP Position
REAL-TIME SIMULATION Work Forecast

SEQUENCING & SCHEDULING

Work Schedule SHOP FLOOR CONTROL PRODUCTION TRACKING

Tactics

Control

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Source: Hopp and Spearman (2008), Factory Physics 3rd ed.

PP&C Framework

The PP&C system is now usually imbedded in an Enterprise Resource Planning (ERP) system

Source: Jacobs et al. (2011), Manufacturing Planning and Control for Supply Chain Management

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PP&C Framework

Front End

Set of activities and systems for overall direction setting

Demand management

Demand forecasting and order entry Balances marketing/sales plans with available production resources States which end items or product options manufacturing will build in the future Determines the capacity necessary to produce the required products now and in the future

Sales and operations planning

Master Production Scheduling (MPS)

Resource planning

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PP&C Framework

Engine

Set of systems for detailed material and capacity planning

Detailed material planning

Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP-II)

Detailed capacity planning

Capacity Requirements Planning (CRP)

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PP&C Framework

Back End

Set of execution systems

Shop-floor systems

Sequencing and scheduling of orders Provide detailed information to company suppliers

Supplier systems

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PP&C Framework

All three phases must be performed

Specific applications reflect particular company conditions and objectives

Different manufacturing process dictate the need for different designs of the PP&C system In supply chain environments, the PP&C system must coordinate the planning and control efforts across all companies involved

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PP&C System Approaches

Depends on the complexity of the manufactured product

Project
Just-in-Time Repetitive Flow MRP

Number of subparts

Seconds Examples: Oil, food, drugs,

Minutes watches,

Days TVs,

Weeks trucks, planes,

Months houses, ships

Time between successive units

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Evolution of PP&C Systems

The requirements for the PP&C system are not static Changes are required as the following change:

Competitive conditions Customer expectations Supplier capabilities Internal needs

Requires different emphasis on various system modules over time Other factors:

Technology Manufacturing strategy

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