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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