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Production Planning and Control HierarchyProduction Planning and Control HierarchyStrategic and Business Planning

Demand Management

Sales and Operations Planning (S&OP)

Master Production Scheduling (MPS)

Material Requirements Planning (MRP I)

Capacity Requirements Planning (CRP) Vendor Requirements Planning (VRP)

Realistic?

Make Buy

Shop Floor Control (SFC) Purchase Planning and Control

Yes Yes

No No

Rough Cut Capacity Planning

Vendor/Material Limitations

Management Decisions

Realistic?

Supply Chain Management

Just in Time

Push and Pull Mfg

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Production/Manufacturing/OperationProduction/Manufacturing/Operation

Definition:

Production/manufacturing/Operation/IE** is the process of converting raw materials or semi-finished products into finished products that have valuevalue in the market place.

This process involves the inputs of resourcesinputs of resources such as labour, equipment, material, information, capital or energy, while the outputsoutputs are finished products, scrap or waste.

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Production System

Raw materials

Capital/Energy

Labour

Equipment

Information

Finished products

Scrap

Waste

OutputsInputs

Inputs and OutputsInputs and Outputs

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Planning and ControlPlanning and Control

Definition:

Planning is the act of looking aheadahead and setting a set of actionsactions to achieve an objectiveobjective. Production Planning is about matchingmatching needed production to available resources.

Control involves making events conform to conform to planplan, i.e., compare actual vs. planned

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Production Planning and ControlProduction Planning and Control

Definition:

Production Planning and Control (PPC) is the set of functions concerned with the effective utilization of limited resources and the management of material flow through these resources, so as to satisfy customer demands and create profits.

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Modes of ProductionModes of Production

1. Primary industries (extraction)Extraction of materials from their natural source

e.g. Agriculture, hunting, fishing, mining, forestry

2. Secondary industries (construction, manufacturing, public utility)e.g. Refinement, conversion, fabrication, assembly

3. Tertiary industries (services)e.g. transportation, sales, trade, distribution, government, education, health, retailing, catering

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Total Employment by SectorTotal Employment by Sector

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Total Employment by IndustryTotal Employment by Industry

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Production Planning & Control DecisionsProduction Planning & Control Decisions

• What should be produced, how much, and when (forecasting/demand management, aggregate planning/sales & operations planning, master production scheduling)?

• How much can we produce (capacity requirements planning)?

• How much do we have and how much do we need (inventory management / material requirement planning / just in time)?

• When should we produce (scheduling/shop floor control)?