Planning and Control in General

• What is planning and control?

• What is difference between planning and control?

• How does the nature of demand affect planning and control?

• What is involved in planning and control?

Concepts We need to Understand

• dependent demand and independent demand

• make-to-stock, make-to-order, resource-to-order

• loading, sequencing, scheduling and monitoring

• pull and push systems

Planning and Control– Reconcile Supply and Demand

Supply of products

and services

Planning and

Control

Demand for products and

services

Operation resources

Required time, quantity and

quality of products and

services

Customer requirement

s

Planning is deciding

Control is

what activities should take place in the operation and their quantities

when they should take place

what resources should be allocated to them

understanding what is actually happening in the the operation

deciding whether there is a significant deviation from what should be happening

(if there is deviation) changing resources in order to affect the operation’s activities

Planning and Control

Significance of planning or controlT

ime

ho

rizo

nH

ou

rs/d

ays

Day

s/ w

eeks

/ mo

nth

sM

on

ths/

year

s

Medium-term Planning and ControlUses partially dissaggregated demand forecasts

Determines resources and contingencies

Objectives set in both financial and operations terms

Long-term Planning and ControlUses aggregated demand forecasts

Determines resources in aggregated form

Objectives set in largely financial terms

Short-term Planning and ControlUses totally dissaggregated forecasts or actual demand

Makes interventions to resources to correct deviations from plans

Ad hoc consideration of operations objectives

PLANNING

CONTROL

Planning and control needs….

Information on Demand levels

Information on Resources

Dependent and Independent Demand

Dependent demande.g. input tyre store in car plant

Demand for tyres is governed by the number of

cars planned to be made

Demand for tyres is largely governed by

random factors

ACE TYRES

Independent demande.g. tyre fitting service

Dependent and Independent Demand-defining them

Demand = forecasts + known orders

• Dependent demand – the demand is mainly coming from known orders.

• Independent demand – the demand is mainly coming from forecasted figures.

P and D for the Different Types of Planning and Control

Purchase Make Deliver

DP

Purchase Make Deliver

Purchase Make Deliver

DP

Make to stock

Make to order

Resourceto order

PD

Where D is demand time and P is total throughput time.

MAKE TO STOCK

Purchase

And … – ‘make-to-stock and assemble-to-order’ Planning and Control

Make Parts Assemble Deliver

DP

Order

ASSEMBLE TO ORDER

Resource-to-order

Make-to-order

Make-to-stock

Dependent Demand

Independent Demand

Each product or service large compared with total capacity of each operation

Each product or service small compared with total capacity of each operation

Planning and Control Activities

Sequencing

MonitoringScheduling

Loading

Are activities going to plan?

When to do things?

In what order to do things?

How much to do?

Loading – the amount of work allocated in terms of time

Maximum time available

Normal time available Not worked

Planned time available

Planned running time Set-ups

Available time

Actual running time Down time

Sequencing – the order in which the work will be tackled

Various sequencing rules are used in operations:

- Customer priority;- Due date;- LIFO - last in first out;- FIFO - first in first out;

Longest operation time first;- Shortest operation time first.-

Scheduling – the details on starts and finishes of jobs

Gantt Chart • Created by American industrial engineer Henry

Gantt (1861-1919)• In a table format• Two dimensions-jobs (tasks) and time• the horizontal axis is directly proportional to time• Easy to draw and use for a day-to-day plan

JOB Mon 6th

Tue7th

Wed 8th

Thur 9th

Fri 10th

Mon 13th

Tue 14th

Table

Shelves

Kitchen units

Bed

Time now

Scheduled activity time Actual progress

Gantt Chart for Job Progress

JOB Mon 6th

Tue7th

Wed 8th

Thur 9th

Fri 10th

Mon 13th

Tue 14th

Wood preparation

Assembly

Finishing

Paint

Time now

Scheduled activity time

Actual progress

T

B

B T

S K

S S S

K

KTS

B T

Gantt Chart for Work Centers

Non- productive time

Pull and Push Control

CENTRAL OPS. PLANNING AND CONTROL SYSTEM

Work centre

DEMANDWork centre

Work centre

Work centre

Instruction on what to make and where to

send it

FORECAST

PULL CONTROL

Work centre

Work centre

Work centre

Work centre DEMAND

Request Request Request Request

Delivery Delivery Delivery Delivery

PUSH CONTROL

KNOWN ORDERS

True or False

If the demand of a product is mainly from forecasts, we call this type of demand independent demand.

Resource-to-order planning and control is used for dealing with independent demand.

Time is the only important aspect in planning and control activities

Summary

• The three dimensions of planning and control are:

timing, quantity (volumes) and quality• The difference between dependent and independent

demand is the % of known orders or forecasts of the total demand

• Types of planning and control are:

‘make-to-stock’, ‘make-to-order’, ‘resource-to-order’, ‘make-to-stock and assemble- to-order’

• Planning and control activities are:

loading, sequencing, scheduling and monitoring