Production Planning and Control

Production Planning and Control

• Production planning and control involves forecasting each step of production
• This ensures operations are completed efficiently and at the right time and degree
• It includes detailed scheduling of jobs, assigning workloads, and managing the flow of work

Production Planning Considerations

• What work should be done
• How the work should be done
• When the work should be done

Objectives of Production Planning

• Materials should be available at the right quality, quantity, and price
• Inventory control and regular supply of materials should be guaranteed
• Manpower planning is important for maintaining operational and managerial staff with the necessary skills and expertise
• Always consider available alternatives and select the best method of processing
• The choice of manufacturing methods depends on available production facilities and utilization of equipment
• Cost control can be achieved through wastage reduction, value analysis, inventory control, and efficient use of resources

Stage 1: Planning Phase

• Planning is an exercise of intelligent anticipation to establish how an objective can be achieved under restrictive circumstances
• The two categories of planning are prior planning and active planning

Prior Planning

• A pre-production planning that includes all planning efforts taking place prior to active planning
• Modules include product development and design, forecasting, aggregate planning, and material requirements planning

Modules of Prior Planning

• Product Development and Design: The process of developing a new product with all essential features for effective use, considering design for selling, manufacturing, and usage

• Forecasting: The estimate of future demand that requires proper care in estimation based on past data

• Sales forecasts, factory capacity, inventory levels, and workforce size are considerations to decide the rate of production

• Aggregate Planning: Aims to product-wise planning over the intermediate planning horizon.

• Material Requirement Planning: A technique for determining the quantity and timing for acquiring dependent items to meet the master production schedule

Action Planning

• Necessary planning details of the work that needs to be done include process planning, routing, material planning, tools planning, loading, capacity, and scheduling

Process Planning and Routing

• This determines the specific technological process steps and their sequence to produce products at the desired quality, quantity, and cost
• It determines the manufacturing method, selects tools and equipment, and analyzes how the product manufacturing will fit into existing facilities
• Routing prescribes the flow of work in the plant
• Routing relates to layout considerations, temporary locations for raw materials, components, and material handling systems

Material Planning

• A process that determines the requirements for raw materials/subassemblies involves considering the trade-off between various cost components like carrying, ordering, and shortage costs

Tools Planning

• Determines requirements for various tools by considering process specifications, material specifications, and equipment specifications

Loading

• This involves assigning jobs to machines to balance the load among them
• Requires efficient heuristic procedures

Capacity

• The ability to produce goods and services by having sufficient resources to satisfy demand
• Capacity can be expressed as available time or the number of units/dollars produced in a given period
• Demand must be translated into capacity requirements that help in identifying product groups, or families, of individual products based on the similarity of manufacturing process

Scheduling

• The time phase of loading that determines when and in what sequence the work will be carried out
• Determines the starting and finishing time for each job

Production Plan Strategies

• Production plan strategies include chase (demand matching), production leveling, subcontracting, and hybrid strategy.
• Chase Strategy: The strategy involves producing the amount demanded at any given time and inventory levels remain stable as production varies to meet demand.
• Production Leveling: The strategy involves continually producing an amount equal to the average demand.
• Subcontracting: Producing at the level of minimum demand and meeting any additional demand through subcontracting, avoiding excess capacity costs.
• Hybrid Strategy: A combination of the other three strategies, where production management finds a combination that minimizes the sum of all costs involved.

Types of Production Plans

• There include Make-to-Stock, Make-to-Order and Assemble-to-Order production plans

• Make-to-Stock: Products are made and put into inventory before an order is received, and sales/deliveries are made from inventory

• Level Production: The general procedure is to total the forecast demand, determine the opening/ending inventory, calculate the total production required

• Make-to-Order: Waiting until an order is received from a customer before starting to make the goods.

• Assemble-to-Order: When several product options exist, manufacturers produce/stock standard component parts and assemble when an order is received

Stage 2: Action Phase

• The action phase uses dispatching
• Dispatching acts as transition from the planning phase to the action phase
• During dispatching, the worker is ordered is start manufacturing the product
• Dispatching includes tasks such as job order, store issue order, tool order, time ticket, inspection order, and move order

Dispatching Tasks

• Tool Order: Instructs the tool room to issue necessary tools
• Time Tickets: Cards designed to note the actual time taken at various processes used to decide costs for future jobs and perform variance analysis

Production Control Defined

• A process that monitors production flow and resource usage and addresses deviations from planned actions

• Production control includes arrangements for remedies or adjustments for any deviation so that the production may run according to the original or revised schedule

• Ensures that all operations are in accordance with established rules and issued instructions

Objectives of Production Control

• Adhering to production schedules
• Issuing necessary instructions to staff
• Ensuring goods are produced according to prescribed standards and quality norms
• Ensuring inputs are available in the right quantity at the proper time
• Ensuring work progresses according to predefined plans

Stage 3: Control Phase

• Use progress reporting and corrective action

Process Reporting

• Contains data regarding current job status and helps compare current performance to expected levels
• Includes data of materials rejection, process variations, equipment failures, operator efficiency/absenteeism, and tool life

Corrective Action

• Tasks involve provisions for unexpected events
• Actions include creating schedule flexibility/modifications, capacity modifications, make-or-buy decisions, expediting work, and pre-planning

Control Action

• Expediting: Taking action to get back on plan if data indicates a significant deviation and the plan cannot be changed
• Re-planning: Redesigning the plan if expediting fails to correct deviations, or if there were errors made during the original plan's development

Manufacturing Planning and Control Systems

• Include Master production schedule (MPS), Material Requirements plan (MRP), Manufacturing Resource planning (MRP II), and Enterprise Resource planning (ERP)

Master Production Scgedule (MPS)

• A plan for the production of individual end times
• It breaks down the production plan to show the quantity of each end item to be made in each period
• It requires production plans, forecasts for end items, sales orders, inventories, and capacity inputs

Material Requirements Plan (MRP)

• A plan for the production and purchase of components/services used in making the items in the MPS
• A plan that establishes when components/services are needed to make each end item
• This has a high level of detail
• This has a planning horizon of 3 to 18 months

Manufacturing Resource Planning (MRP II)

• The manufacturing planning and control system, a master game plan for all departments in the company that works from the top down with feedback from the bottom
• A manufacturing resource planning system and the phrase “MRP II” distinguishes it from the “materials requirement plan” (MRP)

Enterprise Resource Planning (ERP)

• An accounting-oriented information system for identifying/planning enterprise-wide resources needed to make, ship, and account for customer orders
• ERP encompasses the entire company

This set of notes explores production planning and control involving forecasting each step of production. It ensures operations are completed efficiently and at the right time. It describes objectives such as material availability and inventory control.