Manufacturing Planning and Control

Arief B. Suharko, Ph.D, CPIM

(arief.suharko@bakrie.ac.id)
 Context

• Internationalization
• Customer Role
• Increasing Use of Information Technology
 MPC System Defined

• Typical MPC Support Activities:

• Long term: to provide information to make decisions on the appropriate
amount of capacity (incl. equipment, buildings, suppliers, etc.) to meet the
market demands of the future.
• Intermediate term: to match supply and demand in terms of both volume
and product mix.
• Short term: to detail scheduling of resources to meet production
requirements.
• Costs and Benefits of MPC Systems:
• Initial cost can be substantial
• Ongoing operational costs are significant.
Product - Process Matrix
Product Structure, Product Life Cycle

Proc. Struct One Low vol. Mod. Vol. Hi. Vol. Hi. Vol. Comp. Key
Proc. Life of a Little Std. Customized Low var. Hi. Std. priority mgmt
cycle kind Hi Variety Multiple prod. Few major prod Commodity QCDF tasks

Project Plant Flex Fast reaction

None Quality Scheduling
Capacity
Print shop Cost est.
Job Shop Debottlenecking
Mach. shop
Order tracing
Fancy rest.
Standards &
Batch Pharmacy methods
Balancing
Car, TV MRP
Assembly Fast food rest Depend- Expansion
ability Efficiency
Continuous None Steel, Paper Cost Tech change
Capital
Vert. Integ.
Dominant Custom design Std. design
Custom design Long runs
competitive Quality control Vol. Mfg.
Gen. Purpose Spc. Equip
Service FGI
mode High margins Econ of Scale
High margins Distribution
Std. materials
Backup suppliers

4
 Framework

Sales and operations

Resource planning Demand management

Enterprise resource planning (ERP) system

planning

Master production Front end

scheduling

Detailed capacity Detailed material

planning planning
Engine
Material and capacity
plans

Back end
Shop-floor systems Supplier systems
 Matching with the Needs of the Firm

Number of subparts
An MPC Classification Schema

Project

MRP

Just-in-time

Repetitive

Flow

Seconds Minutes Days Weeks Months

Time between successive units

Examples: Oil, food, drugs, watches, TVs, trucks, planes, houses, ships
 MPC System Evolution
Forces for change Typical responses

Shorter product life cycles

Technology Marketplace dictates Company
Time-based competition
Products strategy
Supply chain partnerships
Processes Quality requirements
Systems
Flexibility/responsiveness
Techniques
Manufacturing strategy Reduced overhead costs

Automation
Manufacturing processes Production cells
Simplification

MRP
MPC system JIT
Cross-company linkages
 Concluding Principles

• The framework for MPC is general, and all three phases must be performed, but specific
applications necessarily reflect particular company conditions and objectives
• In supply chain environments, the MPC system must coordinate the planning and control efforts
across all companies involved.
• MPC systems should support the strategy and tactics pursued by the firm in which they are
implemented.
• Different manufacturing processes often dictate the need for different designs of the MPC system.
• The MPC system should evolve to meet changing requirements in the market, technology,
products, and manufacturing processes.
• The MPC system should be comprehensive in supporting the management of all manufacturing
resources.
• An effective MPC system can contribute to competitive performance by lowering costs and
providing greater responsiveness to the market.
• In firms that have an integrated ERP system and database, the MPC system should integrate with
and support cross-functional planning through the ERP system.
 Group Assignments

Choose one from below. Submit your group work in class next week.
• The discussion of the MPC framework seems to imply that overall direction setting must be done
before detailed material and capacity planning activities can be done. The latter must be done
before executing and controlling the plans is possible. Do you agree? Give an example supporting
your positions.
• Apply the MPC framework to a university setting, or institution. In particular, identify the front
end, engine, and back end.
• As changes take place in the world, the MPC system would require modifications to adapt. What
changes can you see that will require changes in the MPC system?