Manufacturing Planning &

Control System
Major Tasks
restate business objectives in operations
management terms
ensure feasibility of plans
identify gaps in current resources
help formulate connective action-Suppliers
prioritize activities - scheduling
facilitate feedback
 Keys to MPC
Manufacturing Planning and Control System

A complete, current and accurate database

one set of records
high emphasis on data accuracy
quick correction of error in db
accessible to all who need data
System discipline
Transparent logic
 Production Plan
First step in the planning process
One of three high level plans
Business Plan
Sales Plan
Production Plan
differences between sales plan and production plan is the
inventory plan
Long term perspective
Stated in aggregate units
Issues Considered
Capacity management
level
chase
mixed
Requires coordination with marketing
Demand management
Master Production Schedule
Definition: document that defines the
specific goods that specific shops will
produce in definite quantities at definite
times over a short-term horizon in
accordance with the aggregate plan

The MPS represents an agreement

between marketing and manufacturing
 Master Production Schedule
A detailed disaggregation of production plan
Time-phased statement of how over the planning
horizon resources will be used to meet agreed-to
commitments
Tends to be:
short time horizon
more detailed product information (BoMs)
more concern over capacity
corporate plan
quasi-contract
updated regularly
What is the MPS?
Plan showing availability
Build schedule
Stated in BoM terms
MPS Problems
Overloaded
Front End Loaded
Unstable
Incomplete
Short Horizon
Wishlist
 Stability in MPS
Balance need of OM for stability and marketing for
change.
Why is stability important?
How introduced?
timing fencing
time fences denote different reaction to changes and willingness
to accommodate change
recognizes increasing cost of change as we near current time
Different zones
types of changes
who approves
who bears cost
MPS Principles
The MPS must be in concert with the
production plan
The MPS must drive the entire materials
management system
Include all known requirements in the
preparation of the MPS and the FAX
Minimize the number of items needed to
adequately express the MPS and the FAS
Key Terms from Ch. 14
MPS Master Production Schedule
Short term
(Aggregate) Production Plan
families
BOM Bill of Material
Routing file
Material Requirements
Planning
Brunswick Motors

Applying MRP to Inventory

Planning & Scheduling
 MRP and Dependent Demand
Dependent Demand
demand that is derived
consists of WIP + Raw materials
concept of parent/component
independent demand in MPS
Problem with Dependent Demand
information generated
challenge - generating 100% CSL
past approach - s,Q
new approach - MRP
 Prior to MRP
Up to 1970s, extensive use of s,Q models
why? Simple to use, limited information
requirements, optional
Why move to MRP?
problems with s,Q models
high levels of inventory
high stockouts
poor customer services
Order launch & Expedite
 Why MRP? (2)
S,Q ignored BoM information
Item OQ OH
A 300 0
B (comp) 250 0
C 200 0
D 250 0
A uses 1 B; B uses 1 C; C uses 1 D
What happens if we receive an order for 50 units
of A?
Other Factors
Major changes
high cost of inventory
increased availability of more powerful
computers
decreasing cost of computers
MRP now supported by extensive body
of software
 MRP Elements
Gross Requirements
On-Hand Inventory
Allocations
Scheduled Receipts
Net Requirements
Planned Order Releases
Time-phasing
Parent/Component
 MRP Elements
Planning factors
System nervousness
Firm planning
Explosion
Time buckets
Action bucket
Rolling the Schedule
Net Change vs. Regenerative MRP
Advantages of MRP
Forward looking when planning (visibility)
Useful simulator
Provides valid, credible priorities
priorities reflect actual needs, not implied needs.
Provides mangers with control over the
execution system
Forms basis for building credible, valid formal
system
Limitations of MRP
only looks at materials, ignores
capacity, shop floor conditions
requires user discipline
requires accurate information/data
requires valid MPS
not appropriate for all areas
high volume production
projects
Types of MRP Systems
MRP
Closed Loop MRP
MRP II
Distribution Requirements Planning
DRP II
Enterprise Requirement Planning
The Curve
42-50 A 23
37-41 B 37
31-36 C 30
26-30 D 7
>26 F 1

Mean 2.75