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© APICS CONFIDENTIAL AND PROPRIETARY1 1
Execution of Operations
Session 1
APICS Certified in Production and Inventory Management (CPIM)
Execution and Control of Operations
1 1 © APICS CONFIDENTIAL AND PROPRIETARY
Course Objectives
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Provide a review of principles and techniques as follows:– Execution of operations– Control of operations– Management and communication– Design tradeoffs
Provide a review of quality initiatives and continuous improvement.
Present techniques for evaluating performance.
Provide a basis for further study leading to APICS CPIM certification.
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Execution and Control of Operations
Case Studies and Review
Activity
Execution of Operations
Management and
Communication
Scheduling and Authorization
Quality and Continuous
Improvement
Control of Costs and Quality
Control of Production
Design Tradeoffs
1. 2. 3. 4.
5. 6. 7. 8.
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Learning Objectives
Manufacturing Planning– Describe the critical influence of strategic and business planning on an
organization’s manufacturing environment.
– Explain the influence of manufacturing process choices on execution and control of operations (ECO) choices.
– Explain the options posed by the interface between detailed scheduling and planning (DSP) and ECO.
– Contrast the use of material requirements planning (MRP)-based and lean/JIT-based execution systems in authorizing production in flow shop operations.
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Learning Objectives (cont.)
Defining Execution and Control Systems– Differentiate between manufacturing environments and manufacturing
process types.
– Explain the key differences between mass and continuous production processes.
– Describe the relationship between manufacturing processes and process layouts.
– Differentiate between batch and flow processes.
– Differentiate between rate-based and time-phased planning.
– Differentiate between push and pull principles.
– Explain the use of the pull system in replenishing inventory in lean/JIT production systems.
– Explain the market facing and manufacturing characteristics best suited to MRP-based and lean/JIT-based shop floor systems.
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Execution of Operations
Session 1
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Manufacturing Planning
Manufacturing Planning Hierarchy
Resource Planning
Rough-Cut Capacity Planning (RCCP)Master Scheduling
Sales & Operations Planning (S&OP)
Master Planning of Resources
Capacity Planning Material Planning
Scheduling
Strategic Planning
Business Planning
Near term
Man
ufac
turin
g P
lann
ing
and
Con
trol
Detailed Scheduling & Planning
Execution & Control of Operations
Long term
Intermediate term
Dire
ctio
n S
ettin
g
Production Control
Production Reporting
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Strategic and Business Planning
Set direction for manufacturing planning and control.
Focus on the medium-to-long (business plan) and long-term (strategic plan).
Determine order fulfillment strategies.
Determine process choices.
Influence process layouts.
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Manufacturing Planning & Control
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MPC Phase Level
Master Planning of Resources Tactical Planning
Detailed Scheduling and Planning
OperationsExecution and Control of
Operations
Master Planning of Resources
Sales and operations planning (S&OP): Integrate functional plans into a product-family sales and operations plan
Master scheduling: Disaggregate the production plan to create an end-item master production schedule (MPS)
Demand management: Ensure sales and operations plans and MPS are consistent with forecasts and orders
Distribution planning: Plan distribution inventory and validate adequacy of logistics resources to execute the sales and operations plan and MPS
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Detailed Scheduling and Planning
Discrete products made using job shop/intermittent production
Time-phased material planning logic: material requirements planning (MRP)
Infinite capacity planning: capacity requirements planning (CRP)
Discrete and nondiscrete products in assembly lines and continuous manufacturing
Rate-based material planning logic: production schedule
Finite capacity planning
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Batch Processes Flow Processes
• End item and component quantities needed to execute the MPS
• When items and quantities will be needed
• Items and quantities currently in stock
• Sufficiency of workers and equipment
Outputs
Execution and Control of Operations
Prioritize, sequence, and authorize work.
Execute plans, expedite, implement controls, record results.
Feedback results to master scheduling and production control to enable adjustments to plans.
Authorize production based on issuance of a schedule (MRP-based system).
Use visual systems to authorize start of production at work stations (lean/JIT-based system).
Maintain planned rate of production.
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Batch Processes Flow Processes
Problem 1.1 Manufacturing Planning
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Planning Level Responsibility Detail
Planning Horizon
Time Periods
Review Frequency
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Planning Level Responsibility Detail
Planning Horizon
Time Periods
Review Frequency
Business planning
S&OP
MPS
Distribution planning
Detailed material planning
Detailed capacity planning
President or CEOProducts, markets, revenue
Product familyBusiness unit executives
Master scheduler
Production or capacity planners
Logistics planner
Schedulers, shop supervisors
End item
Same as S&OP/MPS; resources
End item components
Workstation, part number, operation
Weeks, days, hours
Similar to MPS
3 to 18 months
15 months minimum
15 months to several years
Years, quarters, months
Months, quarters
Weeks, days
Same as S&OP/MPS
Weeks, days
Weeks, days, next job
Week, day
Week, day
Same as S&OP/MPS
Month, quarter
Annual, semiannual, quarter
Day, hour
Same as S&OP/MPS
Problem 1.1 Solution
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Execution of Operations
Session 1
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Defining Execution and Control Systems
Introduction
Manufacturing environments
Production processes
Process layouts
Requirements for execution and control activities
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Manufacturing Environments
Product Volume
Pro
du
ct
Va
rie
ty
HighLow
High
Engineer-to-Order
Make-to-Order
Assemble-to-Order
Make-to-Stock
Le
ad T
ime
Short
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Long
Process Types: Manufacturing
Project
Jobbing
Batch
Mass
Continuous Flow
Manufacturing process types
Process tasks
Process flow
Diverse/complex
Intermittent
Repeated/divided
Continuous
Var
iety
Source: Operations and Process Management, Slack et al., 2nd ed., 2009; reprinted by permission of Pearson Education
HighLow
High
Volume
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Process Layouts
Fixed positionlayout
Functionallayout
Cell layout
Productlayout
Based aroundprocess resources
Process layout
Based aroundproducts/services
Source: Operations and Process Management, Slack et al., 2nd ed., 2009; reprinted by permission of Pearson Education
Var
iety
HighLow
High
Volume
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Execution and Control: Selection Factors
CategoryBatch Processes
Flow Processes
Process typeJob shop or Intermittent
Batch flow Mass Continuous flow
LayoutFunctional (process)
Functional or product
Product Product
Routing Product specificProduct specific
Fixed Fixed
SchedulingOperations scheduling
Operations scheduling or : rate-based scheduling
Production scheduling: rate-based
Production scheduling: rate-based
Control MRP/PAC MRP/PAC MRP/PACMRP/ process flow scheduling
Transaction requirements
Very high High Low Low
Productivity toolsLean/TOC/Six Sigma
Lean/TOC/Six Sigma
Lean/TOC/Six Sigma
Lean/TOC/Six Sigma
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Principles of Push Systems
Rely on MPC to plan production priorities and capacity.
For batch processes– Create detailed time-phased schedules.– Release and push work orders through operations based schedules.– Use MRP-based production activity control.– Maximize capacity utilization.
For flow processes – Produce to rate-based schedules.– Maximize rate of product flow. – Create finished goods inventory as necessary.
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Push Model
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Supplier
MPS/Rough-Cut Capacity Planning
Material and Capacity Planning
Purchase Order
Work Center
Work Order
S&OP/Resource Planning
Information push
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Principles of Lean/JIT
Produce products only to customer orders.
Level demand so that work may proceed smoothly.
Link processes to customer demand through visual tools.
Maximize the flexibility of people and machinery.
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Pull System Model
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Part Z Manufacturer
Company X National DC
Company X Regional DC
Company X Dealer
Material flow
Information flow
Source: Lean Production Simplified, Dennis, 2nd ed., 2007
Pull System Simulation: Starting Instructions
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Coin flip = tails; customer orders a
white
To customer
2
WIP
FGI
1One-hour delivery lead time
Three-hour production lead time
3
1-3: Three actions triggered by coin flip (customer order)
4. Status before next coin flip
WIP
FGI
Queue Queue
4
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WIP: work in process; FGI: finished goods inventory
Problem 1.2 Pull System Simulation
1. Did you ever reach a stockout situation?
2. How many coin flips were necessary to make your determination?
3. What can you conclude about the need for finished goods inventory?
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1. What is the lowest level to which WIP and FGI can be reduced and still achieve 100 percent customer service with a one hour delivery lead time?
2. What assumption needs to be made about customer demand for this lean/JIT replenishment model to work?
Simulation Round 1
Simulation Round 2
Problem 1.2 Solution
1. Did you ever reach a stockout situation?
2. How many coin flips were necessary to make your determination?
3. What can you conclude about the need for finished goods inventory?
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1. What is the lowest level to which WIP and FGI can be reduced and still achieve 100 percent customer service with a one hour delivery lead time?
2. What assumption needs to be made about customer demand for this lean/JIT replenishment model to work?
Simulation Round 1
Simulation Round 2
You should not have reached a stockout situation.
Six flips should have been adequate.
Finished goods inventory served as a buffer against stockouts.
One each
The rate of customer demand needs to be steady.
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Problem 1.3 MRP and Lean/JIT Systems
Characteristics Best Suited to Shop Floor Systems
Marketing-FacingCharacteristics
Shop Floor Systems
MRP-Based Lean/JIT-Based
Product design
Product variety
Individual product volume/period
Ease of changing total volume
Ease of changing product mix
Delivery speed
Schedule changes
Manufacturing Related Characteristics
Process choice
Organizational control
Work in process
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Problem 1.3 Solution
Characteristics Best Suited to Shop Floor Systems
Marketing-FacingCharacteristics
Shop Floor Systems
MRP-Based Lean/JIT-Based
Product design custom standard
Product variety broad narrow
Individual product volume/period low high
Ease of changing total volume easy/incremental difficult
Ease of changing product mix less difficult more difficult
Delivery speed through schedule change through FGI
Schedule changes more difficult less difficult
Manufacturing Related Characteristics
Process choice low-volume batch high volume batch/line
Organizational control centralized decentralized
Work in process high lowSource: Jacobs, et al., Manufacturing Planning & Control for Supply Chain Management, 6th edition, copyright The McGraw-Hill Companies, Inc.
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Execution of Operations
Session 1
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Wrap-Up and Homework
Learning Objectives
Manufacturing Planning– Describe the critical influence of strategic and business planning on an
organization’s manufacturing environment.
– Explain the influence of manufacturing process choices on execution and control of operations (ECO) choices.
– Explain the options posed by the interface between detailed scheduling and planning (DSP) and ECO.
– Contrast the use of material requirements planning (MRP)-based and lean/JIT-based execution systems in authorizing production in flow shop operations.
1 31 © APICS CONFIDENTIAL AND PROPRIETARY1 31
Learning Objectives (cont.)
Defining Execution and Control Systems– Differentiate between manufacturing environments and manufacturing
process types.
– Explain the key differences between mass and continuous production processes.
– Describe the relationship between manufacturing processes and process layouts.
– Differentiate between batch and flow processes.
– Differentiate between rate-based and time-phased planning.
– Differentiate between push and pull principles.
– Explain the use of the pull system in replenishing inventory in lean/JIT production systems.
– Explain the market facing and manufacturing characteristics best suited to MRP-based and lean/JIT-based shop floor systems.
1 32 © APICS CONFIDENTIAL AND PROPRIETARY1 32
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Vocabulary Check
Objective: Reinforce terminology used in this session.
Complete the activity in class, individually or in pairs, or as homework.
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Vocabulary Check Solution
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F1
P2
C3
O N T I N U O U S M A N U F A C T U R I N GN L
R4
A T E B A S E D S C H E D U L I N GT S
J5
P6
R I O R I T Y P L A N N I N G YO O SB B
7
A T C H P R O C E S S I N G TS A EH L MO
8
P E R A T I O N S S C H E D U L I N GP A
P9
U S H S Y S T E MO
C10
E L L U L A R M A N U F A C T U R I N GT