1 chapter 13 production planning. 2 production planning hierarchy master production scheduling...
TRANSCRIPT
1
Chapter 13Chapter 13
Production Planning
2
Production Planning HierarchyProduction Planning Hierarchy
Master Production Scheduling
Production Planning and Control Systems
Pond DrainingSystems
Aggregate Planning
PushSystems
PullSystems
Focusing onBottlenecks
Long-Range Capacity Planning
3
Production Planning HorizonsProduction Planning Horizons
Master Production Scheduling
Production Planning and Control Systems
Pond DrainingSystems
Aggregate Planning
PushSystems
PullSystems
Focusing onBottlenecks
Long-Range Capacity PlanningLong-Range
(years)
Medium-Range(6-18 months)
Short-Range(weeks)
Very-Short-Range(hours - days)
4
Production Planning: Units of MeasureProduction Planning: Units of Measure
Master Production Scheduling
Production Planning and Control Systems
Pond DrainingSystems
Aggregate Planning
PushSystems
PullSystems
Focusing onBottlenecks
Long-Range Capacity PlanningEntire
Product Line
ProductFamily
SpecificProduct Model
Labor, Materials,Machines
5
Aggregate Planning
6
Why Aggregate Planning Is NecessaryWhy Aggregate Planning Is Necessary
Fully load facilities and minimize overloading and underloading
Make sure enough capacity available to satisfy expected demand
Plan for the orderly and systematic change of production capacity to meet the peaks and valleys of expected customer demand
Get the most output for the amount of resources available
7
InputsInputs
A forecast of aggregate demand covering the selected planning horizon (6-18 months)
The alternative means available to adjust short- to medium-term capacity, to what extent each alternative could impact capacity and the related costs
The current status of the system in terms of workforce level, inventory level and production rate
8
OutputsOutputs
A production plan: aggregate decisions for each period in the planning horizon about
workforce level inventory level production rate
Projected costs if the production plan was implemented
9
Medium-Term Capacity AdjustmentsMedium-Term Capacity Adjustments
Workforce level Hire or layoff full-time workers Hire or layoff part-time workers Hire or layoff contract workers
Utilization of the work force Overtime Idle time (undertime) Reduce hours worked
. . . more
10
Medium-Term Capacity AdjustmentsMedium-Term Capacity Adjustments
Inventory level Finished goods inventory Backorders/lost sales
Subcontract
11
ApproachesApproaches
Informal or Trial-and-Error Approach Mathematically Optimal Approaches
Linear Programming Linear Decision Rules
Computer Search Heuristics
12
Pure Strategies for the Informal ApproachPure Strategies for the Informal Approach
Matching Demand Level Capacity
Buffering with inventory Buffering with backlog Buffering with overtime or subcontracting
13
Matching Demand StrategyMatching Demand Strategy
Capacity (Production) in each time period is varied to exactly match the forecasted aggregate demand in that time period
Capacity is varied by changing the workforce level Finished-goods inventories are minimal Labor and materials costs tend to be high due to the
frequent changes
14
Developing and Evaluatingthe Matching Production Plan
Developing and Evaluatingthe Matching Production Plan
Production rate is dictated by the forecasted aggregate demand
Convert the forecasted aggregate demand into the required workforce level using production time information
The primary costs of this strategy are the costs of changing workforce levels from period to period, i.e., hirings and layoffs
15
Level Capacity StrategyLevel Capacity Strategy
Capacity (production rate) is held level (constant) over the planning horizon
The difference between the constant production rate and the demand rate is made up (buffered) by inventory, backlog, overtime, part-time labor and/or subcontracting
16
Developing and Evaluatingthe Level Production Plan
Developing and Evaluatingthe Level Production Plan
Assume that the amount produced each period is constant, no hirings or layoffs
The gap between the amount planned to be produced and the forecasted demand is filled with either inventory or backorders, i.e., no overtime, no idle time, no subcontracting
. . . more
17
Developing and Evaluatingthe Level Production Plan
Developing and Evaluatingthe Level Production Plan
The primary costs of this strategy are inventory carrying and backlogging costs
Period-ending inventories or backlogs are determined using the inventory balance equation:
EIt = EIt-1 + (Pt - Dt )
18
Aggregate Plans for ServicesAggregate Plans for Services
For standardized services, aggregate planning may be simpler than in systems that produce products
For customized services, there may be difficulty in specifying the nature and
extent of services to be performed for each customer
customer may be an integral part of the production system
Absence of finished-goods inventories as a buffer between system capacity and customer demand
19
Preemptive TacticsPreemptive Tactics
There may be ways to manage the extremes of demand:
Discount prices during the valleys.... have a sale Peak-load pricing during the highs .... electric
utilities, Nucor
20
Master Production Scheduling (MPS)
21
Objectives of MPSObjectives of MPS
Determine the quantity and timing of completion of end items over a short-range planning horizon.
Schedule end items (finished goods and parts shipped as end items) to be completed promptly and when promised to the customer.
Avoid overloading or underloading the production facility so that production capacity is efficiently utilized and low production costs result.
22
The rules for scheduling
No Change+/- 5%
Change
+/- 10%
Change
+/- 20%
Change
+/- 20%
ChangeFrozen
Firm
FullOpen
1-2 weeks
2-4weeks
4-6weeks
6+ weeks
Time FencesTime Fences
23
Time FencesTime Fences
The rules for scheduling: Do not change orders in the frozen zone Do not exceed the agreed on percentage changes
when modifying orders in the other zones Try to level load as much as possible Do not exceed the capacity of the system when
promising orders. If an order must be pulled into level load, pull it
into the earliest possible week without missing the promise.
24
Developing an MPSDeveloping an MPS
Using input information Customer orders (end items quantity, due dates) Forecasts (end items quantity, due dates) Inventory status (balances, planned receipts) Production capacity (output rates, planned
downtime) Schedulers place orders in the earliest available open
slot of the MPS . . . more
25
Developing an MPSDeveloping an MPS
Schedulers must: estimate the total demand for products from all
sources assign orders to production slots make delivery promises to customers, and make the detailed calculations for the MPS
26
Example: Master Production SchedulingExample: Master Production Scheduling
Arizona Instruments produces bar code scanners for consumers and other manufacturers on a produce-to-stock basis. The production planner is developing an MPS for scanners for the next 6 weeks.
The minimum lot size is 1,500 scanners, and the safety stock level is 400 scanners. There are currently 1,120 scanners in inventory. The estimates of demand for scanners in the next 6 weeks are shown on the next slide.
27
Example: Master Production SchedulingExample: Master Production Scheduling
Demand Estimates
CUSTOMERS
BRANCH WAREHOUSES
MARKET RESEARCH
PRODUCTION RESEARCH
500
200
0
10
1
0
50
300
1000
0
0
500
400
2 3 4
200
000
300500
0100
700
65
1000
200
WEEK
28
Example: Master Production SchedulingExample: Master Production Scheduling
Computations
CUSTOMERS
BRANCH WAREHOUSES
MARKET RESEARCH
PRODUCTION RESEARCH
500
200
0
10
1
0
50
300
1000
0
0
500
400
2 3 4
200
000
300500
0100
700
65
1000
200
WEEK
TOTAL DEMAND
BEGINNING INVENTORY
REQUIRED PRODUCTION
ENDING INVENTORY
710
1120
0
410 560
1500
410
1350
1160
1500
900
560
700
1250950460
4601160
150015000
1010 1200
950
29
Example: Master Production SchedulingExample: Master Production Scheduling
MPS for Bar Code Scanners
SCANNER PRODUCTION 0 1500 1500 150015000
1 2 3 4 65
WEEK
30
Rough-Cut Capacity PlanningRough-Cut Capacity Planning
As orders are slotted in the MPS, the effects on the production work centers are checked
Rough cut capacity planning identifies underloading or overloading of capacity
31
Example: Rough-Cut Capacity PlanningExample: Rough-Cut Capacity Planning
Texprint Company makes a line of computer printers on a produce-to-stock basis for other computer manufacturers. Each printer requires an average of 24 labor-hours. The plant uses a backlog of orders to allow a level-capacity aggregate plan. This plan provides a weekly capacity of 5,000 labor-hours.
Texprint’s rough-draft of an MPS for its printers is shown on the next slide. Does enough capacity exist to execute the MPS? If not, what changes do you recommend?
32
Example: Rough-Cut Capacity PlanningExample: Rough-Cut Capacity Planning
Rough-Cut Capacity Analysis
PRODUCTION 100 200 200 280250
1 2 3 4 5
WEEK
TOTAL
1030
LOAD 2400 4800 4800 67206000 24720
CAPACITY 5000 5000 5000 50005000 25000
UNDER or OVER LOAD 2600 200 200 17201000 280
33
Example: Rough-Cut Capacity PlanningExample: Rough-Cut Capacity Planning
Rough-Cut Capacity Analysis The plant is underloaded in the first 3 weeks
(primarily week 1) and it is overloaded in the last 2 weeks of the schedule.
Some of the production scheduled for week 4 and 5 should be moved to week 1.
34
Demand ManagementDemand Management
Review customer orders and promise shipment of orders as close to request date as possible
Update MPS at least weekly.... work with Marketing to understand shifts in demand patterns
Produce to order..... focus on incoming customer orders
Produce to stock ..... focus on maintaining finished goods levels
Planning horizon must be as long as the longest lead time item
35
Types of Production-Planningand Control Systems
36
Types of Production-Planningand Control Systems
Types of Production-Planningand Control Systems
Pond-Draining Systems Push Systems Pull Systems Focusing on Bottlenecks
37
Pond-Draining SystemsPond-Draining Systems
Emphasis on holding inventories (reservoirs) of materials to support production
Little information passes through the system As the level of inventory is drawn down, orders are
placed with the supplying operation to replenish inventory
May lead to excessive inventories and is rather inflexible in its ability to respond to customer needs
38
Push SystemsPush Systems
Use information about customers, suppliers, and production to manage material flows
Flows of materials are planned and controlled by a series of production schedules that state when batches of each particular item should come out of each stage of production
Can result in great reductions of raw-materials inventories and in greater worker and process utilization than pond-draining systems
39
Pull SystemsPull Systems
Look only at the next stage of production and determine what is needed there, and produce only that
Raw materials and parts are pulled from the back of the system toward the front where they become finished goods
Raw-material and in-process inventories approach zero
Successful implementation requires much preparation
40
Focusing on BottlenecksFocusing on Bottlenecks
Bottleneck Operations Impede production because they have less capacity
than upstream or downstream stages Work arrives faster than it can be completed Binding capacity constraints that control the
capacity of the system Optimized Production Technology (OPT) Synchronous Manufacturing
41
Synchronous ManufacturingSynchronous Manufacturing
Operations performance measured by throughput (the rate cash is generated by sales) inventory (money invested in inventory), and operating expenses (money spent in converting
inventory into throughput) . . . more
42
Synchronous ManufacturingSynchronous Manufacturing
System of control based on: drum (bottleneck establishes beat or pace for other
operations) buffer (inventory kept before a bottleneck so it is
never idle), and rope (information sent upstream of the bottleneck
to prevent inventory buildup and to synchronize activities)