chapter 12 power point presentation ppt 2240k4845
TRANSCRIPT
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McGraw-Hill/Irwin The McGraw-Hill Companies, Inc. 2007, All Rights Reserved
Facilities and Aggregate
PlanningChapter 1215
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Chapter 12 Outline
Facilities Decisions
Facilities Strategy
Aggregate Planning Definition
Planning Options
Basic Strategies
Aggregate Planning Costs
Example of Costing
Sales and Operations Planning
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Hierarchy of Capacity Decisions
Facilities
decisions
Aggregate
planning
Scheduling
0 6 12 18 24Months
Planning Horizon
Scheduling
Facilities
decisions
Aggregate
Planning
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Definition of Capacity
Capacity is defined as the maximum output that can beproduced over a given period of time.
Primarily determined by Physical assets
Labor availability
Nominal capacity Subtracts downtime, shift breaks, etc.
Is the actual capacity that should be used in planning
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Facilities Decisions
How much total capacity is needed?
How large should each unit of capacity be?
When is the capacity needed?What type of facilities/capacity are needed?
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Factors Affecting FacilitiesStrategy
Predicted demand
Cost of facilities
Likely behavior of competitorsBusiness strategy
International considerations
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How Much?: Strategies forCapacity Cushion
Try not to run out (e.g. utilities)
Build to average forecast
Maximize utilization at bottlenecks
Reduce rejects and rework
Reduce throughput time
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How Large?What is Optimum Unit Size?
Economies of scale
Diseconomies of scale
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When?
Timing of Facility Additions
Preempt the competition
Wait-and-see strategy
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What Type?
Types of Facilities
Product-focused (55%) - computers, chain
saws, dishwashers
Market-focused (30%) - electricity, bakeries
Process-focused (10%) - computer chips
General purpose (5%)several products and
processes.
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Aggregate Planning Characteristics
A time horizon of about 12 months
An aggregatedlevel of demand for one or few
categories of product
The possibility of changing both supply and demand
A variety of management objectives
Facilities that are considered fixed (cannot be
expanded or reduced)
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Planning Options
Options for managing demand.
influencing demand from customers
delivering orders as promisedOptions for managing supply
delivering what is promised
managing capacity & other resources
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Options for Influencing(Managing) Demand
Pricing
Advertising and promotion
Backlog or reservations (shifting demand)
Development of complementary products
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Options for Influencing(managing) Supply
Hiring and layoff of employees
Using overtime and undertime
Using part-time or temporary labor
Carrying inventory
Outsourcing or SubcontractingMaking cooperative arrangements
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Basic Production Strategies
Level strategy (constant work
force, use inventory as buffer)Chase strategy (produce to
demand, vary workforce)
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Level Load Strategy
Deliver products and services at a
constant rate
Avoid making changes to
operations
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Chase Strategy
Produce only what you sell
Produce products or services just-in-time
If there are no salesdo not produce
Typical for services
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Comparison of Chase versus Level
Strategy
Chase Demand Level Capacity
Level of labor skill required Low High
Job discretion Low High
Compensation rate Low HighWorking conditions Sweatshop Pleasant
Training required per employee Low High
Labor turnover High Low
Hire-fire cost High Low
Error rate High LowAmount of supervision required High Low
Type of budgeting and forecasting required Short-run Long-run
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Aggregate Planning Costs
Hiring and firing costs (chase)
Overtime and undertime costs (chase)
Subcontracting costs (chase)
Part-time labor costs (chase)
Inventory-carrying costs (level)Cost of stockout or back order (level)
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Underlying Purpose of S&OP
The underlying purpose of Sales and
Operations Planning is to balance demand
and supply.Monthly time buckets over a rolling 12
month horizon.
Based on families of products
Input into detailed planning and scheduling
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S&OP Outputs
Output Responsibility
Sales plan Marketing and sales
Production plan Manufacturing
Inventory plan (MTS) Management
Backlog plan (MTO) Management
Purchasing plan Purchasing
Financial plan FinanceEngineering plan Engineering
Workforce plan Human resources
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Iterative Nature of S&OP(made possible by concurrent planning)
1. Developproduction plan.
2. Check implications for inventory/backlog plan.
3. If necessary, adjustproduction plan.
4. Check against resource plan and availability.
5. If necessary, adjustproduction plan.
6. Recheck against inventory/backlog andresources.
7. Continue(go to 5) until you meet all constraints.
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Summary
Facilities Decisions
Facilities Strategy
Aggregate Planning Definition
Planning Options
Basic Strategies
Aggregate Planning Costs
Example of Costing
Sales and Operations Planning
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End of Chapter Twelve