Ppc & aggregate planning

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Transcript of Ppc & aggregate planning

  • 1. UNIT III
    • Production Planning & Control (PPC)
  • Aggregate Planning

2. Overview

  • Production-Planning Hierarchy
  • Aggregate Planning
  • Master Production Scheduling
  • Types of Production-Planning and Control Systems
  • Wrap-Up: What World-Class Producers Do

3. Production Planning and Control Introduction

  • Coordination of materials with suppliers
  • Efficient utilization of people and machines
  • Efficient flow of materials
  • Communication with customers


  • Aspects of Production Planning & Control:
  • * Design determines physical form & structure of operations
  • process.
  • * Aim of planning and control to meet customers needs and
  • expectations on continuous basis
  • * Ensures that operational objectives of quality, cost, lead time,
  • adaptability, variability & services are met.
  • * Demand is reconciled with supply, in terms of:
  • - Volume
  • - Quality
  • - Timing

5. Demand vs. Supply

  • 3 Factors To Consider When Reconciling Demand And Supply:
  • * Loading of work center available capacity of the one coffee
  • machine.
  • * Sequence of work;
  • -First come first serve
  • -Earliest due date
  • -Shortest processing time
  • -Other more completed sequencing rules are not covered here
  • * Scheduling of tasks specifies start and completion times for
  • various tasks
  • -Gantt charts are often used

6. Capacity Planning, Aggregate Planning, Master Schedule, and Short-Term Scheduling Capacity Planning 1. Facility Size 2. Equipment Procurement Aggregate Planning 1. Facility Utilization 2. Personnel needs 3. Subcontracting Master Schedule 1. MRP 2. Disaggregation of master plan Short-term Scheduling 1. Work center loading 2. Job sequencing Long-term Intermediate-term Intermediate-term Short-term 7. Production Planning Horizons Master Production SchedulingProduction Planning and Control Systems Pond Draining Systems Aggregate Planning Push SystemsPull Systems Focusing on Bottlenecks Long-Range Capacity Planning Long-Range (years) Medium-Range (6-18 months) Short-Range (weeks) Very-Short-Range (hours - days) 8. Production Planning: Units of Measure Master Production Scheduling Production Planning and Control Systems Pond Draining Systems Aggregate Planning Push SystemsPull Systems Focusing on Bottlenecks Long-Range Capacity Planning EntireProduct Line Product Family Specific Product Model Labor, Materials, Machines 9. Hierarchical Production Planning 5 Annual demand by item and by region Monthly demand for 15 months by product type Monthly demand for 5 months by item Forecasts needed Allocates production among plants Determines seasonal plan by product type Determines monthly item production schedules Decision Process Decision Level Corporate Plant manager Shop superintendent 10. Matching PPC with the Needs of the Firm

  • Number of
  • Subparts
  • SecondsMinutesDaysWeeksMonthsTime between successive units
  • Examples:Oil, food, drugs, watches, TV, trucks, planes, houses, ships

Repetitive Flow Just-in-Time MRP CPM/PERT 11. Matching PPC with the Needs of the Firm

  • Flow-Oriented Manufacturing Systems
  • Very short time between successive units
  • A few components needed
  • Flow rate is the measure
  • Ex: Chemical, food, petroleum

12. Matching PPC with the Needs of the Firm (Contd)

  • 2. Repetitive-Nature Manufacturing Systems
  • Short time between successive units
  • Assemble similar products
  • Flow Rate or Assembly Rate is the measure
  • Ex: Televisions, Radios, Watches, Cars

13. Matching PPC with the Needs of the Firm (Contd)

  • 3. Just-in-Time
  • High production volume
  • Low Product Variety
  • Reduced Inventory and Leadtime
  • Ex: Cars, Computers, Jewelry, Copy Machines

14. Matching PPC with the Needs of the Firm (Contd)

  • 4. Materials Requirements Planning (MRP)
  • Batch production
  • High product variety
  • Low production quantity
  • Ex: Electric Motors, Fans

15. Matching PPC with the Needs of the Firm (Contd)

  • 5. CPM/PERT
  • Long leadtimes
  • Low production quantity
  • Ex: Airplanes, ships

16. Aggregate Planning 17. Why 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

18. Aggregate Planning

  • Goal: Specify the optimal combination of
    • production rate
    • workforce level
    • inventory on hand
  • Product group or broad category (Aggregation)
  • Medium-Range: 6-18 months

6 19. Aggregate 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

20. Preemptive 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

21. Master Production Scheduling (MPS) 22. Objectives 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.

23. Time Fences

  • The rules for scheduling

No Change +/- 5% Change +/-10% Change +/- 20% Change Frozen Firm Full Open 1-2 weeks 2-4 weeks 4-6 weeks 6+weeks 24. Time Fences

  • The rules for scheduling:
    • Do not change orders in the frozen zone
    • Do not exceed the agreed upon 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 in to level load, pull it into the earliest possible week without missing the promise.

25. Developing 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

26. Developing 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
  • As orders are slotted in the MPS, the effects on the production work centers are checked
    • Rough cut planning - identify underloading or overloading of capacity

27. Types of Production-Planning and Control Systems 28. Types of Production-Planning and Control Systems

  • Pond-Draining Systems
  • Push Systems
  • Pull Systems
  • Focusing on Bottlenecks

29. Pond-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 t