PRODUCTION PLANNING & CONTROL AE2036

VELTECH AEROZZ 2008

THIS IS FOR YOUR REFERENCE ONLY

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I hope you can understand what is ppc and its fundamentals form this slides.

This is collections of web based ppt’s and book. Refer our college study material also.

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The need for Production Planning Demand Forecasting Aggregate Production Planning Strategies of Aggregate Planning Scheduling Workforce Planning Materials Requirement Planning Capacity Planning Production Control Shop-Floor Control

Topics to be covered

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Addresses decisions on

Acquisition Utilization Allocation of limited production resources

Resources include the production facilities, labor and materials. Constraints include the availability of resources, delivery times for the products and management policies.

The need for Production Planning

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The need for Production Planning

Main objective is to take appropriate decisions.

Typical decisions

Work force level Production lot sizes Assignment of overtime Sequencing of production runs

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The need for Production Planning

Process Planning

Scheduling

Loading

Combining Functions

Dispatching

Follow – up

Corrective Action

Re-planning

Functions of PPC

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Objective

To predict demand for planning purposes

Laws of Forecasting

Forecasts are always wrong Forecasts always change The further into the future, the less reliable

the Forecast will be

Demand Forecasting

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Demand Forecasting

Qualitative Demand Forecasting

Prediction Market Delphi Technique Game Theory Intentions and Expectations Surveys Conjoint Analysis

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Demand Forecasting

Quantitative Demand Forecasting

Discrete Event Simulation Quantitative Analogies Neural Networks Data Mining Causal Models Segmentation

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Aggregate Production Planning

Objective

To generate a medium-term production plan To establish rough product mix To anticipates bottlenecks To align capacity and workforce plans.

It is usually done for next 2 to12 months.

Demand changes over a period of time at a faster rate than the resources. Aggregate planning offers strategies to absorb these fluctuations.

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Aggregate Production Planning

Guidelines for Aggregate Planning

Determine demand for each period Consider company policies that may have

impact Determine capacities for each period Regular time, overtime, subcontracting, etc. Identify backorder or inventory amount Determine costs of operation Continue through time horizon to calculate

total cost Develop alternate plans and compute cost

for each Select the plan that meets objectives

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Aggregate Production Planning

Assumptions in Aggregate Planning

The regular output capacity is the same in all periods. Cost is a linear function composed of unit

cost and number of units. Plans are feasible : sufficient inventory

capacity exists to accommodate a plan,

subcontractors with appropriate quality and capacity are

standing by, and changes in output can be made as

needed.

Contd…

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Aggregate Production Planning

Assumptions in Aggregate Planning

All costs associated with a decision option can be

represented by a lump sum or by unit cost that are

independent of the quantity involved Cost figures can be reasonably estimated

and are constant for the planning horizon Inventories are built up and drawn down at a uniform rate and output occurs at a uniform

rate throughout each period

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Aggregate Production Planning

Output of Aggregate Planning

Production quantity from regular time, overtime

and subcontracted time Inventory held for determination of how

much warehouse space and working capital is

needed Backlog or stock-out quantity for

determining the customer service levels

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Level plans

Use a constant workforce & produce similar quantities each time periodUse inventories and backorders to absorb demand peaks & valleys

Chase plans

Minimize finished good inventories by trying to keep pace with demand fluctuations

Strategies in Aggregate Planning

Strategies in Aggregate Planning

ProductionDemand

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Unit

s

Time

Level plans

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Strategies in Aggregate PlanningU

nit

s

Time

Series1

ProductionDemand

Chase plans

Series1

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Strategies in Aggregate Planning

Hybrid or Mixed Strategies

Build-up inventory ahead of rising demand and use backorders to level extreme peaksLayoff or furlough workers during lullsSubcontract production or hire temporary workers to cover short-term peaksReassign workers to preventive maintenance during lullsInfluencing Demand

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Concerned with timetable of production

Scheduling arranges the different manufacturing operations in order of priority, fixing the time & date for the commencement & completion of each operation.

Types of scheduling

Forward scheduling Backward scheduling

Scheduling

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Scheduling

The pattern of scheduling differs from one job to another which is explained as below.

Master ScheduleProduction ScheduleManufacturing ScheduleScheduling of Job Order Manufacturing

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Workforce Planning

To find out and direct

Right peopleRight placeRight timeRight price

Workforce Planning

Issues

Basic Staffing Calculations and labor hoursWorking EnvironmentFlexibility/AgilityQuality

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Materials Requirement Planning

MRP is a production planning and inventory control system used to manage manufacturing processes.

An MRP system has 3 major objectives

Ensure materials are available for production and products are available for delivery to customersMaintain the lowest possible level of inventoryPlan manufacturing activities, delivery schedules and purchasing activities

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Materials Requirement Planning

MRP steps

Takes output from the planning phase (master plan)Combines that with the information from the inventory record and product structure recordsDetermines a schedule of timing and quantities for each item

The basic idea is to get the right materials to the right place at the right time.

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Materials Requirement Planning

•Master plan

•MRP•Capacity Req. plan

Materials Requirement Planning

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Capacity Planning

The process of determining the production capacity needed to meet changing demands

Maximum amount of work that an organization is capable of completing in a given period of time

Capacity Planning

Wrong Capacity

Capacity Planning

Classes of capacity planning

Lead strategy Lag strategyMatch strategy

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Capacity Planning

Issues

Stand-alone capacities and congestion effects Capacity StrategyMake-or-BuyFlexibilityScalability and learning curves

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JIT is the technique for reducing inventories and elimination of waste in the production system.

Objectives

To eliminate wasteTo improve qualityTo minimize lead timeTo reduce costsTo improve productivity

Production Control using JIT

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Pull production and kanban

JIT is associated with pull systems.

Toyota was the first developer of kanban system.

Examples

McDonalds'Office Xerox Paper

Production Control using JIT

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Issues

JIT InterdependenciesImplementing IssuesJIT purchasingExpected Outcomes

Production Control using JIT

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Shop floor Control

Objective

To control flow of work through plant and coordinate with other activities (e.g., quality control, preventive maintenance, etc.)

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Shop floor Control

WIPTracking

CapacityFeedback

QualityControl

Material FlowControl

ThroughputTracking

StatusMonitoring

WorkForecasting

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Functions

Gross Capacity Control

Match line to demand by staffing (workers/shifts)Varying length of work week (or work day)Using outside vendors to augment capacity

Shop floor Control

Contd…36

Functions

Bottleneck Planning

Handling of bottlenecksCost of capacity is the keyStable bottlenecks are easier to manage

Span of Control

Physically or logically decompose systemSpan of labor and process management

Shop floor Control

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Issues

Customization

SFC is often the most highly customized activity in a plant.

Information Collection

SFC represents the interface with the actual production processes and is therefore a good place to collect data.

Shop floor Control

Contd…38

Issues

Simplicity

Departures from simple mechanisms must be carefully justified.

Shop floor Control

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“QUEUING THEORY”

Queuing Theory

Queuing theory is the mathematics of waiting lines.

It is extremely useful in predicting and evaluating

system performance.

Queuing theory has been used for operations

research, manufacturing and systems analysis.

Traditional queuing theory problems refer to customers visiting a store, analogous to

requests arriving at a device.

Applications of Queuing Theory

Telecommunications Traffic control Determining the sequence of computer operations Predicting computer performance Health services (e.g.. control of hospital bed assignments) Airport traffic, airline ticket sales Layout of manufacturing systems.

Queuing System

Model processes in which customers arrive. Wait their turn for service. Are serviced and then leave.

input

Server

Queue

output

Characteristics of Queuing Systems

Key elements of queuing systems

• Customer:-- refers to anything that arrives at a facility and requires service, e.g., people, machines, trucks, emails.

• Server:-- refers to any resource that provides the requested service, eg. repairpersons, retrieval machines, runways at airport.

System Customers Server

Reception desk People Receptionist

Hospital Patients Nurses

Airport Airplanes Runway

Road network Cars Traffic light

Grocery Shoppers Checkout station

Computer Jobs CPU, disk, CD

Queuing examples

Components of a Queuing System

Arrival Process

ServersQueue or Waiting Line

Service Process

Exit

Parts of a Waiting Line

Dave’s Car Wash

enter exit

Population ofdirty cars

Arrivalsfrom thegeneral

population …

Queue(waiting line)

Servicefacility

Exit the system

Exit the systemArrivals to the system In the system

Arrival Characteristics•Size of the population•Behavior of arrivals•Statistical distribution of arrivals

Waiting Line Characteristics•Limited vs. unlimited•Queue discipline

Service Characteristics•Service design•Statistical distribution of service

Service system

1. A single service system.

Queue

ArrivalsService facility

Departuresafter service

e.g- Your family dentist’s office, Library counter

Multiple, parallel server, single queue model

Queue

Service facility

Channel 1

Service facility

Channel 2

Service facility

Channel 3

Arrivals Departuresafter service

e.g- Booking at a service station

Multiple, parallel facilities with multiple queues Model

Service station Customers leave

QueuesArrivals

e.g.- Different cash counters in electricity office

Service facilities in a series

Arrivals

Queues

Service station 1 Service station 2

QueuesCustomers leave

Phase 1 Phase 2

e.g.- Cutting, turning, knurling, drilling, grinding, packaging operation of steel

Queuing Models1. Deterministic queuing model2. Probabilistic queuing model

3. Deterministic queuing model

= Mean number of arrivals per time

periodµ = Mean number of units served per

time period

Assumptions

1. If > µ, then waiting line shall be formed and increased indefinitely and service system would fail ultimately

2. If µ, there shall be no waiting line

Probabilistic queuing model

PROBABILITY THAT N CUSTOMERS WILL ARRIVE IN THE SYSTEM IN TIME INTERVAL T IS

Single Channel Model

= Mean number of arrivals per time periodµ = Mean number of units served per time period

Ls = Average number of units (customers) in the system (waiting and being served)

=

Ws = Average time a unit spends in the system (waiting time plus service time)

=

µ –

1µ –

Lq = Average number of units waiting in the queue

=

Wq = Average time a unit spends waiting in the queue

=

p = Utilization factor for the system

=

2

µ(µ – )

µ(µ – )

µ

P0 = Probability of 0 units in the system (that is, the service unit is idle)

= 1 –

Pn > k = Probability of more than k units in the system, where n is the number of units in the system

=

µ

µ

k + 1

Single Channel Model Example

= 2 cars arriving/hour µ = 3 cars serviced/hour

Ls = = = 2 cars in the system on average

Ws = = = 1 hour average waiting time in the system

Lq = = = 1.33 cars waiting in line

2

µ(µ – )

µ –

1µ –

2

3 - 2

1

3 - 2

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3(3 - 2)

= 2 cars arriving/hour, µ = 3 cars serviced/hour

Wq = = = 40 minute average waiting time

p = /µ = 2/3 = 66.6% of time mechanic is busy

µ(µ – )

23(3 - 2)

µ

P0 = 1 - = .33 probability there are 0 cars in the system

Suggestions for Managing Queues

Determine an acceptable waiting time for your customers

Try to divert your customer’s attention when waiting Inform your customers of what to expect Keep employees not serving the customers out of sight Segment customers Train your servers to be friendly

Encourage customers to come during the slack periods

Take a long-term perspective toward getting rid of the queues

Where the Time Goes In a life time, the average person will spend :

SIX MONTHS Waiting at stoplights

EIGHT MONTHS Opening junk mail

ONE YEAR Looking for misplaced 0bjects TWO YEARS Reading E-mail FOUR YEARS Doing housework FIVE YEARS Waiting in line SIX YEARS Eating

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Industries

Classification of Industries

1. Primary industries – cultivate and exploit natural resources Examples: agriculture, mining

2. Secondary industries – convert output of primary industries into products Examples: manufacturing, power generation,

construction

3. Tertiary industries – service sector Examples: banking, education, government, legal

services, retail trade, transportation

Manufacturing Industry Transformation Operations

Machine Processing Assembly

Adding value* Other Operations

Material handlingInspection and testingCoordination and control

Transformation ProcessRawMaterial

Part or Product

PowerToolsMachinesLabour

Scrap or Waste

Processing Operations

Shaping operations Solidification processes Particulate processing Deformation processes Material removal processes

Property-enhancing operations (heat treatments)

Surface processing operations Cleaning and surface treatments Coating and thin-film deposition

Assembly Operations Joining processes

Welding Brazing and soldering Adhesive bonding

Mechanical assembly Threaded fasteners (e.g., bolts and nuts, screws) Rivets Interference fits (e.g., press fitting, shrink fits) Other

Material Handling

Material transport Vehicles, e.g., forklift trucks, AGVs, monorails Conveyors Hoists and cranes

Storage systems Unitizing equipment Automatic identification and data capture

Bar codes RFID Other AIDC

Time Spent in Material Handling

Inspection and Testing

Inspection – conformance to design specifications Inspection for variables - measuring Inspection of attributes – gauging

Testing – observing the product (or part, material, subassembly) during operation

Coordination and Control

Regulation of the individual processing and assembly operations Process control Quality control

Management of plant level activities Production planning and control Quality control

Production Facilities and Layout Facilities organised in the most efficient way to

serve the particular mission of the plant and depends on: Types of products manufactured Production quantity Product variety

Production Quantity (Q)

Number of units of a given part or product produced annually by the plant

Three quantity ranges:1. Low production – 1 to 100 units2. Medium production – 100 to 10,000 units3. High production – 10,000 to millions of units

Product Variety (P)

Number of different product or part designs or types

‘Hard’ product variety – products differ greatly Few common components in an assembly

‘Soft’ product variety – small differences between products Many common components in an assembly

Low Production Quantity (Qlow)

Job shop – makes low quantities of specialized and customized products

Products are typically complex (e.g., specialized machinery, prototypes, space capsules)

Equipment is general purpose Plant layouts:

Fixed position Process layout

Fixed-Position Layout

PROCESS LAYOUT

Medium Production Quantities (Qmed)

1. Batch production – A batch of a given product is produced, and then the facility is changed over to produce another product Changeover takes time – setup time Typical layout – process layout Hard product variety

2. Cellular manufacturing – A mixture of products is made without significant changeover time between products Typical layout – cellular layout Soft product variety

Cellular Layout

High Production (Qhigh)

1. Quantity production – Equipment is dedicated to the manufacture of one product Standard machines tooled for high production

(e.g., stamping presses, molding machines) Typical layout – process layout

2. Flow line production – Multiple workstations arranged in sequence Product requires multiple processing or

assembly steps Product layout is most common

Product Layout

PQ Relationships

Q

P

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P.E.R.T

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Complex projects require a series of activities, some of which must be performedsequentially and others that can be performed in parallel with other activities. Thiscollection of series and parallel tasks can be modeled as a network.

In 1957 the Critical Path Method (CPM) was developed as a network model forproject management. CPM is a deterministic method that uses a fixed time estimatefor each activity. While CPM is easy to understand and use, it does not consider thetime variations that can have a great impact on the completion time of a complexproject.

The Program Evaluation and Review Technique (PERT) is a network model that allowsfor randomness in activity completion times. PERT was developed in the late 1950'sfor the U.S. Navy's Polaris project having thousands of contractors. It has thepotential to reduce both the time and cost required to complete a project.

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The Network Diagram

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In a project, an activity is a task that must be performed and an event is a milestonemarking the completion of one or more activities. Before an activity can begin, all ofits predecessor activities must be completed. Project network models representactivities and milestones by arcs and nodes. PERT originally was an activity on arcnetwork, in which the activities are represented on the lines and milestones on thenodes. Over time, some people began to use PERT as an activity on node network.For this discussion, we will use the original form of activity on arc.The PERT chart may have multiple pages with many sub-tasks. The following is avery simple example of a PERT diagram ABOVE

The milestones generally are numbered so that the ending node of an activity has a higher number than the beginning node. Incrementing the numbers by 10 allows for new ones to be inserted without modifying the numbering of the entire diagram. The activities in the above diagram are labeled with letters along with the expected time required to complete the activity.

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Steps in the PERT Planning ProcessPERT planning involves the following steps:1. Identify the specific activities and milestones.2. Determine the proper sequence of the activities.3. Construct a network diagram.4. Estimate the time required for each activity.5. Determine the critical path.6. Update the PERT chart as the project progresses.

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