Production Planning Hierarchical Production Planning Push vs Pull Control Systems Materials...
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Transcript of Production Planning Hierarchical Production Planning Push vs Pull Control Systems Materials...
Production PlanningProduction Planning
Hierarchical Production Planning
Push vs Pull Control Systems
Materials Requirement Planning (MRP)
Just-in-Time (JIT) and Kanban
Setups
Make-to-Stock vs Make-to-Order
The Big PictureThe Big Picture
To optimize our ROI, it would be nice to do all our marketing and manufacturing planning simultaneously at all levels.
Since this is not possible for humans (or computers) to manage in the lifetime of this universe, we are stuck with some sort of compromise.
Two paths have developed.– Maximize efficiency of manufacturing system and
people will buy cheaper product (Pull).– Maximize customer satisfaction and people will
pay more (Push).
Both paths are tackled at a hierarchical level
The HierarchyThe Hierarchy
Production Planning and Control often follows a hierarchical process:
strategic direction / aggregate planning
tactical planning / detailed control
Corporate Level
Aggregate Planning
Plant Level
Aggregate Planning
Plant-floor Level
Detailed Control
Production Control StrategyProduction Control Strategy
Two basic production control strategies:
when does an operation work?
PUSH PULLanticipate future demand react to current demand
forecast demand andthen produce to meet thatestimated demand
produce to replace thenumber of units withdrawnfrom the buffer
MRPMaterials Requirements
Planning
JIT (Kanban)Just-In-Time
“the right quantities to the right places at the right time”
“the necessary products in the necessary quantities at the necessary time”
The Candy GameThe Candy Game
Candy Set-up– Need volunteers for production planners– Put 3 pieces of candy into a cup between each
person.
Candy Push System – Pass candy 1 piece at a time from inventory on
your right to the buffer on your left as quickly as possible.
– Candy can’t fly all over!!! (Defects!)– 1st person in row pulls from RMI as needed
Candy Pull System– Reset inventories to 3 pieces– Customer pulls candy from last WIP in row.– Each person in the row makes sure their left-
hand buffer has exactly 3 pieces of candy. No more, no less.
– 1st person in row pull from RMI as needed
The Candy Game—QuestionsThe Candy Game—Questions
Discussion:
Which system is easier to operate in?
Which system is easier to for management to detect problems in?
Which system reacts more quickly to changes in demand?
Other comments
Basic MRPBasic MRP
axleset (2)
wheels(2)
axle(1)
body(1)
frame(1)
doors(2)
engine(1)
car
1 day
1 day 1 day 3 days
1 day 3 days 1 day 2 days
ship date 100start dateship datestart dateship datestart dateship datestart dateship datestart dateship datestart dateship datestart dateship datestart date
C
S
W
A
B
F
D
E
-5 -4 -3 -2 -1 0
Basic KanbanBasic Kanban
makewheel
makeaxle
assy.axle set
makeframe
makedoors
assy.body
assy.engine
assy.car
customerdemand
Setups: A Critical FactorSetups: A Critical Factor
Kanban is advantageous for production control…
• Reduces WIP
• Reduces _______________
• Improves quality (shortens detection time)
...but setups are a critical factor for success:
CTA = 1 min/part
10 min setup
B
CTB = 2 min/part
10 min setup
Assume Run = 20 units
If setup/changeover time = 10 mins
If setup/changeover time = 1 min
A
Process-Customer InterfaceProcess-Customer Interface
The Process-Customer interface typically follows one of two patterns:
• make-to-stock (MTS)
Customers buy from an FGI
No customization
• make-to-order (MTO)
Factory builds product to customer order
Usually customized
What crucial factors must be considered when designing this interface?
Production Planning for MTSProduction Planning for MTS
For the vast majority of consumer goods, the Process-Customer interface is MTS.
This has certain ramifications:
But, customers may not be as satisfied.
Under what conditions can MRP planning be eliminated a pure Kanban system?
The TradeoffsThe Tradeoffs
Different production control strategies are appropriate under different conditions...
When might you choose PUSH vs PULL?
PUSH PULL
Pragmatic RevolutionPragmatic Revolution
Like all good revolutions, just-in-time manufacturing is producing revolutionaries who don’t know when to stop. It is also producing overreactions from people determined to make them stop...
- Uday Karmarkar
The mainstream press portrays a mutually exclusive choice between light and dark.
push pullvs
all that is evil and dark...
all that is good and pure...
This is patently silly! Both approaches have strengths
• push - good with lumpy demand
• pull - lower inventory, simple management
The MessageThe Message
The production system appropriate for your firm depends on your customers’ needs and is unlikely to completely follow any prescribed pattern, be it MRP, Lean Production, Theory of Constraints, or anything else.
Beware of consultants with the silver bullet.