Exam 1 Flashcards
A good planning system must answer four questions…
- what are we going to make or provide to customers?
- What does it take to make it?
- What do we have?
- What do we need?
Priority?
relates to what products are needed, how many are needed, and when they are needed.
- Marketplace establishes priority.
- Manufacturing is responsible for devising plans to satisfy the market demand if possible.
Capacity
the capability of manufacturing to produce goods and services.
- Depends on the resources of the company.
- In the short term, capacity is the quantity of work that labor and equipment can perform in a given period.
Five major levels of the manuf. planning and control system?
Strategic business plan
Production Plan (sales and operation plan)
Master production plan
Material requirements plan
Purchasing and production activity control
Order Winners (OW)
- Provide competitive advantage
- Different in different markets
- Change over time
- Those characteristics that persuade customers to select a product or service.
Order Qualifiers (OQ)
- Allow organization to compete in the marketplace
- Does not actually help with orders/sales
- Ex: Car Warranty
- Customer requirements for price, quantity, and delivery.
“Todays order winners are tomorrow’s Qualifiers”
You got it
Engineer to order (ETO)
Design>Purchase>Manufacture> Assemble>Ship
———————————————————————–(LT)
Make to order (MTO)
Inventory>Manufacture>Assemble>Ship
——————————————(LT)
Assemble to Order(ATO)
Manufacture>Inventory>Assemble>Ship
———————-(LT)
Make to stock(MTS)
Manufacture>Assemble>Inventory>Ship
——(LT)
ETO
- Manufacturer does not start until order is received
- Long Lead time
- Unique/Custom Products
MTO
- Manufacturer does not start until order is received
- Uses standard components
- Little design time
- Inventory held as raw materials
ATO
- Manufacturer inventories standard components
- No design time
- Only assembly
- Shorter lead time/Inventory held as raw materials
MTS
- Manufacturers produce the goods in anticipation of customer demand
- Little customer involvement in design
- Shortest lead time
- Inventory held as finished goods
Main objectives for companies in traditional systems?
- Best customer service
- Lowest production costs
- Lowest inventory investment
- Lowest distribution costs
Materials management
- Planning and controlling the flows of materials
- maximize the use of firm resources
- provide the level of required customer service>
- by production planning, implementation and control, and inventory management.
Production Planning
Meet demands in the marketplace, to ensure capacity
- Forecasting
- Master planning
- materials requirements planning
- Capacity planning
Implementation and control
- Putting into action and achieving plans
- Production activity control
- Purchasing
Inventory Management
- To support production (RM) or as a result of production (FG)
- Provides a buffer against differences in demand rules and production rates.
Inputs to Mfg Plan + CS
- Product description
- Process specifications
- Time needed
- Available facilities
5 Quantity required
Enterprise Resource Planning (ERP)
Gives companies the ability to link electronically, sharing large amounts of information.
MPC System
- its a hierarchy
- flows downward
- Richer as it goes down
Resource Planning (Capacity)
Demands lead to resource planning
Demand Management (Priority)
Every level of MPC system must check resource planning + demand management.
Strategic Business plan
- 2-10 years
- Broad direction of the firm
- Low level of detail
- 6 months to a year planning cycle
Production plan or sales and operations planning
- 6-18 months
- Satisfy market demand with available resources
- Low level of detail (Product families or groups)
- Monthly or quarterly planning cycle
Master Production Schedule
- 3-18 months, but LT dependent
- Production of individual end items
- Higher individual end items
- Weekly or monthly planning cycle
Materials Requirement planning
- LT driven = 3-18 months
- Component planning, quantities and when needed
- High level of detail
- Weekly planning cycle
Production Activity control or Shop Floor Control
- 1 day to 1 month
- Implementation and control of flow
- High individual components, work orders, work stations
- Daily planning cycle
Sales and operation planning qualities
- Not static
- Have to review/update
- Cross functional
- High up in org
Product groups or families
Based on similar units of measure or similar manufacturing process.
Capacity
Ability to produce goods+services, in the long term>capacity generally fixed, in the short term> capacity can be altered.
Can be altered by OT, H/F, Extra Shift, Subcontracting
Production planning Strategies
Chase, Level, subcontracting, and Hybrid plans.
Chase
- Production “chases” demand
- Capacity fluctuations can be expensive
- Inventory = 0, inventory investment is low.
- Goods are made when demand occurs and are not stockpiled.
- Costs related to carrying inventory are avoided, which can be very high.
Level
- Level output rate
- Level workforce
- Inventory investment is high
- Capacity fluctuations costs are low
Subcontracting
- Produce at the level of forecasted demand
- Excess demand> buying extra to meet demand or turning away demand+increasing prices
- minimize costs of XS capacity+changes in production levels
- Costs of purchasing > costs to make
- Quantitative (Costs) and Qualitative concerns (workforce, quality, and core competency)
MTS, level output
TPR= total 4cast(Total Demand)+EI-BI
Per production per period= TPR/# of periods
EI=BI+production-demand
MTO
- Backlogs only occurred in MTO
- Backlogs are a pool of customer orders which we haven’t released to the production floor yet.
- (Backlog= Beg.back+forecast(demand)-Prod.)
- Backlog is work that is undone
- Not inventory costs rather backlog costs/concerns
- (Total 4cast+beg. backlog-end backlog)
- (Projected Backlog=beg back log+ 4cast-prodn)
Resource Bill
Shows quantity of critical resources(materials, labor, Bottleneck operations.
Bottleneck
Anything that limits or constraints the output of a system
Master production schedule (MPS)
- Priority plan for MFg.
- Must sum up to Sales and operations
- Timing and sizing of individual end items.
Rough-Cut Capacity Planning (RCCP)
- Measures capacity in MPS
- Resource bills
- What were planning to produce under capacity limit.
- Check for critical items
Critical path
Longest path through Bill of material
VAT
Reflects product structure
MTS=”A”
MTO=”V”
ATO=”T”
MPS and MRP
Are lead time driven
Available to promise (ATP)
Portion of a firms inventory and planned production that is not already committed to a specific customer order
Final assembly schedule (FAS)
Actual build schedule, exact end item definitions. Last possible adjustment to MPS, so do it as late as possible. Any unsold items on the FAS will go into FG inventory.
MPS Quantity (MPS Receipt)
is completed production that is planned to keep projected available > than zero or >some trigger point.(Safety Stock)
Frozen
Only changes from the top MGT are allowed, also a period of stability.
Slushy
Check capacity availability and material availability. Changes are allowed.
Liquid
Any change is possible and every time.
Materials Requirement Planning (MRP)
Schedule of components required at each level of the assembly and when needed. (Based on LT’s)
Objectives:
- Determine requirements
- Keep priorities current
MRP Qualities
- Done by information system
- Need to know where the records come from
- has a “Lumpy Demand”
MRP Options
Net change> Just explode those components for which changes occurred.(Small Part)
Regenerative> explode everything again.(Whole thing)
3 Inputs to MRP
- MPS Start info
- BOM
- Inventory Records
MRP Planning Factors
Lot sizing rules Lead time >SS >scrap >safety LT
Bill of Material (BOM)
Shows all components of parent and the relationship between parent and component.
Usage Quantity
Number of units of a component needed to make one unit of its immediate parent(Not necessarily an end item)
End Item
Finished good for sale
Intermediate item
Both a parent and a component
Subassembly
assembled from components, not transformed
Purchased item
from supplier no components
Part commonality
Degree to which component has more than one immediate part
Dependent demand
MRP, Lean (JIT), DBR (Drum Buffer Rope)
Independent demand
4casting, MPS, Sales and operations, Inventory control systems
Where used report
Identifies all parents of a component, what uses this component.
Pegging report
- Identifies existing demand for a component.
- For corrective action, what orders will be impacted, with supplier not shipping materials on time)
BOM uses:
- Product def.
- Engineering change control, (Products that exist, but are changed)
- Service parts
- Planning
- Order entry/Pricing for end item configurations
- Manufacturing
- Costing
>Direct labor
>Direct material
>Overhead allocation
Planning process
- Exploding and offsetting
- Gross Requirements
- Planned receipts> PR changed to SR after we release the order
Lot sizing rules
Fixed order quantity(FOQ), Periodic order quantity(POQ), Lot for lot (L4L)
Material Planner responsibilities
- Release of planned orders if needed
- Monitoring SR- expediting, delaying, or canceling if needed.
- Firm planned orders- Planned order that cannot be changed by the computer system, only by the material planner. Stability.
MRP exception messages ( action notices)
- Planned order release in action bucket
- SR with wrong due date, too early or too late
- Potential missed due dates of zero level parts.
The five major levels
They go from years to days, and general to detail as they go down.
Sustainability
The capability to continue operations in the long term
Reverse Supply chain
Recycling and reusing material is also a major part of sustainability. Used to retrieve a used product in order to dispose it, claim materials from it, or reuse it in some fashion.
Backlogs
Customer orders received but not yet shipped.
Backorders
Are customer orders that may be past due or due for immediate shipment but cannot because the inventory levels are too low to fill the order.
Resource Planning Questions
- Are the resources available to meet the production plan?
2. If not, how will the difference be reconciled?
Purpose of order winners?
Those characteristics that persuade customers to select a product or service. Provides a competitive advantage.
