3. The need for Production Planning
Demand Forecasting
Aggregate Production Planning
Strategies of Aggregate Planning
Workforce Planning
Materials Requirement Planning
Capacity Planning
Production Control using JIT
Shop-Floor Control
3
4. 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. 4
5. Main objective is to take appropriate decisions.
Typical decisions
Work force level
Production lot sizes
Assignment of overtime
Sequencing of production runs
5
6. Process
Planning
Re-planning Scheduling
Corrective
Functions of
Loading
Action PPC
Combining
Follow – up
Functions
Dispatching
6
8. 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. 8
9. 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
Feb-12 9
10. 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.
Feb-12
Contd…
10
11. 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
11
12. 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
12
13. Level plans
Use a constant workforce & produce similar
quantities each time period
Use inventories and backorders to absorb
demand peaks & valleys
Chase plans
Minimize finished good inventories by trying to keep
pace with demand fluctuations
13
15. Chase plans
Production
Demand
Series1
Series1
Units
Time
15
16. Hybrid or Mixed Strategies
Build-up inventory ahead of rising demand and
use backorders to level extreme peaks
Layoff or furlough workers during lulls
Subcontract production or hire temporary
workers to cover short-term peaks
Reassign workers to preventive maintenance
during lulls
Influencing Demand
16
17. To find out and direct
Right people
Right place
Right time
Right price
17
19. 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 customers
Maintain the lowest possible level of inventory
Plan manufacturing activities, delivery schedules
and purchasing activities
19
20. MRP steps
Takes output from the planning phase (master plan)
Combines that with the information from the
inventory record and product structure records
Determines 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.
20
23. 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
23
27. JIT is the technique for reducing inventories and
elimination of waste in the production system.
Objectives
To eliminate waste
To improve quality
To minimize lead time
To reduce costs
To improve productivity
27
28. Pull production and kanban
JIT is associated with pull systems.
Toyota was the first developer of kanban system.
Examples
McDonalds'
Office Xerox Paper
28
32. 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
Contd…
32
33. Functions
Bottleneck Planning
Handling of bottlenecks
Cost of capacity is the key
Stable bottlenecks are easier to manage
Span of Control
Physically or logically decompose system
Span of labor and process management
33
34. 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. Contd…
34
