1 Chapter 1 Vollmann, Berry, Whybark & Jacobs Manufacturing Planning and Control Vollman/Berry/Whybark/Jacobs: Manufacturing Planning and Control for Supply Chain Management, 5/e (2005)Chapter 1Vollmann, Berry, Whybark & Jacobs
2 DefinitionA Manufacturing Planning and Control system is a methodology designed to manage efficiently the flow of material,the utilization of people and equipment,and to respond to customer requirementsby utilizing the capacity of our suppliers, that of our internal facilities, and in some cases that of our customers to meet customer demand.
3 A Context for Thinking about Manufacturing Planning and Control (MPC) What are processes?Processes define how we do things!Step 1 Step 2 Step 3 etc.So, what is the role of MPC?The MPC system tells the processeswhat to work on.Plans the resources that processesuse (i.e. people, equipment, material).Plans for what processes will be doing inthe future.
4 Definition Plan the use of people Mfg Planning and Control System Efficient useof our capacityand that of oursuppliers.Possibly evenour customers.Manage theefficient flow ofmaterialsDriven by customerdemand and otherCustomer requirementsERP Companies – The Big Three (SAP, Oracle, Microsoft).Professional Organizations – APICS, ISM, NAPMOften part of a company’s ERP system.
5 Agenda What influences the MPC system design? What are the typical support activities? (LT, MT, ST)Performance indicatorsMPC Framework (FE, E, BE)Matching MPC system with NeedsClassification SchemaEvolution & Responses
6 Key Areas of Influence on MPC system design Degree of InternationalizationSempre più elevato per la spinta ad esternalizzare il processo di produzione e concentrarsi su progettazione e mercato. Nike. Macintosh. Dell (cfr. Chase).Role of the customer in the systemVariabilità della dimensione e tipologia della domanda che richiede flessibilità produttiva ottenuta abbassando scorte, tempi di risposta e costo delle transazioni nel sistema informativo con SC molto diversificate e sparseIncreasing use of Information Technology.Necessario per supportare Lean SC con dati e procedure comuni per unità organizzative funzionalmente, geograficamente e culturalmente disparate e differenti
7 Typical Support Activities Long TermIntermediate Term andShort Term.
8 Long Term (Piano di Produzione=>MPS) The system is responsible for providing information to make decisions on (cfr. Variabili strategiche, p.13 Seminario)):The appropriate amount of capacity (intende quantità per ogni tipo di capacità produttive) - including supplier capacity - to meet the market demands of the future.Provide the appropriate mix of human resource capabilities (profili tecnici e/o professionali), technology, and geographic locations.
9 Intermediate TermThe fundamental issue is matching supply and demand in terms of both volume and product mix.Planning for the right logistics.Providing customers with information on correct quantities and location to meet market needs.Planning of capacity to determine employment levels, budgets, overtime and subcontracting needs, etc.
10 Short TermThere is a need for detailed scheduling of resources to meet production requirements.Involves time, people, material, equipment and facilities.Involves people working on the right things.Involves tracking the use of resources and execution results.Provide problem-solving support.
11 Performance Indicators Output resultsEquipment utilizationCost associated with different departments, products, labor utilization, and project conditions.Measures of customer satisfaction such as late deliveries, product returns, quantity and quality errors.
12 Costs and Benefits of MPC systems The costs of an MPC are substantial but so can be theRewards (see examples).Common to see ERP system costs measured at 5-10% of cost of goods sold.
13 An MPC System Framework Front End (cfr. p.14 e segg. del Seminario)Set of activities and systems for overall direction setting (Demand Management, Sales & Operations Planning, Resource Planning and MPS)EngineMaterial Requirements Plans (MRP): Systems for detailed material and capacity planning.Back EndDepicts the MPC execution systems
14 Manufacturing Planning and Control System ResourcePlanningSales and operationsplanningDemandmanagementEnterprise Resource Planning (ERP) SystemMaster productionschedulingFront EndDetailed capacityplanningDetailed materialplanningEngineMaterial Requirements Plans (MRP)Shop-floorsystemsSuppliersystemsBack endManufacturing Planning and Control System
15 Front End Demand Management Sales & Operations Planning Previsione di domanda del cliente finale. Ordini. Rapporti interaziendali. Specifiche su parti di ricambio.Sales & Operations PlanningCoordinamento delle risorse produttive disponibili per rispondere ai piani di vendita (sales/marketing planes).Resource PlanningPrevisione delle risorse produttive e loro coordinamentoMaster Production Schedule (MPS)Cosa bisogna produrre e in quali tempi
16 Set of activities and systems for overall direction ResourcePlanningSales and operationsplanningDemandmanagementEnterprise Resource Planning (ERP) SystemMaster productionScheduling (MPS)Front EndFront EndSet of activities and systems for overall directionsetting (Demand Management, Sales & Operations Planning, Resource Planning and MPS)Detailed capacityplanningDetailed materialplanningEngineMaterial andcapacity plansShop-floorsystemsSuppliersystemsBack endManufacturing Planning and Control System
17 Engine Detailed Capacity Planning (DCP) Determina in dettaglio quali risorse produttive (persone, macchine, …) occorrono per la produzioneDetailed Material Planning (DMP)Determina in dettaglio quali parti e materie prime occorrono per la produzione in base alla “esplosione” (BOM: Bill Of Materials) dei prodotti finaliMaterial Requirements Plans (MRP):Determina in dettaglio in quali tempi occorrono le parti e le materie prime, in base al coordinamento delle risorse produttive e ai BOM dei prodotti finali
18 Systems for detail material and capacity planning. ResourcePlanningSales and operationsplanningDemandmanagementEngineSystems for detail material and capacity planning.Enterprise Resource Planning (ERP) SystemMaster productionschedulingFront EndDetailed capacityplanningDetailed materialplanningEngineMaterial andcapacity plansShop-floorsystemsSuppliersystemsBack endManufacturing Planning and Control System
19 Back End (execution systems) Supplier systemsCoordinamento tempi e quantità delle parti e delle materie prime con I fornitoriShop-floor systemsCoordinamento e scheduling dettagliato delle operazioni per le attività produttive
20 MPC execution systems – Track progress and collect data. ResourcePlanningSales and operationsplanningDemandmanagementEnterprise Resource Planning (ERP) SystemMaster productionschedulingFront EndBack EndMPC execution systems – Track progress and collect data.Detailed capacityplanningDetailed materialplanningEngineMaterial andcapacity plansShop-floorsystemsSuppliersystemsBack endManufacturing Planning and Control System
21 Matching MPC System with the Firm needs (A DYNAMIC PROCESS) As competitive conditions, customer expectations, supplier capabilities, and internal needs change the MPC should change. Di conseguenza anche l’importanza relativa dei vari moduli dell’MPC cambia nel tempo.The trend is towards on-line data access and systems (principale cambio tecnologico: intra e inter unità organizzative).Physical changes influenzano l’MPC:Outsourcing mfg (manufacturing).Hollowing (ricercando) out of corporation (?), etc.Providing information at the level where decision are made, in appropriate time and frames, directly from the shop floorFirms competing in product variety strength MPS and DMPFirms competing on delivery speed need to improve execution.
22 MPC Classification Schema (enfasi degli approcci dell’MPC a seconda della complessità, cioè numerosità dei componenti, e cadenza dei prodotti)Da destra a sinistra diminuiscono: tempi dei cicli e di risposta, immagazzinato e similiNumber of SubpartsProjectManagmentMRPJust-in-timeRepetitive(Beni discreti)Flow(quantità)SecondsMinutesDaysWeeksMonthsTime between successive units
23 MPC Classification Schema Flow (chemical plants, food, etc.)Number of SubpartsProjectMRPJust-in-timeRepetitiveFlowSecondsMinutesDaysWeeksMonthsTime between successive units
24 MPC Classification Schema Repetitive Mfg. (automobiles, high volume consumer products (i.e. TVs)Number of SubpartsProjectMRPJust-in-timeRepetitiveFlowSecondsMinutesDaysWeeksMonthsTime between successive units
25 MPC Classification Schema Just-in-Time systems (feedback management for shorter life cycle products – e.g. fashion items). Focus on minimizing inventory in the supply chain.Number of SubpartsProjectMRPJust-in-timeRepetitiveFlowSecondsMinutesDaysWeeksMonthsTime between successive units
26 MPC Classification Schema MRP (feedforward management for management of complicated longer life products, i.e. machines, electronic equipment).Number of SubpartsProjectMRPJust-in-timeRepetitiveFlowSecondsMinutesDaysWeeksMonthsTime between successive units
27 MPC Classification Schema Project (unique; long term), buildings, one of a kind (satellites).Number of SubpartsProjectMRPJust-in-timeRepetitiveFlowSecondsMinutesDaysWeeksMonthsTime between successive units
28 MPC Classification Schema Flow (chemical plants, food, etc.)Repetitive Mfg. (automobiles, watches, personal computers)Just-in-Time systems (shorter production cycles)MRP (management of complicated parts product)Project type (unique; long time).
29 PrinciplesThe framework for the MPC is general and all 3 phases must be performed but specific applications must reflect particular firm conditions and objectives.In SC environments, the MPC must coordinate the planning and control efforts.MPC systems should support the strategy and tactics pursued by the company.
30 PrinciplesDifferent Manufacturing processes dictate the need for different designs of the MPC.The MPC should evolve to meet changing requirements in the market, technology, products, and processes.The MPC should be comprehensive in supporting the management of all manufacturing resources.
31 PrinciplesDifferent Manufacturing processes and Supply Chains need different designs of the MPC. … one size does not fit all.The MPC must evolve to meet changing requirements in the market, technology, products, and processes.Major problem – the conflict between the flexible and changing needs of companies and the inflexibility of ERP systems.
32 My Interest in the Topics Syllabus – Next Class ERP CompaniesSAPOracleMicrosoftMy Interest in the TopicsSyllabus – Next Class
33 PrinciplesAn effective MPC can contribute to competitive performance by lowering costs and providing greater responsiveness to the market.In firms that have an integrated ERP system and database, the MPC system should integrate with and support cross-functional planning through the ERP system.