Chapter 1. Manufacturing Planningand Control

0. The Context for MPC A.Globalization/Internationalization Even small firms have customers around the world, and many have foreign sources of supply as well, not to mention large firms such as Dell, Solectron, Wal-Mart, etc. B.The Role of the Customer— from mass production to mass customization The need for product and process flexibility (and MPC flexibility) to meet the relentless push for product differentiation, faster response, lower inventory and transaction costs.

0. The Context for MPC C. The Impact of Information Technology ERP systems provide the means for linking functionally disparate, geographically dispersed, and culturally different organizational units into a coherent system. Lean production → Lean organization → Lean enterprise → Lean supply chains

1. MPC System Defined MPC system concerns planning and controlling the manufacturing process (including materials, machines, people, and suppliers). Tasks to perform: Plan capacity requirements and availability Plan for materials to arrive on time, right quantity Ensure utilization of capital equipment Maintain appropriate inventory Schedule production activities… Cost and benefits: like all investments, costs could be high and payoffs could be quite handsome as well.

2. An MPC System Framework The need to match MPC with firm’s layout/ environments: Job shop Cellular manufacturing Flexible manufacturing systems Assembly line Just in time … A 3-phase model: Fig. 1.1

Resource planning Sales and operations planning Demand management Master production scheduling Detailed capacity planning Detailed material planning Material and capacity plans Shop-floor systems Supplier systems Enterprise Resource Planning (ERP) System Front End Engine Back End Manufacturing Planning and Control System

An MPC System Framework Front End Activities and systems for overall direction setting Engine Systems for detailed material and capacity planning Back End MPC execution systems

Choosing a layout type Process (functional) layout Product (line/flow) layout Hybrid (combination) layout (e.g., one work multiple machines (OWMM), group technology/cellular manufacturing (GT/CM), flexible manufacturing systems (FMS) Fixed-position layout Layout selection = f (positioning strategy)

MPC Classification Schema (Fig.1.2) Repetitive Just-in-time MRP Project Number of subparts SecondsMinutesDaysWeeksMonths Time between successive units Flow

MPC Classification Schema Flow (continuous production–chemical plants, food, etc.) Repetitive (longer production cycles– automobiles) Just-in-Time (shorter production cycles–TVs, personal computers) MRP (management of complicated parts product–airplanes) Project (unique, long duration–ships).

MPC Classification Schema Product complexity: number of subparts Process complexity: nature of repetitiveness (time between successive units) What are the two factors in the classification? All MPC systems are not the same. What affects the complexity/design of an MPC? Product and process complexity. e.g., in flow type of production, materials management is simple.

3. Evolution of MPC Systems Evolution of competitive priority/strategy: cost, quality, time, flexibility The MPC system must adapt to meet changing company needs Periodic MPC system audits compare system responses to the requirements of the marketplace

Concluding Principles The framework for the MPC is general, and all 3 phases must be performed, but specific applications must reflect particular firm conditions and objectives. In supply chain environments, the MPC must coordinate the planning and control efforts. MPC systems should support the strategy and tactics pursued by the company. Different manufacturing processes dictate the need for different MPC designs.

Concluding Principles 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. An 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.

Quiz – Chapter 1 In the MPC process, capacity decisions (equipment, facilities, suppliers, etc.) are most likely to occur in what time horizon? In the MPC process, detailed scheduling decisions are most likely to occur in what time horizon? Master Production Scheduling (MPS) and Resource Planning are a part of which MPC phase? Measurement and Control are a part of which MPC phase? Products that are part of a one-time production process (e.g. bridges or aircraft carriers) would most likely use which form of MPC?