Production Planning Systems

Production and Norman Gaither Operations Management Greg Frazier Slides Prepared by John Loucks  1999 South-Wester...

1 downloads 174 Views 9MB Size
Production

and

Norman Gaither

Operations Management Greg Frazier

Slides Prepared by John Loucks

 1999 South-Western College Publishing

0

Chapter 9 Production-Planning Systems: Aggregate Planning and Master Production Scheduling

1

Overview  

  

Production-Planning Hierarchy Aggregate Planning Master Production Scheduling Types of Production-Planning and Control Systems Wrap-Up: What World-Class Producers Do

2

Production Planning Hierarchy Long-Range Capacity Planning

Chapter 7

Aggregate Planning Master Production Scheduling

Chapter 9

Production Planning and Control Systems Pond Draining Systems

Push Systems

Pull Systems

Focusing on Bottlenecks

Chapter 10

Chapter 11

Chapter 14

Chapter 9,12

3

Production Planning Horizons Long-Range Capacity Planning

Long-Range (years)

Aggregate Planning

Medium-Range (6-18 months)

Master Production Scheduling

Short-Range (weeks)

Production Planning and Control Systems

Very-Short-Range (hours - days)

Pond Draining Systems

Push Systems

Pull Systems

Focusing on Bottlenecks 4

Production Planning: Units of Measure Long-Range Capacity Planning

Entire Product Line

Aggregate Planning

Product Family

Master Production Scheduling

Specific Product Model

Production Planning and Control Systems

Labor, Materials, Machines

Pond Draining Systems

Push Systems

Pull Systems

Focusing on Bottlenecks 5

Aggregate Planning

6

Why Aggregate Planning Is Necessary 







Fully load facilities and minimize overloading and underloading Make sure enough capacity available to satisfy expected demand Plan for the orderly and systematic change of production capacity to meet the peaks and valleys of expected customer demand Get the most output for the amount of resources available 7

Inputs 





A forecast of aggregate demand covering the selected planning horizon (6-18 months) The alternative means available to adjust short- to medium-term capacity, to what extent each alternative could impact capacity and the related costs The current status of the system in terms of workforce level, inventory level and production rate

8

Outputs 

A production plan: aggregate decisions for each period in the planning horizon about workforce level inventory level production rate Projected costs if the production plan was implemented 







9

Medium-Term Capacity Adjustments 

Workforce level Hire or layoff full-time workers Hire or layoff part-time workers Hire or layoff contract workers Utilization of the work force Overtime Idle time (undertime) Reduce hours worked . . . more 















1 0

Medium-Term Capacity Adjustments 

Inventory level Finished goods inventory Backorders/lost sales Subcontract 





1 1

Approaches  

Informal or Trial-and-Error Approach Mathematically Optimal Approaches Linear Programming Linear Decision Rules Computer Search Heuristics 







1 2

Pure Strategies for the Informal Approach  

Matching Demand Level Capacity Buffering with inventory Buffering with backlog Buffering with overtime or subcontracting 





1 3

Matching Demand Strategy 

  

Capacity (Production) in each time period is varied to exactly match the forecasted aggregate demand in that time period Capacity is varied by changing the workforce level Finished-goods inventories are minimal Labor and materials costs tend to be high due to the frequent changes

1 4

Developing and Evaluating the Matching Production Plan 





Production rate is dictated by the forecasted aggregate demand Convert the forecasted aggregate demand into the required workforce level using production time information The primary costs of this strategy are the costs of changing workforce levels from period to period, i.e., hirings and layoffs

1 5

Level Capacity Strategy 



Capacity (production rate) is held level (constant) over the planning horizon The difference between the constant production rate and the demand rate is made up (buffered) by inventory, backlog, overtime, part-time labor and/or subcontracting

1 6

Developing and Evaluating the Level Production Plan 





Assume that the amount produced each period is constant, no hirings or layoffs The gap between the amount planned to be produced and the forecasted demand is filled with either inventory or backorders, i.e., no overtime, no idle time, no subcontracting . . . more

1 7

Developing and Evaluating the Level Production Plan 



The primary costs of this strategy are inventory carrying and backlogging costs Period-ending inventories or backlogs are determined using the inventory balance equation:

EIt = EIt-1 + (Pt - Dt )

1 8

Aggregate Plans for Services 



For standardized services, aggregate planning may be simpler than in systems that produce products For customized services, there may be difficulty in specifying the nature and extent of services to be performed for each customer customer may be an integral part of the production system Absence of finished-goods inventories as a buffer between system capacity and customer demand 





1 9

Preemptive Tactics 

There may be ways to manage the extremes of demand: Discount prices during the valleys.... have a sale Peak-load pricing during the highs .... electric utilities, Nucor 



2 0

Master Production Scheduling (MPS)

2 1

Objectives of MPS 





Determine the quantity and timing of completion of end items over a short-range planning horizon. Schedule end items (finished goods and parts shipped as end items) to be completed promptly and when promised to the customer. Avoid overloading or underloading the production facility so that production capacity is efficiently utilized and low production costs result.

2 2

Time Fences 

The rules for scheduling

1-2 weeks

2-4 weeks

4-6 weeks

6+ weeks

+/- 5%

+/- 10%

+/- 20%

Change

Change

Change

No Change

Frozen

Firm Full Open

2 3

Time Fences 

The rules for scheduling: Do not change orders in the frozen zone Do not exceed the agreed upon percentage changes when modifying orders in the other zones Try to level load as much as possible Do not exceed the capacity of the system when promising orders. If an order must be pulled in to level load, pull it into the earliest possible week without missing the promise. 









2 4

Developing an MPS 

Using input information Customer orders (end items quantity, due dates) Forecasts (end items quantity, due dates) Inventory status (balances, planned receipts) Production capacity (output rates, planned downtime) Schedulers place orders in the earliest available open slot of the MPS . . . more 











2 5

Developing an MPS 

Schedulers must: estimate the total demand for products from all sources assign orders to production slots make delivery promises to customers, and make the detailed calculations for the MPS As orders are slotted in the MPS, the effects on the production work centers are checked Rough cut planning - identify underloading or overloading of capacity 











2 6

Demand Management 









Review customer orders and promise shipment of orders as close to request date as possible Update MPS at least weekly.... work with Marketing to understand shifts in demand patterns Produce to order..... focus on incoming customer orders Produce to stock ..... focus on maintaining finished goods levels Planning horizon must be as long as the longest lead time item 2 7

Types of Production-Planning and Control Systems

2 8

Types of Production-Planning and Control Systems  

 

Pond-Draining Systems Push Systems Pull Systems Focusing on Bottlenecks

2 9

Pond-Draining Systems [Chapter 10] 

 



Emphasis on holding inventories (reservoirs) of materials to support production Little information passes through the system As the level of inventory is drawn down, orders are placed with the supplying operation to replenish inventory May lead to excessive inventories and is rather inflexible in its ability to respond to customer needs

3 0

Push Systems [Chapter 11] 





Use information about customers, suppliers, and production to manage material flows Flows of materials are planned and controlled by a series of production schedules that state when batches of each particular item should come out of each stage of production Can result in great reductions of raw-materials inventories and in greater worker and process utilization than pond-draining systems

3 1

Pull Systems [Chapter 14] 







Look only at the next stage of production and determine what is needed there, and produce only that Raw materials and parts are pulled from the back of the system toward the front where they become finished goods Raw-material and in-process inventories approach zero Successful implementation requires much preparation

3 2

Focusing on Bottlenecks 

Bottleneck Operations Impede production because they have less capacity than upstream or downstream stages Work arrives faster than it can be completed Binding capacity constraints that control the capacity of the system Optimized Production Technology (OPT) Synchronous Manufacturing 





 

3 3

Synchronous Manufacturing 

Operations performance measured by throughput (the rate cash is generated by sales) inventory (money invested in inventory), and operating expenses (money spent in converting inventory into throughput) . . . more 







3 4

Synchronous Manufacturing 

System of control based on: drum (bottleneck establishes beat or pace for other operations) buffer (inventory kept before a bottleneck so it is never idle), and rope (information sent upstream of the bottleneck to prevent inventory buildup and to synchronize activities) 





3 5

Wrap-Up: World-Class Practice 





Push systems dominate and can be applied to almost any type of production Pull systems are growing in use. Most often applied in repetitive manufacturing Few companies focusing on bottlenecks to plan and control production.

3 6

End of Chapter 9

3 7