Flashcards in BSCM - 3 - Master Planning Deck (52):
Step 1: Total Production = Total Demand + Ending Inventory - Beginning Inventory
Step 2: Production per Period = Total Production/# of periods.
LEVEL PRODUCTION EQUATION
-Translates the strategic business plan into production rates that meet business goals
-Continually updates the production, financial, and sales plan
-Seeks input from various functions.
-Requires regular (ex. monthly) meetings with senior execs to resolve tradeoffs.
-Checks availability of resources to validate the production plan.
-PRODUCT FAMILY LEVEL - not in detail
SALES AND OPERATIONS PLANNING (S & OP)
A process to develop tactical plans based on setting the overall level of manufacturing output and other activities to best satisfy the current planned levels of sales, while meeting general business objectives of profitability, productivity [...] and so on, as expressed in the overall business plan.
PRODUCTION PLANNING (APICS Definition)
-Major output of S & OP
-planning for each product family
-maintaining desired inventory levels
-determining resources required
-comparing load with available resources
Define the purpose and scope of PRODUCTION PLANNING.
"setting the overall levels of manufacturing output..."
"establish production rates..."
-First check of critical resources in MPS process.
-Production plan must be compared with existing resources.
-Determine availability of required resources.
-Reconcile differences through changing resources or altering priorities.
-Validates and plans resource availability for the production plan and for the business plan
-Based on the quantity of a resource required to make one AVERAGE unit of a product family
(also called RESOURCE REQUIREMENTS PLANNING)
ENDING INVENTORY FORMULA
Ending Inventory=Opening Inventory + Production - Demand
-Used for the assembly or configuration of the end item...of which there might be numerous options...when the customer order arrives.
FINAL ASSEMBLY SCHEDULE
The amount of time a plan extends into the future. It is normally set to cover a minimum of cumulative lead time plus time for lot-sizing low-level components and for capacity changes of primary work centers.
-Approximately 12- to 36- month horizon
-A monthly rate
-Demand fluctuates or is seasonal
-Plan is made for Product Families
-Plant and Equipment are usually fixed.
-A variety of management objectives.
TYPICAL PRODUCTION PLANNING SITUATION
-PURCHASING - responsible for executing raw material and component purchases
-PAC - PRODUCTION ACTIVITY & CONTROL - planning, scheduling, and control of operations.
-CAPACITY CONTROL - capacity management process that monitors actual versus planned output and takes corrective action to get back on plan if there is a variance.
EXECUTION PHASE OF MPC
-Inside the demand time fence.
-Demand based on customer orders
-Capacity and materials have been allocated to specific orders.
-EMERGENCY CHANGES ONLY - ripple effects will cause other orders to be late.
-Usually requires senior management approval to break into the schedule
-Extra costs involved to reroute, reschedule, and perform additional setups.
-Between the demand time fence and the planning time fence.
-Demand - both customer orders & forecasts
-Trade-offs are possible.
- Materials have been ordered & some capacity might have been allocated to the assembly of low-level components.
-Planning software will not make the changes.
- Beyond the planning time fence.
- Changes are easy to make as long as they are consistent with the production plan.
- Demand - usually forecasts
- Planning software will make routine changes.
**The planning horizon for master scheduling must extend beyond the planning time fence.
LIQUID TIME ZONE
The uncommitted portion of a company's inventory and planned production, maintained in the master schedule to support customer order promising. The ________ quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled.
ATP (AVAILABLE - TO - PROMISE)
-Process of balancing resources and demand.
-Defines the planning phases of MPC.
PRIORITY & CAPACITY PLANNING
-Relates to supply.
-How much production capacity and other resources are available to meet priorities.
-Relates to demand.
-Refers to what product or component is needed, how much of it is needed, and when it is needed.
The function of determining what material is needed and when. Master Scheduling and MRP are the elements used for the planning and replanning process to maintain proper due dates on required materials.
MANUFACTURING PLANNING & CONTROL
MASTER PRODUCTION SCHEDULE
What are the objectives of Master Scheduling?
- Maintain the desired level of customer service.
- Make the best use of resources.
- Keep inventories at the desired level.
______________ seeks to plan and control the impact of independent demand on material and capacity.
PROJECTED AVAILABLE BALANCE
___________ are usually stated in months, and the ____________ usually is stated in weeks.
PRODUCTION PLANS, MASTER SCHEDULE
What are the 6 inputs to the Master Scheduling Process?
-Forecasts for individual end items
-Orders from customers
-Additional independent demand
The _____________ is a vital link between sales and production.
--It makes valid order promises possible.
--It represents an agreed-upon plan between sales and production.
May be used to balance customer service, inventory, and stable labor force objectives.
HYBRID OR COMBINATION PRODUCTION STRATEGY
What are the advantages and disadvantages of a CHASE STRATEGY?
+ Stable inventory
+ Varied production to meet sales requirements
- costs of hiring, training, overtime, and extra shifts
- costs of layoffs and impact on morale
- possible unavailability of needed work skills
- capacity must match maximum demand
What are the advantages & disadvantages of a LEVEL STRATEGY?
+ Avoids labor and capacity costs of demand matching
+ Avoids changeover costs and lowers the average production cost per item.
- Buildup of inventory
- Requires a very accurate forecast.
What are the advantages and disadvantages of a SUBCONTRACTING STRATEGY?
+ Prevents inventory buildup that occurs with level strategy
+ In repetitive workflow environment,
-avoids excess capacity costs
-reduces the cost of changeovers and workforce adjustments
+ Can be a means of quickly acquiring more capacity.
- Costs of subcontracting (may be higher)
- Proprietary production technology
- Production is at or close to full capacity for at least part of the cycle.
- Production is at a lower rate during the other part of the cycle.
- Production is level during both parts of the cycle.
- Inventory buildup and workforce adjustment costs are less than in the chase strategy.
- Requires an accurate forecast as in the level strategy.
HYBRID STRATEGY CHARACTERISTICS
- Also known as DEMAND MATCHING Strategy
- Production level matches the quantity demanded by period.
- Common in construction, healthcare, and retail.
CHASE PRODUCTION STRATEGY
Production level is equal to the level of the minimum demand and the rest is fulfilled through subcontracting.
SUBCONTRACTING PRODUCTION STRATEGY
Production level is equal to the average demand.
LEVEL PRODUCTION STRATEGY
Describe the 4 steps in developing a Master Schedule.
1. Create a preliminary master schedule for each item with demand.
2. Aggregate the master schedules for all end items.
3. Perform RCCP.
4. Resolve differences and publish the MPS.
System used by manufacturing to:
-Recognize the demand for products
-Plan the resources required to produce them.
-Execute and control production.
Validates the production plan using resource planning.
MPC - MANUFACTURING PRODUCTION & CONTROL
-Validates the priority plans developed at the master scheduling and MRP levels against capacity available at those levels.
-CLOSED-LOOP SYSTEM...a.k.a. plans are continually adjusted to account for internal and external events that occur before/during production
MPC - MANUFACTURING PRODUCTION & CONTROL
-S&OP (sales and operations planning)
--->which produces the PRODUCTION PLAN
--->which produces the MPS (Master Production Schedule ) - priority plan consisting of due dates for production of end items.
--->major input to MRP - priority planning at the component level
-an anticipated build schedule for end items.
-based on end-item demand: forecasts & customer orders
-tied to the production plan to make sure the MPS (priority plan) is realistic and achievable
-based on forecasts & customer orders adjusted for available inventory & safety stock requirements
-responsive to changes in demand, material shortages, & production problems.
-It is therefore...
-a plan for what MFG can make and sales can sell
-subject to the availability of resources
MPS - MASTER PRODUCTION SCHEDULE
-TIME-PHASE PRIORITY PLANNING
-gross, net, offset, and explode requirements
-create planned orders
-keep priorities current
-provide exception messages
-provide action messages
MRP SOFTWARE APPLICATIONS
Created by planning software when it encounters net requirements.
The net requirement generates planned order receipts in the system, and planned order releases appear in a prior period based on the lead-time offset.
A tool that enables the planner to override the MRP logic. Allows planners to allow extra lead time, etc. due to temporary quality problems and so on.
FIRM PLANNED ORDER
-Planner Responsibility, aided by action messages from the MRP system.
-Becomes an OPEN ORDER to the factory or supplier
-Appears as a scheduled receipt.
-Under the control of the planner and is subject to expediting, de-expediting, change in order quantities, and even cancellation.
List the 4 events involved in releasing planned orders.
1. Releasing a planned order.
2. Scheduling a receipt.
3. Creating an open order.
4. Allocating components to the order.
An OPEN ORDER Authorizes...
-PURCHASING - to buy the necessary material.
-MANUFACTURING - to make the component.
-Releasing planned orders.
-General responsibility of managing the current priority plan (planned orders, open orders, end-item due dates.)
-Deals with numerous events that might affect priorities.
RESPONSIBILITIES OF THE PLANNER
-Maintain the priority plan by taking actions to maintain the scheduled due dates for the production of components or the end-item. These would include expediting or de-expediting.
-Replan the due date if an event does not enable maintaining the due date.
SETS OF ACTIONS AVAILABLE TO THE PLANNER
Name examples of EXTERNAL events that might affect order priorities.
-Changes to customer orders
-Late deliveries and lower than required order quantities from suppliers
Name examples of INTERNAL events that might affect order priorities.
-Lower yields or higher scrap factors than planned.
-Late or early open order completions
-Capacity or resource constraints.
-Material shortages caused by inventory record inaccuracies that hide shortages/surpluses.
-Link (dis-aggregate) the production plan at the product family level to the end-item level.
-Create the priority plan (due dates and quantities) for end item manufacturing.
-Basis for calculating the RCCP (rough-cut capacity plan).
-Drive the materials requirements plan, which takes the priority plan to the component due date and quantity level.
PURPOSE OF MASTER SCHEDULING