Planning and control frame work

Matching MPS with needs of firm

Evolution of MPS system

Manufacturing planning and control
system( MPC)
Apics
A closed loop information system that includes the
planning function of production planning ( sales and
operations planning), master production scheduling ,
materials requirement planning and capacity
requirement planning. Once the plan has accepted as
realistic, execution begins . The execution function
includes input-output control , detailed scheduling ,
dispatching , anticipated delay reports ( Department,
supplier) and supplier scheduling.
Examples: close loop MRP system
MRPII
ROP
Kanban
Objectives of MPC system
1. What are we going to sell

2. What do we need to make

3. What does it take to make

4. What do we have here

5. What do we need to get

Time lag between awareness of an impending event or need
and occurrence of event . The lead-time is a main reason of
forecasting

Purpose of planning is to define resources needed to

produce planned output
Control function compares the planned and immediate need
. Sort out significant and trivial differences and produce
signal to initiate corrective actions which may include
revising plan and or refocusing on execution Strategic
Business

Production RCCP
MPS

CRP
MRP

Priority Capacity
 1 Develop Strategy
Define Mission, Vision, Values
Conduct analysis
Formulate strategy

2
Translate the 5
strategy Test and adapt the strategy
Strategic planConduct profitability analysis
Define objectives and Correlation analysis
Strategy map
theme
Balance Examine emerging strategies
Select measures & Scoreboard
targets
Plan operations 4
3
Improve initiatives
Select key processes Monitor and learn strategies
Develop sales plan Operating planHold strategic review
Plan resources Dash Boards
Prepare budget Budget Hold operational review
Pro forma P & Ls
Business Strategy
Influencing factors
Internal External

Organization Environment

Employees Competitors

Skills and competency Suppliers/ Associatios

Technology employed Technological Development

Resources Customer needs

Strengths and weakness Threats and opportunities

Vinson Mission Values Environmental laws

governing bodies
Products substitutes
Demand Management

• Types of Demands
• Approach to demand planning
• Demand management
Demand supply

Volume mix

Aggregate Detail

How Much? Which One?

Rate Customer order

Product Families Individual Types

Sales and operations MPS

Strategies are have following objectives and goals
Market Share
Profit
Product portfolio
Resource acquisition and development
Capital and finance
Technology
Growth
ROI
Customer service
Brand Image
 products

al Innovative
dity Fasion
MTO ETO ATO

Product Product MPS Product

MPS

MPS
Raw material Raw material Raw material
MTS MTO/ETO ATO
Planning Phase

Planning Hierarchy
Planning Horizon
 Strategic objectives
controller
Feed Back Quality
Speed
Flexibility
Cost
innovation
system
Operations processes
Resources
Manufacture •Products
•Materials
Supply •Services
•Information output
Inputs Service
•Customers •Satisfaction
transport •Profit
•Facilities
•Staff

Accounting marketing
MIS

Feedback sensor
 Feed Forward
Model

•Products sensor
•Services Accounting marketing
•Satisfaction MIS
•Profit
system
controller
Strategic objectives
Operations processes
Resources Quality
Manufacture
•Materials Speed Inputs Supply output
•Information Flexibility
Service
•Customers Cost
transport
•Facilities innovation
•Staff

Feedback
•Plant size
•Shift pattern Business
•Labor requirement planning
•Constraints
Production
Rough cut planning
Capacity
planning Master production
schedule

Feed forward system

MRP
Regenerative

Capacity requirement
planning

No
Modifications Realistic ?

Execute
Capacity plan
Execute
Material plan
 Business plan

Sales Production plan

plan

Rough cut
Customer Capacity planning
ordering Master Production Schedule

Capacity
ATP Requirement plan Routing

Material Requirement Planning

Bill of
Materials
Production
Purchase Order orders

Shop floor control

 ERP ES

Accounts Receivable
Sales forecasting MPS
Accounts Payable
S & OP RCCP
General Lager
APS MRP
Cash Management
Supplier Rating System CRP
CRM
Performance Matrix DRP
HR
BOM
Data Warehousing
Customer .Order
& Promising

ES =Enterprise
Software( System)
ERP =Enterprise Resource
 An enterprise wide set of management tools that balances demand and
Supply.
 Link customer & supplier
 Proven business process for decision making
Planning
1. What are we going to make? Master Schedule
2. What does it take to make it? Bill of Material
3. What do We have? Inventory( Projected Available balance)
4. What do we have to get? Production schedule
 Strategic planning
Demand
Supply
Business planning

F
O Volume C
R Sales & Operation P
E Planning A
C Sales Production C
A Plan plan I
S T
T Y
&
D Mix P
M L
Master schedule
A A
N N
D MRP N
P I
Ln N
G
SFEC
 Functional Innovative

Custom Standard
Custom Standard
Job Shop
Job Shop

Flow Shop Flow Shop

Low volume High volume Low volume High volume
 a organization the goal is long term profitability.
competitive
achieve it start production ahead of customer order.
keep delivery commitment.
ETO

MTO

ATO

MTS
Strategic – Market : Quality ,Delivery speed, reliability Price
Flexibility Differentiation
Tactical - Product
Operational - Production
Strategy
Potential entrants
Suppliers
Buyers
substute
Variability
Demand
Batch
Material handling
Variable routing
Breakdowns
Quality defects
Human amplification
Master Planning Of Resource
 Introduction
 Supply chain Management
Planning
Business Plan

Strategy
Cost leadership
Differentiation
Focus
 External
Suppliers
Market SCM
Innovation Subcontract
Competitors behavior Network flexibility
Seasonality
Customer Mix
Promotion Process and plant
SMED Volume
Supply chain
Technology People
Management
Planning Operating procedure
And control
 r Planning Of Resource
ter plan : Master production plan
mand: Demand 1.Independant , 2.Dependent demand Planning Management
s and operations planning
ribution planning

Planning Hierarchy

Strategic
plan

Business Plan

Tactical-Operations plan
Corporate Body has mission
vision
Values
Demand
Demand planning
Type of demand
Source of demand
Forecasting
Quantitative methods
Moving average
Seasonality
Exponential smoothening
Qualitative methods
Intrinsic & Extrinsic factors
New product introduction
Planning period & time horizon
Distribution planning
Basic model
DRP,DRP II ,CPFR, BOD, JIT
Supply
Product delivery strategy
CRM, SCM
S & OP
Product/ service hierarchy
Resource planning
Bill of resource
Capacity
MPS
Process
Model
Format
Input
Product strategy
BOM
MPS details
Mixed model
Capacity planning
Validating plan
Performance measurement
MRP model
Managing Change
duction Toyota Model
“ Small lot “ production
nimal Inventories
eographic concentration of assembly & part production
ll through “Kanban”
veling
ne orientation
andardization
ka Yoke
ultiskill labour
ut sourcing
lective automation
ntinual improvement
 oduction Honda Model
apid model replacement
requent line expansion
Overlapping and compressed development phases
igh level supplier engineering
eavy weight project managers
esign team & manager continuity
Mass customization
Objectives
Keeping Priorities current
Keeping inventories low
Early warning
Long range planning
 Problem Solution

Production Urban congestion Frequent part deliveries

Long geographic distance EDI
Overseas locations Computerized control
Stress on supplier system
Product variety Attention to supplier needs
Shortage of Blue collar Standardization
workers Design for
manufacturability
Automation
Overseas production

Product development High cost due to frequent

Replacement
High cost of expansion
Environmental & recycling
cost
Product variety
orton
nt cycle begins with articulating company’s strategy

trategy( Management meeting either incrementally or a new strategy is

ness are we in and why?

Variability and utilization-inventory curve
60
5
0
50
Total system inventory

40 Coefficient of
variation

30
1
.8
20
.4
0

10

40 60 80 100
20
Overall average equipment utilization 120
usiness plan
economic forecast based upon plausible assumption
oes it reflect the latest significant events and trends
forecast free of political and theoretical biases?
re data relevant and current?
re regional and microeconomic data included?
Quantities in ,000

2007 2007 2008 2008

First half Second half First half Second half

Product A 230 280 350 390

OE

After 100 150 180 220

Market

Export 50 60 80 100
Quantities in ,000

2007 2007 2008 2008

First half Second half First half Second half

Capacity

Production

Auxiliary
Product introduction
Functional Innovative
Commodity Fashionable
Standard Unique
Product life cycle long Short product life cycle
Portfollio based Value based

Exit
Stay
Volume Volume
Create
Enter
Time
Time
price
Rs/Unit price Rs/Unit
cost
cost
Volu
Volume
me
Aggregate planning
Rational
Economical

Suitable for seasonal pattern

Shared capacity
1. MPS is Manual exercise
2. End item schedule : lot size ,Demand ,Capacity are the
factors considered
3. MRP II Manufacturing Resource Planning
MRP MRP II ERP

Materials Manufacturing Enterprise

Requirement Resource Resource
planning Planning Planning
Diver MPS Driver business Driver Strategic
Plan plan

Material Planning Interface Maps entire supply

Manufacturing chain
Other function
BOM & Time Finance, Production CRM ,SRM etc
phased Quality
plan
Simple system Business Process Business Process
Incremental budgeting Zero base budgeting

Results are static Sub optimal Optimization possible

Focus is on activities

Prior inefficiencies are carried forward

Difficulty in assessing reallocation

impact

Budgeting becomes routine