OTM PRODUCTION PLANNING AND CONTROL Spring 2013

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1 University of Wisconsin-Madison Wisconsin School of Business OTM PRODUCTION PLANNING AND CONTROL Spring 2013 Instructor: Office Phone/Fax: Web site: Class Hours: Office Hours: Steven M. Boeder (phone), (fax), cell (evenings & weekends) 5:30-6:45 p.m., Tuesday & Thursday, 2170 Grainger Grainger Hall, Room After/before class on Tuesdays and Thursdays, or by appointment. Also, please feel free to communicate via at any time! Course Description and Objectives OTM 654 is a course for seniors and graduate students (a core elective for MBA students in the Operations and Technology Management program, and for undergraduate students specializing in Supply Chain Management) that focuses on the structure, implementation, and management of materials/capacity planning and control systems in manufacturing firms producing and distributing discrete goods. The purpose of the course is to let students get a deeper understanding of the various elements of planning and control that they previously have been exposed to either in an introductory course and/or through industrial experience. A major objective is to develop an understanding of how these elements fit together in an overall framework for enterprise resource planning (ERP) and supply chain management systems. The course is composed of two major parts: (1) Fundamentals of Materials, Capacity and Scheduling activities, and (2) ERP Systems and their Implementation. The first segment covers sales and operations planning, order scheduling, and shop floor control viewed within the framework of Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) systems. Live application of SAP s ERP system will be utilized to demonstrate concepts. We also review pull systems and how these can be combined with MRP/ERP. The second segment looks at large-scale planning and transaction-based systems (i.e., ERP), and their variants, as embodied in commercial software such as SAP. We finally look at these systems role in supply chain management. Course schedule and changes to the schedule are posted on the course website. Required Course Materials Vollmann, T.E., Berry, W.L., Whybark, D.C., and Jacobs, F.R., Manufacturing Planning and Control for Supply Chain Management, (5th ed.), Irwin, Available at UW Bookstore. ISBN Jacobs, F.R. and Whybark, D.C., Why ERP? A Primer on SAP Implementation, McGraw-Hill Higher Education, Available at UW Bookstore. ISBN Two Harvard Business Review Cases (Walton Instruments, Tektronix), HBR website

2 2 Reference Materials (i.e., for your voluntary consultation only) Hopp, W. J., Spearman, M. L., Factory Physics, McGraw-Hill Irwin, Arnold, J.R. T., Chapman, S. N., Clive, L. M., Introduction to Materials Management, Pearson Prentice Hall, Chapman, S. N., The Fundamentals of Production Planning And Control, Pearson Prentice Hall, 2006 Jacobs, F. R., Chase, R. B., Aquilano, N. J., Operations Supply Management, McGraw-Hill Irwin, Jacobs, F. R., Chase, R. B., Operations and Supply Management The Core, McGraw-Hill Irwin, Murray, M., Materials Management with SAP ERP: Functionality and Technical Configuration, SAP Press, Dickersbach, J. T., Keller, G., Production Planning and Control with SAP ERP, SAP Press, Hand-In Assignments You are strongly encouraged to complete all assignments listed on the syllabus. However, not all are required. The hand-in assignments are due on days marked with an asterisk (*). The Association for Operations Management (APICS) You are urged to join the national and local APICS organization and participate in student and professional chapter activities (talk to Professor Urban Wemmerlöv in the Erdman Center, 3525 Grainger Hall). APICS also offers certification exams (CPIM) that are highly favored by employers in the field. You are encouraged to take one or more exams before graduation (this course will help you prepare for some of these)! For more information, see Grading Policy A 100-point scale is used. Some or all exams will be open books, open notes. Two midterms and a final 55% Hand-in assignments 25 SAP Labs 10 Attendance and class participation % Grading Scale A AB B BC C D 59 & below OTM PRODUCTION PLANNING AND CONTROL -- SPRING 2013 Required hand-in assignments are prefaced by hand in and the days for which these assignments are due are marked with an asterisk '*'. On some days practice problems have been suggested. These are prefaced by a do and should not be handed in! NOTE: Answers to do problems are on the course website.

3 3 Topics - Readings - Assignments PART 1 FUNDAMENTALS OF MATERIALS AND CAPACITY MANAGEMENT 1/22 Topic: Overview of course content, structure, and objectives. 1/24 Topic: Factors influencing MPC performance Readings: Mr. Cozzette buys a computer, Manufacturing Planning and Control (Vollmann et al., pp. 1-13). Case: Walton Instruments Manufacturing. Assignment: Prepare the case assignment for class discussion. 1/29 Topic: Review of fundamental features of Material Requirements Planning systems Readings: Materials Requirements Planning (Vollmann et al., pp ). Assignment: Do problems 2 and 3 from Ch 7. 1/31 Topic: MRP systems dynamics and system nervousness Readings: Materials Requirements Planning, continued. * Assignment: Hand in problems 6 and 8 from Ch 7. 2/5 Topic: Demand Planning Readings: Demand Management (Vollmann et al., pp ). Assignment: Do problem 13 from Ch 7. 2/7 Topic: Sales and operations planning (SOP) Readings: Sales and Operations Planning (Vollmann et al., pp ). * Assignment: Hand in problem 14 from Ch 7 (automatic rescheduling is not possible!). Do problem 12 in Ch 7 and problems 13 in Ch 14 [hint: use safety lead time]. You may also try problem 15 from Ch 14 (POQ = period order quantity; with this ordering policy, the lot size equals the sum of the net requirements over a period indicated by POQ; correction: POQ for the shaft in Week 1 should be 42). 2/12 Topic: Master scheduling and order promising Readings: Master Production Scheduling (Vollmann et al., pp ). Assignment: Do problem 11 from Ch 3 and the Aggregate Planning practice problems. 2/14 Topic: DRP Readings: Distribution Resource Planning (Vollmann et al., pp ). * Assignment: Hand in the Aggregate Planning problem (course website). Do problem 4 from Ch 6 (assume LT = 0). 2/19 Topic: Bills of material structuring, master scheduling, and final assembly scheduling Readings: Bills of Material structuring (McLeavey and Narasimhan, pp ). Assignment: Do problems 6, 14, and 10a from Ch 6 (for problem 10a: priorities are recalculated at the beginning of each week; capacity = 35 hours/week).

4 4 Topic - Readings - Assignments 2/21 Topic: SAP Lab 1 SAP Overview and navigating Where: PC Lab (Room 2290) 2/25 Pre-exam review session on a Monday night, 5:30-6:30 pm (room to be announced). 2/26 Topic: Capacity management using planning factors, bills of capacity, and capacity requirements planning Readings: Capacity Planning and Utilization (Vollmann et al., pp /28 FIRST MIDTERM (in class; covers material from 1/22 through 2/21) 3/5 Topic: SAP Lab 2 Product Group-based MRP Planning Where: PC Lab (Room 2290) 3/7 Topic: Capacity management, cont d CRP and I/O Control Readings: Capacity Planning and Utilization (Vollmann et al., pp ). * Assignment: Hand in the Resource Requirements Planning exercise (course website). Do problems 5 and 6 from Ch 10. 3/12 Topic: Shop floor control/operations scheduling Readings: Production Activity Control (Vollmann et al., pp ), Assignment: Do problem 12 from Ch 10. 3/14 Topic: Shop floor control/scheduling, cont'd Readings: Operations Scheduling with respect to Finite Capacity (Wemmerlöv, pp ) * Assignment: Hand in the Forward Scheduling assignment (course website). Do problems 2, 8, and 11 from Ch 11 (for problem 11: use a Gantt chart with one time axis for each work center to load the jobs). Note that Shortest Operation Next rule = SPT. 3/19 Topic: Introduction to Kanban/pull systems Readings: Tying Things Together (Suzaki, pp ) Assignment: none 3/21 Topic: Alternative pull systems; parameter settings Readings: How to Achieve Pull Production (Nicholas, pp ). * Assignment: Hand in the Pull Systems assignment (course website). 3/26 SPRING BREAK!! 3/28 SPRING BREAK!!

5 5 Topic - Readings - Assignments 4/1 Pre-exam review session on Monday night at 5:30-6:30 p.m. (room to be announced). 4/2 Topic: SAP Lab 3 Consumption-Based Planning Where: PC Lab (Room 2294) 4/4 SECOND MIDTERM (in class; covers material from 3/5 through 4/2) PART 2 ERP SYSTEMS AND THEIR IMPLEMENTATION 4/9 Topic: ERP systems Technical aspects of SAP ( Readings: Text - Jacobs and Whybark, pp. vii-ix, and * Assignment: Hand in the ERP book assignment-1 (course website). Be prepared to discuss the assigned pages. 4/11 Topic: ERP systems Readings: Enterprise Resource Planning (ERP)-Integrated Systems (Vollmann et al., pp ), and Enterprise Resource Planning: Common Myths Versus Evolving Reality (Mabert, Soni, and Venkataramanan). Assignment: Do problems 1 and 3 from Chapter 4. 4/16 Topic: ERP systems Focus on implementation and system fit Readings: Text - Jacobs and Whybark, pp * Assignment: Hand in the ERP book assignment-2 (course website). Be prepared to discuss the assigned pages. 4/18 Topic: Enterprise Applications Reading: Enterprise Applications: Building Best-of-Breed Systems (Mabert and Watts, pp ). 4/23 Topic: ERP Implementation Reading: Implementing Enterprise Resource Planning (ERP) Systems in Small and Midsize Manufacturing Firms (Muscatello, Small, and Chen). 4/25 Topic: SAP Lab 4 Where: PC Lab (Room 2290) Readings: Supply Chain Management (Vollmann et al., pp ). 4/30 Topic: ERP implementation Case: Tektronix, Inc.: Global ERP Implementation. * Assignment: Hand in Tektronix assignment (course website) one report per two-person team!

6 6 Topic - Readings - Assignments 5/2 Topic: Supply Chain Management & Value Stream Mapping Readings: Supply Chain Management (Vollmann et al., pp ). * Assignment: Hand in problem 8 from Ch 17. Do problems 1 and 4 from Ch 17. 5/7 Topic: Supply Chain Management & Value Stream Mapping, cont d Readings: Strategy & MPS System Design (Vollmann et al., pp ). 5/9 Topic: Pre-exam review, Course Summary and Wrap-up 5/14 FINAL EXAM (7:25pm 9:25pm) covers material from 4/9 through 5/9; room to be announced ARE YOU READY TO TAKE SOME CPIM CERTIFICATION EXAMS NOW? See

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