Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems

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How Master Production Scheduling (MPS) is tracked and measured.

1 1. Production, Planning and Control (PPC). This module covers: An introduction to Production, Planning and Control. Guidelines on Sales and Operations Planning (S&OP) and Aggregate Planning. Definition of Demand Management and three types of demand forecast techniques. How Master Production Scheduling (MPS) is tracked and measured. An introduction in using the Materials Requirements Planning (MRP) to identify resource risks and mitigate impact on deliverables. 2. The video you are about to see is a narrative by Manufacturing Branch Chief of DCMA Quality Assurance, Mr. Jackson, discussing what Phase 1 of the course means for the students. 1

3. Module 2 s Terminal Learning Objective Module 2 contains 5 lessons: Lesson 1: Introduction to Production, Planning, and Control (PPC) Lesson 2: Sales and Operations Planning (S&OP) and Aggregate

Lesson 1: Introduction to Production, Planning, and Control (PPC). 5. Lesson objectives.

2 3. Module 2 s Terminal Learning Objective Module 2 contains 5 lessons: Lesson 1: Introduction to Production, Planning, and Control (PPC) Lesson 2: Sales and Operations Planning (S&OP) and Aggregate Planning Lesson 3: Demand Management Lesson 4: Master Production Scheduling (MPS) Lesson 5: Introduction to Materials Requirements Planning (MRP) 4. Lesson 1: Introduction to Production, Planning, and Control (PPC). 5. Lesson objectives. Upon completion of this lesson, you should be able to: Contrast the role of PPC systems across strategic, tactical, and operational timeframes. Describe PPC processes and activities across strategic, tactical, and operational timeframes. Differentiate between the different levels of a PPC System. Categorize typical PPC responses to changes in technology, products, processes, or strategy for a given scenario. 2

6. Lesson topics: This lesson will cover the following topics: The PPC System PPC System

Understanding the PPC processes empowers you to evaluate how effectively a company is

Consequently, you will be able to consider the use of PPC processes when determining the

3 6. Lesson topics: This lesson will cover the following topics: The PPC System PPC System Framework PPC Classification System PPC Response to Change 7. Understanding the PPC processes empowers you to evaluate how effectively a company is implementing these practices. Consequently, you will be able to consider the use of PPC processes when determining the likelihood of the company fulfilling its contracts. 8. How does Production, Planning, and Control (PPC) help a manufacturing organization successfully fulfill its contracts?. 9. Topic 1: The PPC System 3

The PPC system is a methodology designed to manage the flow of materials, the utilization of people and equipment (i.e., capacity), and to coordinate suppliers and customers (i.

4 10. Major components of a PPC system framework. The PPC System is made up of the front end, the engine, and the back end. 11. Production Planning and Control (PPC) System. The PPC system is a methodology designed to manage the flow of materials, the utilization of people and equipment (i.e., capacity), and to coordinate suppliers and customers (i.e., supply chain). It also assists with routings, dispatching, and planning. The PPC system provides information to help businesses match supply needs with demand Input. 4

12. The role of PPC in the context of strategic planning: PPC system provides information on: Capacity needed to meet future market demands; this includes: o Machines, equipment, and facilities o

5 12. The role of PPC in the context of strategic planning: PPC system provides information on: Capacity needed to meet future market demands; this includes: o Machines, equipment, and facilities o Human-resource size and capabilities o Technology o Geographic locations Long lead times required to secure capacity, raw materials, and other resources. RELATE the role of PPC in the context of strategic planning to the case study. REFERENCE the Toyota: Demand Chain Management case study introduction (pages 1-2) and the Overseas Planning Cycle (pages 7-8). 5

13. The role of PPC in the context of tactical planning: The PPC system matches supply and demand regarding product mix and volume. Helps in planning appropriate logistical solutions.

Aids in planning capacity to determine employment levels, budgets, overtime, subcontracting needs, etc. RELATE the role of PPC in the context of tactical planning to the case study.

6 13. The role of PPC in the context of tactical planning: The PPC system matches supply and demand regarding product mix and volume. Helps in planning appropriate logistical solutions. Provides customer facing employees with information on correct product quantities and location to meet market needs. Aids in planning capacity to determine employment levels, budgets, overtime, subcontracting needs, etc. RELATE the role of PPC in the context of tactical planning to the case study. REFERENCE the Toyota: Demand Chain Management case study s Domestic Distribution section (pages 2-5) and the Overseas Planning Cycle (pages 7-8). 14. The role of PPC in the context of operational planning: PPC system provides a detailed schedule of resources to meet customer requirements. Schedules time, people, material, equipment and facilities. Ensures personnel are properly tasked. Tracks use of resources and results of execution through the use of appropriate metrics. Supports problem-solving. 6

7 15. File: CMM100_M2_L1_E1_Exercise_FINAL.docx 16. Example for exercise. 17. Instructions 18. Topic 2: PPC System Framework 7

8 19. The four components of the front end of a PPC framework: Front end pieces are considered customer facing. They examine sales and marketing data, information from manufacturing concerning what available capacity is available to handle more customer orders, and how the manufacturing area is being loaded over the time horizon being considered so that marketing and sales don t over sell the business capabilities to meet customer demand. The decisions made in the front end must align with the business overall strategy and goals when taking advantage of new or emerging opportunities. Input is received from: Resource Planning Sales and Operations Planning Demand Management During the Front End S&OP process, an aggregate plan is created to cover the time horizon of interest. This plan presents information in product families it is very high level. Output from the PPC process: The transition document between the Front End and the Engine is the Master Production Schedule (MPS). This document provides the master schedulers with detailed end item information on the anticipated build schedule based on the aggregate plan created during the S&OP session. 8

9 20. The role of Demand Management: Coordinates marketing and sales activities that place demand on manufacturing capacity and processes. Encompasses: Forecasting customer end-item demand Coordinating marketing initiatives and activity Aligning sales activity Order promising Accommodating interplant and intercompany demand Spare-parts requirements RELATE the role of demand management to the case study. REFERENCE the Toyota: Demand Chain Management case study s Overseas Planning Cycle section (pages 7-10). 21. The role of Resource Planning. Provides a 10,000 foot view in determining capacity necessary to produce products for the period being reviewed Strategic: brick and mortar facility requirements, virtual requirements Tactical: addition and/or disposal of machines and equipment Operational: labor and machine hours 9

22. The role of Sales and Operations Planning (S&OP):S&OP is a decision-making process where executive level management regularly meets and reviews projections for demand, supply and the resulting

10 22. The role of Sales and Operations Planning (S&OP):S&OP is a decision-making process where executive level management regularly meets and reviews projections for demand, supply and the resulting financial impact. Decisions are made in alignment with corporate goals and strategy. Produces an aggregate plan which will be used to create the anticipated production schedule.. Aggregate refers to sales and operations planning for a company s product lines or families (a combination of many separate units or items). Such functional planning processes include: Marketing Sales Operations Supply Chain Procurement Scheduling Logistics Engineering Human resources Finance Strategic planning 10

23. The role of Master Production Schedule (MPS).

processes to avoid shortages and inefficient allocation of resources.

Specifies the end-items that will be manufactured during the planning horizon.

11 23. The role of Master Production Schedule (MPS). Anticipated build schedule that balances resources, capacity, material availability, manufacturing policies, and manufacturing processes to avoid shortages and inefficient allocation of resources. Developed from the aggregate plan created in the S&OP process. Specifies the end-items that will be manufactured during the planning horizon. It disaggregates the aggregate plan into specific end items. The MPS issued by the master scheduler to create the master schedule for production use. The MPS initiates and drives MRP processes and activities to support the end item creation desired The three components of the engine of a PPC framework: Provides processes and systems for detailed material and capacity planning. 11

26. The role of Detailed Material Planning: Uses Material Requirements Planning (MRP) to determine the

all MPS specified end-items and the resulting master schedule.

end-items and associated components as specified by the MPS: the anticipated build schedule.

12 26. The role of Detailed Material Planning: Uses Material Requirements Planning (MRP) to determine the period-by-period (time-phased) plans for all component parts and raw materials required to support production of all MPS specified end-items and the resulting master schedule. The MPS from the Front End feeds directly into the Detailed Material Planning process. 27. The role of Detailed Capacity Planning. Produces a time-phased plan for labor and machine-center capacity requirements to manufacture all of the end-items and associated components as specified by the MPS: the anticipated build schedule. POINT OUT that Detailed Capacity Planning uses information from MPS (end-items) and MRP (components). 28. The role of Material and Capacity Plans. Combines the outputs from the Detailed Material Planning and Detailed Capacity Planning processes and feeds them to the back-end processes

Establish job order priorities and use metrics to quantify shop floor performance such as the time a job is output from the manufacturing area, down time, mean time between failures, etc.

13 30. The three components of the back end of a PPC framework: Provides the PPC s execution processes that track progress and collect data. Material and Capacity Plans from the Engine feed directly into the two PPC back-end system components. 31. DESCRIBE the role of Shop-Floor. Establish job order priorities and use metrics to quantify shop floor performance such as the time a job is output from the manufacturing area, down time, mean time between failures, etc. Includes: Data collection and tracking WIP movement and quantities Manufacturing status Manufacturing output data Other metrics 32. The role of Supplier : Provide detailed information to the company s suppliers and on their status. Purchase orders Ongoing updates on job priorities based on current conditions Future plans for significant changes in demand This generates the input for the suppliers Demand Management PPC processes. 13

14 33. The role of Enterprise Resource Planning (ERP) : 34. An ERP System: Embeds PPC systems and processes into all business activity. Channels PPC outputs as inputs to financial, marketing, and human resource systems, as well as operational areas. May support advanced analytical systems for manufacturing and logistics decision making across all of the PPC processes. Correct answer is: 35. Correct answer is: 36. Correct answer is: 14

15 37. Correct answer is: 38. File: CMM100_M2_L1_E2_Exercise_FINAL.docx 15

39. 40. Topic 3: PPC Classification System. 41.

16 Topic 3: PPC Classification System. 41. The PPC Classification System is influenced by the number of components or the complexity of the components as compared to the time between successive units. TELL students that examples of each are provided on subsequent slides. Reference: Manufacturing Planning and Control for Supply Chain Management by Thomas Vollmann, William Berry, David Clay Whybark and F. Robert Jacobs 16

17 42. The Flow classification. Flow manufacturing is used to produce products in continuous streams instead of discrete units or batches. Minimal time elapses between successive units. Flow products have few components. DISCUSS the associated examples. Flow: Chemical plants, food (orange juice), and so on. Generally involves continuous production, often without distinct individual items. 43. Repetitive classification. Repetitive manufacturing is used when assembling large quantities of similar products. This takes advantage of designated manufacturing lines that are created to provide specific capability for the product(s) to be produced on it. Repetitive manufacturing lines are less flexible than cellular manufacturing lines or job shops. Associated examples. Repetitive manufacturing examples include automobiles, televisions, and other high volume consumer products. Generally involves mass production of large volumes of items. POINT OUT that there is often overlap between Repetitive and Cellular production. 17

18 44. Cellular classification. Cellular systems make use of lean manufacturing techniques to optimize process flow to gain the advantages of repetitive manufacturing while maintaining some of the flexibility of a job shop. In some ways, manufacturing cells are similar to miniature repetitive manufacturing lines. Machines have been collocated into a cellular format to eliminate move time between process steps that have been identified to always occur in a specific order. One employee manages all machines within a cell. Not all machines must be used on all jobs, but, the order in which they are used must remain constant. Creation of cellular layouts must be made carefully since it does limit routing flexibility. Associated examples. Cellular systems: are used to eliminate wasted time and motion when demand over time allows for optimization of machine placement. Some machine shop areas utilize cellular layouts. Focuses on minimizing inventory in the supply chain. TELL students that they will learn more about Kanban later in the course. 18

45. Job Shop classification. Job Shops use machinery that is flexible and multipurpose. This allows for acceptance of many different types of orders.

19 45. Job Shop classification. Job Shops use machinery that is flexible and multipurpose. This allows for acceptance of many different types of orders. Job shops rarely get involved in long term repetitive product creation. They may make an item many times over time, but not continuously. Machines are usually placed in groups according to functionality. Routings are used to guide product through the manufacturing process. Associated examples. Tooling; fixtures; small quantities of unique parts; obsolete spare parts 46. The Project classification. 47. The project classification addresses the production of singular or unique products or items. Products, or items, are usually highly complex and low volume. A project approach to production tends to be driven by schedules. DISCUSS the associated examples. Project: buildings, one of a kind (satellites). Generally unique or long-term items. The correct answers are: Flow: Repetitive: Cellular: Job Shop: Project: 19

48. Topic 4: PPC Response to Change 49. DoD s ability to influence the marketplace is decreasing. For example, improvements in technology most often occur in the commercial sector.

20 48. Topic 4: PPC Response to Change 49. DoD s ability to influence the marketplace is decreasing. For example, improvements in technology most often occur in the commercial sector. To have access this technology, the DoD must buy from commercial suppliers, who are often unwilling to change their business practices to comply with government-unique requirements. Changes in technology, products, processes, systems, or techniques are sometimes required to remain competitive in the market. A change in company strategy could result in activities to: Shorten product lifecycles Initiate time-based competition Create new supply chain partnerships Change quality requirements 50. Typical responses to a change in manufacturing strategy. A change in manufacturing strategy could initiate: An increased level of flexibility and/or responsiveness Reduced overhead costs All changes have tradeoffs. For example, if safety stock levels are increased to improve responsiveness, holding costs may also increase. 20

For example, if automation is implemented to reduce production time, maintenance costs may be incurred. 52.

21 51. A change in manufacturing processes to meet new strategic demands based on market changes could include use of: Automation Production Cells Simplification All changes have tradeoffs. For example, if automation is implemented to reduce production time, maintenance costs may be incurred. 52. A change in the PPC System could be: Implementing a new Material Requirements Planning system Utilizing cellular layouts which will change routing and standard timing information 53. Answers: Company Strategy: Manufacturing Strategy: Manufacturing Processes: PPC System: 21

54. REVIEW Having completed this lesson, you should now be able to: Contrast the role of PPC systems across long, medium, and operational timeframes.

22 54. REVIEW Having completed this lesson, you should now be able to: Contrast the role of PPC systems across long, medium, and operational timeframes. o Strategic planning uses information needed to make informed decisions that are aligned with business goals in order to meet future market demands.. It also acknowledges and incorporates long lead times required to secure capacity, raw materials, and other resources necessary to fulfill those demands. o Tactical planning matches supply and demand with regard to product mix and volume. o Operational planning Incorporates the day to day manufacturing schedules, resource capability at hand, metrics, manufacturing policies and processes. Describe PPC processes and activities across long, medium, and operational timeframes. o (Review the Toyota case study and how its overseas planning cycles relate to long-, medium-, and operational planning activities Note to those revising these documents: these activities may be moved to the end of the module and therefore this point needs to be moved as well do not put these words in the student guide.) Differentiate between the levels of a PPC System. o Reference example product from each level of the system. Categorize typical PPC responses to changes in technology, products, processes, or strategy for a given scenario. 22

23 o Note elements within the PPC may be adjusted to account for changes and events that could negatively impact production and where tradeoffs may occur. 55. REVIEW how you will use the lesson material in your day-to-day responsibilities. Your understanding of PPC concepts provides you with the terminology to discuss and evaluate contractors systems. This knowledge will aid in determining if the contractors are capable of meeting their contract requirements. 23

Oman College of Management and Technology

Oman College of Management and Technology Course 803303 PIS Chapter 1 Manufacturing, Planning and Control CS/MIS Department Definition Manufacturing Planning and Control system is a methodology designed