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Manufacturing Planning And Control Systems Vollmann Pdf 20 ((BETTER))

Perhaps the most important aspect of the context for development and maintenance of a manufacturing planning and control system is the continual change in its competitive environment. Changes range from technological to political and strategic. Three key areas of influence on MPC system design are the degree of internationalization, the role of the customer in the system, and the increasing use of information technology.

manufacturing planning and control systems vollmann pdf 20


These shifting requirements in international collaborations have given new meaning to the expression supply chains (sometimes called demand or value chains) or supply networks. As opportunities arise and conditions change, the members of a particular supply network will change with unpredictable timings. There are occasions when a firm will be both a supplier and a customer to the same firm, while supplying their competitors and their customers. These shifting networks have given rise to a very special need to have material planning and control systems that are transportable, international, transparent, and effective.

Figure 1.1 is a schematic of the general MPC system that would be used within a firm for planning and controlling its manufacturing operations. But linking customer and supplier firms in a supply chain requires coordinating the MPC activities between the firms. The model shown in Figure 1.1 is essentially what one will find as a key part of any packaged ERP system. The figure is divided into three parts or phases. The top third, or front end, is the set of activities and systems for overall direction setting. This phase establishes the overall company direction for manufacturing planning and control. Demand management encompasses forecasting customer/end product demand, order entry, order promising, accommodating interplant and intercompany demand, and spare parts requirements. In essence, demand management coordinates all activities of the business that place demands on manufacturing capacity.

Sales and operations planning balances the sales/marketing plans with available production resources. The result is an agreed-on company game plan that determines the manufacturing role in meeting company strategy. Increasingly, this activity is receiving more management attention as the need for coordination is recognized in progressive firms. The master production schedule (MPS) is the disaggregated version of the sales and operations plan. That is, it states which end items or product options manufacturing will build in the future. The MPS must support the sales and operations plan. Resource planning determines the capacity necessary to produce the required products now and in the future. In the long run this means bricks and mortar, while in the short run it means labor and machine hours. Resource planning provides the basis for matching manufacturing plans and capacity.

The three-phase framework for manufacturing planning and control is supported by widely available MPC systems and software, from master production scheduling to the back-end systems. This software is not only integrated to follow the framework, it is also linked to other business activities in the ERP systems of many firms. That means that the MPC systems provide inputs to the financial, distribution, marketing, and human resources systems that require the information.

MPC systems must also reflect the physical changes taking place on the factory floor. Outsourcing, contract manufacturing, and the hollowing out of the corporation dramatically affect MPC systems design. Moves from job shops to flow processes to cellular manufacturing approaches affect the MPC systems design as well. Providing information at the level where decisions are made in appropriate time frames has greatly augmented the use of computers on the factory floor and the speed of interaction between planning and execution.

Figure 1.2 also shows material requirements planning as spanning a wide area. MRP is often the platform for ERP applications and is key to any MPC system involving management of a complicated parts situation. The majority of manufacturing firms have this sort of complexity, and MRP-based systems continue to be widely applied. For many firms, successful use of MRP is an important step in evolving their approaches to MPC. Once routine MRP operation is achieved, portions of the product and processes that can be executed with JIT methodologies can be selected.

This chapter covers issues concerned with how a firm integrates information from and about its customers, internal and external to the firm, into the manufacturing planning and control system. It is in this module that all potential demands on manufacturing capacity are collected and coordinated. Demand management includes activities that range from determining or estimating the demand from customers, through converting specific customer orders into promised delivery dates, to helping balance demand with supply. A well-developed demand management system within the manufacturing, planning, and control (MPC) system brings significant benefits to the firm. Proper planning of all externally and internally generated demands means capacity (ultimately, supply) can be better managed and controlled. Information that helps to integrate the needs of the customers with the capabilities of the firm can be developed. Timely and honest customer order promises are possible. Physical distribution activities can be improved significantly. This chapter shows how to achieve these benefits. The focus is a combination of techniques and management concepts necessary to perform this integrative activity. This chapter is organized around the following topics:

Several chapters in this book closely relate to demand management. Sales and operations (Chapter 3) is the area where much of the demand management information is used to develop formal company plans. Externally, as we are satisfying customers, we in turn are a customer, so this chapter is closely related to supply chain management (Chapter 17). Demand management provides information to the company that is used in master production scheduling (Chapter 6), capacity planning (Chapter 10), and production activity control (Chapter 11). Additional technical detail on the management of inventories is found in basic inventory concepts (Chapter 5).

Demand management is a gateway module in manufacturing planning and control (MPC), providing the link to the marketplace, sister plants, warehouses, and other important customers. As such, it is in demand management that we gather information from and about the market doing things like forecasting customer demand, entering orders, and determining specific product requirements. Moreover, it is through this module that we communicate with our customers by promising delivery dates, confirming order status, and communicating changes. Demand management is also concerned with identifying all sources of demand for manufacturing capacity, including service-part demands, intracompany requirements, and promotional inventory buildup or other needs for pipeline inventory stocking.

The position of demand management in the MPC system is shown in Figure 2.1. It is the key connection to the market in the front end of the MPC system. The external aspects of the demand management module are depicted as the double-ended arrow connected to the marketplace outside the MPC system. This simply underscores the need to communicate with the customers as well as to gather information from and about them. The other linkages are with the sales and operations planning (SOP) module and the master production scheduling (MPS) module. The information provided to SOP is used to develop sales and operations (including manufacturing) plans covering a year or more in duration at a fairly high level of aggregation. Both forecast and actual demand information is provided to the MPS module. It is in the MPS module that short-term, product-specific manufacturing plans are developed and controlled as actual demand becomes available and information is provided to provide delivery promises and order status to customers.

It is through these linkages that quantities and timing for all demands must be collected and coordinated with the planning and control activities of the company. The planning part of manufacturing planning and control (MPC) involves determining the capacity that will be made available to meet actual future demands for products. Much of this planning activity occurs in the sales and operations module. The control part determines how the capacity will be converted into products as the orders come in. The company executes the plan as actual demand information becomes available. The control function determines how the company will modify the plans in light of forecast errors and other changes in assumptions that inevitably occur. A substantial portion of the control activity is conducted in the master production scheduling module. Both the SOP and MPS modules require the information provided through the demand management module.

For many firms, planning the execution and controlling demand quantities and timings are a day-to-day interactive dialogue with customers. For other firms, particularly in the process industries, the critical coordination is in scheduling large inter- and intracompany requirements. For still others, physical distribution is critical, since the factory must support a warehouse replenishment program, which can differ significantly from the pattern of final customer demand.

A disaggregation process in manufacturing planning and control (MPC) converts a higher-level plan into lower-level detailed plans and schedules. The high level plan is usually too general and thus incomplete. It needs to be complemented by and implemented in detailed schedules of operations. The disaggregation process also reflects the real practice of hierarchical planning and control.


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