Supporting Slides

1
Supporting Slides
X
Systems for Planning Control in
Manufacturing Systems and Management for
Competitive Manufacture
Professor David K Harrison Glasgow Caledonian
University Dr David J Petty The University of
Manchester Institute of Science and Technology
ISBN 0 7506 49771
0000
2
Planning and Control Overview
16
1601
3
Rationale for Planning
16
Organisation
Environment
1602
4
Manufacturing Management - History
16
ROP
MRP
ERP
MRP II
OPT
JIT
1603
5
Open-Loop Systems
16

• Earliest Form of Planning
• Techniques to be Covered
• Re-Order Point (ROP)
• Material Requirements Planning (MRP)
• The Manufacturing Database
• Basic Inventory Management

1604
6
Manufacturing Data - Items
16

• Items Definition
• Make
• Buy
• Sell
• Unique Identifier
• Holds Key Data
• Lead-times
• Lot Sizes

1605
7
Items and Bills of Materials (BOMs)
16
Motor
Motor Body
End Cover (2)
Terminal Box
Rotor
Winding
Feet (2)
Bearing (2)
1606
8
Full Parts Explosion
16
Bills of Materials are Alternatively Called
Product Structures
1607
9
Use of Phantoms
16
X
B
C
D
E
Orders are Never Generated for X, but rather B,
C, D and E
1608
10
Order Model of Control (1)
16
Raised by a Supplier in Response to a Purchase
Order
Sent by a Customer to a Supplier
Raised by a Supplier to Trigger Manufacturing
Activity
1609
11
Order Model of Control (2)
16
STK Stock RM Raw Material PO Purchase Order
STK Stock FGI Finished Goods
Inventory SO Sales Order
Receipt
Issue
Shopfloor
Transaction
Transaction
Feedback
Due
Launch
Date
Date
Process
Process
Process
Queue
Queue
Queue
3
1
2
Due
Work in Process
Due
Date
Date
SO
PO Receipt
Lead Time (Lt
)
Despatch
1610
12
ROP Theory
16
Average Demand (Ad)
Gradient
Stock
Ls
ROP
Ss
Time
Lt
1611
13
Typical Demand Pattern
16
ROP - Assumptions Orders Arrive Late Material is
Consumed Discontinuously Average Demand is Not
Representative
1612
14
Effect of Uncertainty
16
1200
Stock
1000
800
600
400
200
0
-200
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Time
Sep
Nov
1613
15
Probability Distribution
16
1614
16
Forecast Uncertainty (1)
16

• What Level of Safety Stock is Required?
• This Depends on the Service Level Required

Stage 1. Calculate MAD. Stage 2. Determine the
numbers of MADs corresponding to Service
Level. Stage 3. Multiply the number of MADs by
the MAD Value.
1615
17
Forecast Uncertainty (2)
16
Assume a Service Level of 95
1.32
95
Stage 2.
Stage 3.
Stage 1.
1616
18
EOQ Theory (1)
16
Inventory
Time
D
r
Inventory
L
s
Time
1617
19
EOQ Theory (2)
16
Annual Stock Holding Cost Ci (/unit) Annual
Demand Rate Dr (units/year) Production Cost
Rate Cp (/min) Lot Size Ls (units) Set-up
time Ts (mins) Lot Size for Minimum Cost
EOQ Process Time Tp (mins)
1618
20
EOQ Theory (3)
16
Cost
Inventory
EOQ
Production
Total
Total Cost
Production Cost
Inventory Cost
Lot Size
1619
21
Evolution of MRP
16
Business Planning
Sales and Operations Planning
Demand
Demand
Master Production Scheduling
Re-Order Point
Material Requirements Planning
Material Requirements Planning
Capacity Requirements Planning
Orders
Orders
No
Realistic
Yes
Shop Floor Control
Definition
The planning of components based on the demand
for higher level assemblies.
Purchasing
1620
22
Limitations of ROP
16
A
Assembly
B
C
D
E
F
G
H
I
J
K
Components
(95)
(95)
(95)
(95)
(95)
(95)
(95)
(95)
(95)
(95)
Overall Service Level
Independent
ROP
Demand from outside the organisation
Dependent
MRP
Demand from higher level assemblies
1621
23
ROP - Exceptions
16
Low Cost
High Volume
Commonality
"C" Class Items
Eg. Fasteners
Non-Critical
Availability
120
100
80
C
60
B
40
of Value
A
20
0
0
10
20
30
40
50
60
70
80
90
100
of Variety
1622
24
MRP Principles
16
Sales
Orders
Next Level
1623
25
MRP - Example
16
Part No
A0
SOH Stock on Hand
Lead Time
3
10
SOH
3
4
5
6
7
8
9
Order Qty
60
20
20
20
20
20
20
20
20
Gross Requirements
Scheduled Receipts
60
Projected Available Balance
25
Product Structure
Planned Order Receipt
Planned Order Release
A0
Part No
F1
Lead Time
1
F1
10
SOH
3
4
5
6
7
8
9
Order Qty
120
Gross Requirements
Scheduled Receipts
Projected Available Balance
15
Planned Order Receipt
Planned Order Release
1624
26
MRP Summary
16
Collect - Gross Requirements Nett - Stocks
and Receipts Apply - Allowances and Lot
Sizes Offset - Lead Times Explode - Into
Components
1625
27
MRP - Summary
16

• Avoids Problems of ROP
• Not Required for All Parts
• More Complex
• Requires Bills of Material
• Scheduling Engine for Closed Loop MRP

1626
28
Closed Loop MRP - Overview
17
Business Planning
Sales and Operations Planning
Demand
Demand
Master Production Scheduling
Material Requirements Planning
Re-Order Point
Material Requirements Planning
Capacity Requirements Planning
Orders
Orders
No
Realistic
Definition
A system built around MRP, but including the
additional functions of sales and operations
planning, master production scheduling and
capacity requirements planning. Closed loop
implies monitoring and control of the execution
functions (both purchase and manufacture).
Yes
Shop Floor Control
Purchasing
1701
29
Closed-Loop Control
17
Planning
Do
Plan
Execution
Act
Check
Feedback
Deming
Cycle
1702
30
Hierarchical Management
17
Business Planning
Sales and Operations Planning
Corporate
Planning
Master Production Scheduling
Material Requirements Planning
Aggregate
Planning
Capacity Requirements Planning
Master
Planning
No
Realistic
Intermediate
Planning
Yes
Shop Floor Control
Low Level
Planning
Purchasing
Process
Control
1703
31
Open-Loop Assumptions
17

• Demand Remains Constant
• Execution Proceeds as Planned
• All Data is Static and Accurate
• Management Policies Remain Constant

1704
32
Open-Loop Limitations (1)
17
Sales
Planning
Open Loop MRP
Order Launch
and Expedite
Suppliers
Engineering
Stores
Manufacturing
1705
33
Open-Loop Limitations (2)
17
Part No
A0
Lead Time
3
10
SOH
3
4
5
6
7
8
9
Order Qty
60
40
20
20
20
20
20
20
20
20
Gross Requirements
Scheduled Receipts
60
Projected Available Balance
25
45
85
65
45
5
45
25
25
Product Structure
Planned Order Receipt
60
60
Planned Order Release
60
60
A0
Part No
F1
Lead Time
1
F1
10
SOH
3
4
5
6
7
8
9
Order Qty
120
Gross Requirements
60
60
Scheduled Receipts
Projected Available Balance
15
75
75
15
15
15
15
15
Planned Order Receipt
Planned Order Release
120
1706
34
Closed-Loop Mechanism (1)
17

• By the Provision of Capacity Planning Tools
• By the Monitoring of the Execution of Plans
• By the Printing of Planner Action Messages

1707
35
Closed-Loop Mechanism (2)
17
Sales and Operations Planning
Master Production Scheduling
Material Requirements Planning
Capacity Requirements Planning
No
Realistic
Yes
Shop Floor Control
Purchasing
1708
36
Planner Action Lists
17
No
Yes
Yes
No
Yes
Yes
No
Yes
No
No
Items Processed in Logical Order (ie., According
to BOM)
1709
37
Typical Messages
17
Generated After MRP Run

• Past Due Order
• Reschedule Order in
• Reschedule Order Out
• Cancel Order
• Planned Order Due for Release
• Planned Order Past Due for Release

Actioned by Planner
1710
38
Terminology
17

• Regenerative/
• Net Change MRP
• Bucketed/
• Bucketless System
• Pegging

1711
39
MRPII
17
Business Planning
Sales and Operations Planning

• Similar to Closed Loop
• Simulation Capability
• Financial Management

Master Production Scheduling
Rough-Cut Capacity Planning
Material Requirements Planning
Capacity Requirements Planning
No
Realistic
Yes
Definition
A method for planning of all resources in a
manufacturing organisation. It includes a
simulation capability and is integrated with
financial planning. These systems work with the
modules of closed-loop MRP.
Shop Floor Control
Purchasing
1712
40
ERP
17

• No Universal Definition
• Some Re-Badging
• Functionality
• Product Families/Medium-Term Aggregate Plans
• Multi-Site Reporting
• Electronic Commerce Functionality
• Widely Used Terminology

1713
41
Advantages of the Package Approach
17

• Maintenance Fees
• Business Focus
• Implementation Times
• System Reliability
• Advanced IT/IS Functionality

Bespoke Approach
Package Approach
1714
42
MRPII/ERP Package Structure
17
1715
43
Additional ERP Functionality
17

• Configured Products
• Human Resource Management
• Maintenance Management
• Quality Management

1716
44
Static and Dynamic Data
17
Dynamic
Static
Function
Customer
Sales
Sales/Marketing
Addresses
Orders
Part
Design
Geometry
Machines
Process Planning
Work Centre
Works
Production Planning
Capacity
Orders
Purchase
Suppliers
Purchasing
Orders
Addresses
Payments
Personnel
Personnel
Year to Date
Names
Account
Account
Accounts
Numbers
Balances
1717
45
The MRPII/ERP Database
17
Data Accuracy is Crucial
1718
46
Closed-Loop MRP - Summary
17

• Avoids "Order Launch and Expedite"
• Uses Planner Action Lists
• MRP Becomes a Module
• Introduces New Elements
• Generates Viable Plans
• Monitors Execution
• Has Evolved into ERP
• Only a Piece of Software

1719
47
Course Book
X
Systems for Planning Control in
Manufacturing Systems and Management for
Competitive Manufacture Professor David K
Harrison Dr David J Petty ISBN 0 7506 49771
0000