Manufacturing Planning and ControlVollman/Berry/Whybark/Jacobs: Manufacturing Planning and Control for Supply Chain Management, 5/e (2005)http://www.pom.edu/mpc/index.htmChapter 1Vollmann, Berry, Whybark & Jacobs

DefinitionA Manufacturing Planning and Control system is a methodology designed to manage efficiently the flow of material, the utilization of people and equipment, and to respond to customer requirements by utilizing the capacity of our suppliers, that of our internal facilities, and in some cases that of our customers to meet customer demand.

A Context for Thinking about Manufacturing Planning and Control (MPC)What are processes?Processes define how we do things! Step 1 Step 2 Step 3 etc.So, what is the role of MPC?The MPC system tells the processes what to work on.Plans the resources that processes use (i.e. people, equipment, material).Plans for what processes will be doing in the future.

DefinitionMfg Planning andControl SystemManage theefficient flow ofmaterialsPlan the use ofpeopleEfficient useof our capacityand that of oursuppliers.

Possibly even our customers.Driven by customerdemand and otherCustomer requirementsOften part of a companys ERP system.

AgendaWhat influences the MPC system design?What are the typical support activities? (LT, MT, ST)Performance indicatorsMPC Framework (FE, E, BE)Matching MPC system with NeedsClassification SchemaEvolution & Responses

Key Areas of Influence on MPC system designDegree of InternationalizationSempre pi elevato per la spinta ad esternalizzare il processo di produzione e concentrarsi su progettazione e mercato. Nike. Macintosh. Dell (cfr. Chase).Role of the customer in the systemVariabilit della dimensione e tipologia della domanda che richiede flessibilit produttiva ottenuta abbassando scorte, tempi di risposta e costo delle transazioni nel sistema informativo con SC molto diversificate e sparse Increasing use of Information Technology.Necessario per supportare Lean SC con dati e procedure comuni per unit organizzative funzionalmente, geograficamente e culturalmente disparate e differenti

Typical Support ActivitiesLong Term

Intermediate Term and

Short Term.

Long Term (Piano di Produzione=>MPS)The system is responsible for providing information to make decisions on (cfr. Variabili strategiche, p.13 Seminario)):The appropriate amount of capacity (intende quantit per ogni tipo di capacit produttive) - including supplier capacity - to meet the market demands of the future.Provide the appropriate mix of human resource capabilities (profili tecnici e/o professionali), technology, and geographic locations.

Intermediate TermThe fundamental issue is matching supply and demand in terms of both volume and product mix.Planning for the right logistics.Providing customers with information on correct quantities and location to meet market needs.Planning of capacity to determine employment levels, budgets, overtime and subcontracting needs, etc.

Short TermThere is a need for detailed scheduling of resources to meet production requirements.Involves time, people, material, equipment and facilities.Involves people working on the right things.Involves tracking the use of resources and execution results.Provide problem-solving support.

Performance IndicatorsOutput resultsEquipment utilizationCost associated with different departments, products, labor utilization, and project conditions.Measures of customer satisfaction such as late deliveries, product returns, quantity and quality errors.

Costs and Benefits of MPC systemsThe costs of an MPC are substantial but so can be theRewards (see examples).

Common to see ERP system costs measured at 5-10% of cost of goods sold.

An MPC System FrameworkFront End (cfr. p.14 e segg. del Seminario)Set of activities and systems for overall direction setting (Demand Management, Sales & Operations Planning, Resource Planning and MPS)EngineMaterial Requirements Plans (MRP): Systems for detailed material and capacity planning.Back EndDepicts the MPC execution systems

ResourcePlanningSales and operationsplanningDemandmanagementMaster productionschedulingDetailed capacityplanningDetailed materialplanningShop-floorsystemsSuppliersystemsEnterprise Resource Planning (ERP) SystemFront EndEngineBack endManufacturing Planning and Control SystemMaterial Requirements Plans (MRP)

Front EndDemand ManagementPrevisione di domanda del cliente finale. Ordini. Rapporti interaziendali. Specifiche su parti di ricambio.Sales & Operations PlanningCoordinamento delle risorse produttive disponibili per rispondere ai piani di vendita (sales/marketing planes). Resource PlanningPrevisione delle risorse produttive e loro coordinamento Master Production Schedule (MPS)Cosa bisogna produrre e in quali tempi

ResourcePlanningSales and operationsplanningDemandmanagementMaster productionScheduling (MPS)Detailed capacityplanningDetailed materialplanningMaterial andcapacity plansShop-floorsystemsSuppliersystemsEnterprise Resource Planning (ERP) SystemFront EndEngineBack endManufacturing Planning and Control SystemFront EndSet of activities and systems for overall direction setting (Demand Management, Sales & Operations Planning, Resource Planning and MPS)

EngineDetailed Capacity Planning (DCP)Determina in dettaglio quali risorse produttive (persone, macchine, ) occorrono per la produzioneDetailed Material Planning (DMP)Determina in dettaglio quali parti e materie prime occorrono per la produzione in base alla esplosione (BOM: Bill Of Materials) dei prodotti finali Material Requirements Plans (MRP):Determina in dettaglio in quali tempi occorrono le parti e le materie prime, in base al coordinamento delle risorse produttive e ai BOM dei prodotti finali

ResourcePlanningSales and operationsplanningDemandmanagementMaster productionschedulingDetailed capacityplanningDetailed materialplanningMaterial andcapacity plansShop-floorsystemsSuppliersystemsEnterprise Resource Planning (ERP) SystemFront EndEngineBack endManufacturing Planning and Control SystemEngineSystems for detail material and capacity planning.

Back End (execution systems)Supplier systemsCoordinamento tempi e quantit delle parti e delle materie prime con I fornitoriShop-floor systemsCoordinamento e scheduling dettagliato delle operazioni per le attivit produttive

ResourcePlanningSales and operationsplanningDemandmanagementMaster productionschedulingDetailed capacityplanningDetailed materialplanningMaterial andcapacity plansShop-floorsystemsSuppliersystemsEnterprise Resource Planning (ERP) SystemFront EndEngineBack endManufacturing Planning and Control SystemBack EndMPC execution systems Track progress and collect data.

Matching MPC System with the Firm needs (A DYNAMIC PROCESS)As competitive conditions, customer expectations, supplier capabilities, and internal needs change the MPC should change. Di conseguenza anche limportanza relativa dei vari moduli dellMPC cambia nel tempo.The trend is towards on-line data access and systems (principale cambio tecnologico: intra e inter unit organizzative).Physical changes influenzano lMPC:Outsourcing mfg (manufacturing). Hollowing (ricercando) out of corporation (?), etc.Providing information at the level where decision are made, in appropriate time and frames, directly from the shop floorFirms competing in product variety strength MPS and DMPFirms competing on delivery speed need to improve execution.

MPC Classification Schema(enfasi degli approcci dellMPC a seconda della complessit, cio numerosit dei componenti, e cadenza dei prodotti)Flow(quantit)Repetitive(Beni discreti)Just-in-timeMRPProjectManagmentNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsDa destra a sinistra diminuiscono: tempi dei cicli e di risposta, immagazzinato e simili

MPC Classification SchemaFlowRepetitiveJust-in-timeMRPProjectNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsFlow (chemical plants, food, etc.)

MPC Classification SchemaFlowRepetitiveJust-in-timeMRPProjectNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsRepetitive Mfg. (automobiles, high volume consumer products (i.e. TVs)

MPC Classification SchemaFlowRepetitiveJust-in-timeMRPProjectNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsJust-in-Time systems (feedback management for shorter life cycle products e.g. fashion items). Focus on minimizing inventory in the supply chain.

MPC Classification SchemaFlowRepetitiveJust-in-timeMRPProjectNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsMRP (feedforward management for management of complicated longer life products, i.e. machines, electronic equipment).

MPC Classification SchemaFlowRepetitiveJust-in-timeMRPProjectNumber of SubpartsSecondsMinutesDaysWeeksMonthsTime between successive unitsProject (unique; long term), buildings, one of a kind (satellites).

MPC Classification SchemaFlow (chemical plants, food, etc.)Repetitive Mfg. (automobiles, watches, personal computers)Just-in-Time systems (shorter production cycles)MRP (management of complicated parts product)Project type (unique; long time).

PrinciplesThe framework for the MPC is general and all 3 phases must be performed but specific applications must reflect particular firm conditions and objectives.In SC environments, the MPC must coordinate the planning and control efforts.MPC systems should support the strategy and tactics pursued by the company.

PrinciplesDifferent Manufacturing processes dictate the need for different designs of the MPC.The MPC should evolve to meet changing requirements in the market, technology, products, and processes.The MPC should be comprehensive in supporting the management of all manufacturing resources.

PrinciplesDifferent Manufacturing processes and Supply Chains need different designs of the MPC. one size does not fit all.The MPC must evolve to meet changing requirements in the market, technology, products, and processes.Major problem the conflict between the flexible and changing needs of companies and the inflexibility of ERP systems.

ERP CompaniesSAPOracleMicrosoftMy Interest in the TopicsSyllabus Next Class

PrinciplesAn effective MPC can contribute to competitive performance by lowering costs and providing greater responsiveness to the market.In firms that have an integrated ERP system and database, the MPC system should integrate with and support cross-functional planning through the ERP system.

ERP Companies The Big Three (SAP, Oracle, Microsoft).Professional Organizations APICS, ISM, NAPM