Manufacturing

Planning and Control

Vollman/Berry/Whybark/Jacobs:
Manufacturing Planning and Control for Supply Chain
Management, 5/e (2005)http://www.pom.edu/mpc/index.htm

Chapter 1
Vollmann, Berry, Whybark & Jacobs

Definition
A 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.

Definition
Mfg Planning and
Control System

Driven by customer
demand and other
Customer requirements

Plan the use of

people
Manage the
efficient flow of
materials

Efficient use
of our capacity
and that of our
suppliers.
Possibly even
our customers.

Often part of a companys ERP system.

Agenda
What influences the MPC system
design?
What are the typical support
activities? (LT, MT, ST)
Performance indicators
MPC Framework (FE, E, BE)
Matching MPC system with Needs
Classification Schema
Evolution & Responses

Key Areas of Influence on MPC

system design

Degree of Internationalization

Sempre 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 system

Variabilit 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 Activities

Long 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 Term
The 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 Term
There 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 Indicators
Output results
Equipment utilization
Cost 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

systems
The costs of an MPC are substantial
but so can be the
Rewards (see examples).

Common to see ERP system costs

measured at 5-10% of cost of goods
sold.

An MPC System Framework

Front 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)

Engine
Material

Requirements Plans (MRP): Systems for

detailed material and capacity planning.

Back End
Depicts

the MPC execution systems

Sales and operations

planning
Master production
scheduling

Detailed capacity
planning

Demand
management

Front End

Detailed material
planning
Engine
Material
Requirements
Plans (MRP)

Shop-floor
systems

Supplier
systems

Back end

Enterprise Resource Planning (ERP) System

Resource
Planning

Manufacturing Planning and Control System

Front End

Demand Management

Previsione di domanda del cliente finale. Ordini. Rapporti

interaziendali. Specifiche su parti di ricambio.

Sales & Operations Planning

Coordinamento delle risorse produttive disponibili per

rispondere ai piani di vendita (sales/marketing planes).

Resource Planning

Previsione delle risorse produttive e loro coordinamento

Master Production Schedule (MPS)

Cosa bisogna produrre e in quali tempi

Sales and operations

planning
Master production
Scheduling (MPS)

Demand
management

Front End

Enterprise Resource Planning (ERP) System

Resource
Planning

Front End
Detailed capacity
Detailed material
and systems for
planning Set of activities
planning
Engine
overall direction
Material and Management, Sales
setting (Demand
capacity plans
& Operations Planning, Resource
Planning and MPS)
Shop-floor
systems

Supplier
systems

Back end

Manufacturing Planning and Control System

Engine

Detailed Capacity Planning (DCP)

Determina in dettaglio quali risorse produttive (persone,

macchine, ) occorrono per la produzione

Detailed 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

Sales and operations

planning

Demand
management

Engine
Systems
for detail material
Master production
Front End
and scheduling
capacity planning.

Detailed capacity
planning

Detailed material
planning
Engine
Material and
capacity plans

Shop-floor
systems

Supplier
systems

Back end

Enterprise Resource Planning (ERP) System

Resource
Planning

Manufacturing Planning and Control System

Back End (execution systems)

Supplier systems

Coordinamento tempi e quantit delle parti e delle materie prime

con I fornitori

Shop-floor systems

Coordinamento e scheduling dettagliato delle operazioni per le

attivit produttive

Sales and operations

planning
Master production
scheduling

Demand
management

Front End

Back
End
Detailed capacity
Detailed material
planning
planning
MPC execution systems Engine
Track progress
Materialand
and collect
capacity plans
data.
Shop-floor
systems

Supplier
systems

Back end

Enterprise Resource Planning (ERP) System

Resource
Planning

Manufacturing Planning and Control System

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 floor
Firms competing in product variety strength MPS and DMP
Firms 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)

Number of Subparts

Da destra a sinistra diminuiscono: tempi dei cicli e di risposta,

immagazzinato e simili
MRP

Repetitive
(Beni discreti)

Project
Managment

Just-in-time

Flow
(quantit)
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Number of Subparts

Flow (chemical plants, food, etc.)

Project
MRP
Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Number of Subparts

Repetitive Mfg. (automobiles, high

volume consumer products (i.e.
TVs)

Project
MRP

Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Number of Subparts

Just-in-Time systems (feedback

management for shorter life cycle
products e.g. fashion items).
Focus on minimizing inventory in
the supply chain.

Project

MRP
Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

Number of Subparts

MPC Classification Schema

MRP (feedforward management for
management of complicated longer
life products, i.e. machines,
electronic equipment).

Project

MRP
Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Number of Subparts

Project (unique; long term),

buildings, one of a kind
(satellites).
Project
MRP
Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Flow (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).

Principles
The 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.

Principles
Different 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.

Principles
Different 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 Companies
SAP
Oracle
Microsoft

My Interest in the Topics

Syllabus Next Class

Principles
An 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.