IE 563 Advanced Production Planning and Control

Winter 2014
Hector A. Vergara
School of Mechanical, Industrial and Manufacturing Engineering Oregon State University

Today
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Course Overview Introduction to Production Planning and Control

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Instructor’s Information


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Instructor: Dr. Hector A. Vergara Office: 422 Rogers Hall Phone: (541) 737-0955 Email: hector.vergara@oregonstate.edu Office Hours  M 1:00 – 2:30 PM, W 2:30 – 4:00 PM  By appointment  Do not email technical questions about an assignment

Lengthy or potentially difficult questions should be handled face to face with instructor
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Prerequisites   IE 521  Some knowledge of optimization methods Knowledge of Engineering Statistics ST 314   I am also assuming you have   Some ability to program in a general-purpose language such as “C”. VB. or Java Familiarity with spreadsheets and other office productivity software 4 .

and office hours Text references Class policy information – grading.edu/mime/winter2014/ie563  Syllabus     Contact info. homework.oregonstate. project Tentative course schedule  Blackboard site for IE 563     Slides for lectures (more on this later) Homework assignments and solutions Materials Announcements 5 .Course Information  Course Web Page:  http://classes. exams.engr.

also good for MS and PhD  We will move around the text according to the tentative course plan 6 . Whybark. F. D..R.E.  A great reference for MEng.Recommended Textbook  Jacobs.. Manufacturing Planning and Control for Supply Chain Management (6th Ed). NY: McGraw-Hill.C. T.L. Berry. (2011).. Vollmann. W. New York.

(2012). Scheduling: Theory. W. M. Algorithms and Systems. Factory Physics. T.L.... New York. & Boucher. Prentice Hall.O.J.Other References     Hopp. Kluwer Academic Press. Inventory Control. 2nd ed. Pinedo. 3rd ed. S. M. NY: McGraw-Hill Irwin. (1994). Elsayed. E. Analysis and Control of Production Systems. (2006).A. Springer. 7 . Axsäter. (2008). 4th ed. & Spearman.

March 18 9:30-11:20 AM   Homework  Approx.Course Evaluation  Grading Weights:  Midterm Exam  30% Tuesday. 6 total Multiple deliverables Term Project  8 . February 11  Final Exam   30% 15% 25% Tuesday.

79%) [72% .72%) [59% .92%) [86% .86%) [79% .Course Evaluation  The final course grades will be assigned using to the following scale:           A AB+ B BC+ C CD F 92% or more [89% .69%) less than 59% 9 .89%) [82% .82%) [76% .76%) [69% .

Exams & Homework  Exams  Closed book and closed notes exams   No laptop computers permitted One double sized formula sheet (8. lecture material & reading assignments  Homework  Homework assignments are due at the beginning of the lecture session  No late assignments will be allowed! Each HW is worth 10 pts.   Homework will be graded based on completeness  Group study is encouraged but splitting up assignments is not 10 .5”x11”) with hand-written notes allowed  Based on homework.

Term Project  Teams will work in a project during the term   Research and implementation of a topic within Production Planning and Control Multiple deliverables     Proposal Progress Report Final Report Presentation  No collaboration allowed between groups 11 .

Classroom Rules     Arrive to class on time Be attentive during class Refrain from rude or distracting behavior No cell phone use during class  In general. use common sense and be considerate of others! 12 .

Tentative Course Schedule 13 .

MRP-II. CRP JIT 14 .Course Outline   Introduction to PP&C Supply Chain Inventory Management   Deterministic Inventory Models Stochastic Inventory Models    Sequencing and Scheduling MRP.

Questions? 15 .

Introduction to Production Planning and Control 16 .

17 . Mathematical models for inventory systems. Assembly line balancing methods. sequencing and scheduling. and capacity planning.Course Catalog Description  IE 563 – Advanced Production Planning and Control  Application of quantitative and heuristic methods to problems of production. material. Just-in-Time manufacturing.

planning and control problems are inherently optimization problems  The objective is to develop a plan that meets demand at minimum cost or that fills the demand that maximizes profit 18 .Production Planning and Control  Definition  Manufacturing/production planning and control entails the acquisition and allocation of limited resources to production activities so as to satisfy customer demand over a specified time horizon  As such.

/Production System Finished Goods  Functional areas of a firm    Marketing Finance Production 19 .Manufacturing/Production Function Resources: • Workers • Machines Raw Materials Mfg.

Factory Physics 3 rd ed. 20 .Product/Process Matrix Low Volume Multiple Products Low Standardization Low Volume Few Products Higher Volume High Volume High Standardization Jumbled Flow (job shop) Commercial Printer Void Disconnected Line Flow (batch) Heavy Equipment Connected Line Flow (assembly line) Auto Assembly Continuous Flow Void Sugar Refinery Source: Hopp and Spearman (2008).

21 . Designing and Managing the Supply Chain.Supply Chains Source: Simchi-Levi (2005).

Customer Expectations  The customer expects a different set of priorities from:       Speed of delivery Delivery reliability Availability from stock Cost Flexibility to customize a product Quality  To remain competitive. a firm has the ongoing goal of meeting customer expectations and maximize value to the customer 22 .

Importance of PP&C    A big chunk of the economy is rooted in manufacturing Global competition has raised standard for competitiveness Operations can be of major strategic importance in remaining competitive 23 .

Decision Support  The PP&C system provides the information upon which managers make effective decisions  The PP&C system does not make decisions nor manage the operations 24 .

. master production scheduling.g. resource scheduling. material and resource requirements planning.Decisions  Time Horizon  Long term (one year or more)  Strategic  e. production tracking  Decisions made at each level affect the others 25 . workforce planning e. inventory management  Medium term (weeks or months)  Tactical   Short term (hours or days)  Operational/Control  e.g.. shop-floor control. capacity/facility planning.g..

Factory Physics 3rd ed.Hierarchical Production Planning Marketing Parameters FORECASTING Product/Process Parameters CAPACITY/FACILITY PLANNING Capacity Plan WORKFORCE PLANNING Personnel Plan Labor Policies AGGREGATE PLANNING Aggregate Plan Strategy Customer Demands WIP/QUOTA SETTING Master Production Schedule DEMAND MANAGEMENT WIP Position REAL-TIME SIMULATION Work Forecast SEQUENCING & SCHEDULING Work Schedule SHOP FLOOR CONTROL PRODUCTION TRACKING Tactics Control 26 Source: Hopp and Spearman (2008). .

(2011). Manufacturing Planning and Control for Supply Chain Management 27 .PP&C Framework  The PP&C system is now usually imbedded in an Enterprise Resource Planning (ERP) system Source: Jacobs et al.

PP&C Framework  Front End  Set of activities and systems for overall direction setting  Demand management  Demand forecasting and order entry Balances marketing/sales plans with available production resources States which end items or product options manufacturing will build in the future Determines the capacity necessary to produce the required products now and in the future  Sales and operations planning   Master Production Scheduling (MPS)   Resource planning  28 .

PP&C Framework  Engine  Set of systems for detailed material and capacity planning  Detailed material planning   Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP-II)  Detailed capacity planning  Capacity Requirements Planning (CRP) 29 .

PP&C Framework  Back End  Set of execution systems  Shop-floor systems  Sequencing and scheduling of orders Provide detailed information to company suppliers  Supplier systems  30 .

the PP&C system must coordinate the planning and control efforts across all companies involved 31 .PP&C Framework  All three phases must be performed  Specific applications reflect particular company conditions and objectives   Different manufacturing process dictate the need for different designs of the PP&C system In supply chain environments.

Weeks trucks. drugs. Months houses. ships Time between successive units 32 . planes. Days TVs.PP&C System Approaches  Depends on the complexity of the manufactured product Project Just-in-Time Repetitive Flow MRP Number of subparts Seconds Examples: Oil. Minutes watches. food.

Evolution of PP&C Systems   The requirements for the PP&C system are not static Changes are required as the following change:     Competitive conditions Customer expectations Supplier capabilities Internal needs   Requires different emphasis on various system modules over time Other factors:   Technology Manufacturing strategy 33 .