What is Production Planning?

• The function of setting the overall level of

manufacturing output (Production Plan) and
other activities to best satisfy the current
planned level of Sales (Sales Plan and/or
Forecasts), while meeting general business
objectives of profitability, productivity,
competitive customer lead times, etc., as
expressed in the overall Business Plan.
 What data is required to construct the
Production Plan
• the first decision to be made is how you are
going to aggregate your products

• consult a Consultant in the field of

manufacturing systems and get an outside
opinion.
 Production scheduling
• . It is a time-phased plan of activities
indicating what is to be done, when, and by
whom and with what equipment
• It seeks to achieve the conflicting objectives of
high efficiency, low inventories and good
customer service.
 Material handling

• What is Material Handling?

Material handling can be defined as the cost
effective conveying and transporting of
materials between different work centres and
stores, using pre-defined and tested methods
and equipment, to achieve the utmost
efficiency and effectiveness
General Production System Model
To be able to demonstrate all the
operations and activities involved
from the acquiring of raw materials
to the distribution of the finished
products, we are going to use the
following general production system
model.
 Production Model
FORECAST DEMAND MPS
·EXPONENTIAL SMOOTHING •BOM
·MOVING AVERAGE
·DELPHI

Demand
MRP/MRPII
·EOQ
·ROP
·LEAD-TIME
·MIN & MAX LEVEL

SUPPLIERS COMPONENT ASSEMBLY

MANUFACTURE

KANBAN LINK KANBAN LINK

CUSTOMER
WAREHOUSE

KANBAN LINK
Detailed Production System Model
 Purpose of the MPS = Balance
BALANCE: Demand with Supply
BALANCE: Actual Orders and Forecasts,
etc.
with Production Capacity
BALANCE: What can be sold
with
What can be produced
 Conflicting Constraints :
Management want return on investment,
productivity, etc.
Marketing want customer service,
flexibility and variety.
Finance want cash flow, profits, etc.
Engineering want new improved state of
the art products.
 Balance
Levelling the Rate of Production
Throughout the Year
(or whatever the length of the Planning
Horizon)
To eliminate seasonal variations (in
demand) and
make effective use of Capacity
 WHAT IS CAPACITY?

“The highest sustainable output rate

which can be achieved with the current
product specifications, product mix,
work force, plant, and equipment”

APICS Dictionary
 MPS- What is it?

Is a detailed plan that states how many

end items (the final product sold to the
customer) will be available for sale or
distribution during specific periods.
Short time frame: 1-3 months.
The plan that drives MRP.
 Inputs to MPS

Market requirements - actual demand

of end items.
Production plan from aggregate
planning.
Resources available – Bill of Materials.
 Production Plan
Rate of Production based on Quarterly
periods.
Aggregate level: i.e. Broad terms.
Product families rather than individual
Products.
Commitment of resources to satisfy
management objectives.
 Bill of Materials

Hierarchical structure
Showing the parent-component
relationship between items (raw
materials, intermediate items, and
products)
At different levels of the manufacturing
process
 What is MRP?

Is a computerized system for managing

dependent-demand inventory, scheduling
replenishment, and meeting demand for end
items as given in the MPS.
It’s purpose is to schedule orders for end
items and the components of those end
items.
We wish to determine when to release an