UMEC204

Production Planning and

.
. B .A
E., M
.
Control
NDI AN , M
A PA
NDR
S U
M . Module
Prepared by:
V
M. Sundra Pandian, M.E., M.B. A.
Assistant Professor, Department of Mechanical
Engineering,
Sri Ramakrishna Institute of Technology, Coimbatore -
 Course Content
Module V
Capacity Planning- Short Term and Long Term Capacity,
.A .
. B
Capacity of Facilities, Break Even Capacity,
.E.,
M Use of Decision
N , M
N DIA
Trees, Aggregate Production
RA PA Planning - Strategies, Methods,
UND
M . S
Master Production Schedule, MRP - Lot Sizing, MRP II, CRP,
ERP.
 Production Planning System
Sales & Marketing

Aggregate Product
Production Planning Design
Aggregate
Planning

.A .
Master Production
M. B
Schedule
. E.,
N , M
Inventory
DI A Capacity
PAN
Operations Control Planning
Production Detailed

Control Planning
DRA Material
S UN Engineering &
M. Requirement
Planning Manufacturing
Database
Purchasing Shop Floor
Department Control

Supplier Factory Customer Base

 Production Planning
Production Planning is defined as :
• what, when and how much to produce
• planning for raw material and resources
.A .
M. B
Deciding - . E.,
Which products to make, N , M
D I A Scheduling –
How many of each, and A
P N
When they should beDR A
completed Delivery and/or
S UN Production of the parts and
M . products:
Planning –
Manpower and
Equipment resources
needed for the production plan.
 Aggregate Production Planning
A plan comprising of:
• Overall demand or customer order
placed for all the products manufactured
in the organization and . B . A .
, M
• The tentative delivery, M.E.
schedule
I AN
A ND
PA
This involvesND R planning the production
.S U
M
output levels for major product lines produced
by the firm.

These plans must be coordinated among

various functions in the firm, including
 Aggregate Production Planning
Co. International Inc.
Quarter 4, 2020
Mod Customers
. A .
el October B
November ., M. December
M. E
N ,
X Y Z XNDIAY Z X Y Z
A PA
N DR
A 2000 1000 S U
M 1000 2500 2000 1500 1500 2000 1500
.

B 700 800 2500 1500 1500 2000 1000 1000 1000

C 1000 1000 2000 1500 1500 2000 1000 2000 3000

 Aggregate Production Planning
XYZ International Inc.

Quarter 2, 2020
Product /
Model .
.B . A
October November December Total
M. E., M
AN ,
Model A NDI
4000 PA 6000 5000 15000
DRA
M. SUN
Model B 4000 5000 3000 12000

Model C 4000 5000 6000 15000

 Master Production Schedule (MPS)
The aggregate production plan must be
converted into a Master Production Schedule
(MPS) which is a specific plan of the.B.quantities
A. to
E. , M
N ,
be produced for the individual M.
models within
DI A
PA N
DRA
each product line.
S UN
M .
This involves creating a total plan for
• Quantity - No. of products / models to be
produced
• Time - Duration (Day, Week, Month or
Quarter),
 Master Production Schedule
XYZ International Inc.
Pdn December.
October, 2017 November, 2017
M. Order 2017
od Lin Qty. W W W W W
W.
WW WW WW WW WW WW WW WW
W .A W W W
e 40 41 42 43 44 45 46 B
. 48
M47
52
. E., 49 50 51

A1 1100 200 200 200 250 250 N ,  M            

A NDIA
A PA
  A2 850 200 200 150
NDR 150 150              
  . S U
M
A3 2050 300 300 450 500 500              
B1 2050 300 300 350 500 600              
B
B2 1950 300 300 400 450 500              

C C1 4000 700 700 850 850 900              

 Material Requirement Planning (MRP)

The Planning technique using computer

translating the MPS of end products
. into a
. B .A
detailed schedule for the raw, ME., M
.
materials and parts
N
IA
ND
PA
used in those end products.
UDRA
N
M. S
It is a computational technique that converts
the master schedule for end products into a
detailed schedule for the raw materials and
 Flow Diagram for MRP
i. Item Master Data
(Part No., Order
qty., Delivery
Provides Schedule)
Parts / ii.Inventory Status
Component (Scheduled receipts,
List as per . A .
M. B on-hand status)
design
. E., iii.Subsidiary Data
MPS N , M
BOM
NIA
D
(P.O, Scrap)

A PA
MRP
NDR
. S U
M
Provides Invento
detailed Purchas ry
production e Order Record
schedule File Order Qty. =
BOM ~
{ Inventory +
Earlier Orders }
 Process of MRP
Sales Orders
Master
Sales Forecast
Productio
n Spare Parts
Schedule Requirement.
CapacityM.B
.A
. E.,
Material N ,M
Planning
Inventory
Requireme NDI
A
Record
ntRA P
A Product
File
U N D BOM &
M. S Planning Design
Other
Design &
Planned Order Mfg Data
Manufacturin
Release
g
i. Purchasing
Engineering
ii.Manufacturin
g
 Material Requirement Planning
Inputs:
• MPS
• BOM
• Inventory Record File
.A .
Outputs: M.
.,
B
M . E
• Planned Order ReleasesN , (Current)
NDIA
• Planned OrderA Releases
PA (Scheduled in future)
NDR
• Order Rescheduling
. S U Notices
M
• Order Cancellation Notices
• Inventory Status Report
• Performance Reports
• Exception report
• Inventory Forecast
 Capacity Planning

Planning aimed at determining the labour and

equipment resources needed to achieve the
master schedule. . A .
. B
M
E. ,
M. N ,
A
NDI the:
It is a system planningPAfor
DRA
• No of machines S UN / equipment needed for
M.
production
• No. of human resources (material handlers,
operator, line supervisor, repair and
maintenance technicians, engineers, etc)
 Capacity Planning
XYZ International Inc. Machine
Quarter 4, 2015 • Automated
Model

Production Lines
Oct Nov Dec Total • Repair Stations
• Testing. Equipment
•M . B . A
A 4000 6000 5000 15000 Jigs & Fixtures
. . ,
E • Tools &
N , M
B 4000 5000 3000 12000
ND IA Consumables
A PA
R
C 4000 5000 6000ND15000
. S U
M

Human Resources
• Operators
• Line Supervisors
• QA Technicians
• Material Handlers
• Repair Technicians
 Capacity Planning – Stages / Types
Capacity Planning
• Determines what labour and equipment
. A .
resources are required to . B
meet
M the
. E. ,
N , M
I A
Das long-term future
current MPS as wellPA N
DRA
S UN
M.
production needs of the firm
• Capacity planning also serves to identify
the limitations of the available
production resources so that an
 Types of Capacity Planning
RCCP (Rough Cut Capacity Planning)
• Done once MPS is established.
• Calculation is made to assess the feasibility of the
master schedule.
. A .
• Such a calculation indicates whether M B
. is a
there
. E. ,
N , M capacity
significant violation of production
ND IA
in the MPS. PA
DR A
CRP (Capacity Requirement
UN Planning)
M . S
• Done when MRP is done.
• Determine whether there is sufficient production
capacity in the individual departments and work cells
to complete the specific parts and assemblies that have
been scheduled by MRP.
 Capacity Planning – Adjustments
Short Term Capacity Adjustments
• Employment levels - Employment in the
plant can be increased or decreased in response to
changes in capacity requirements. . A .
M. B
• Temporary workers - Increases . E ,
. in employment
N , M
level can also be madeNDby IA using workers from a
A PA
temporary agency.DRWhen the busy period is passed
S UN
shall theseM.workers move to positions at other
companies where their services are needed.
• Number of work shifts - The number of shifts
worked per production period can be increased or
decreased.
•Labour Hours - The number of labour hours per
 Capacity Planning – Adjustments
Short Term Capacity Adjustments
• Inventory Stockpiling - This tactic might be
used to maintain steady employment levels
during slow demand periods. . A .
M. B
. E ,
. the product
• Order Blockage - DeliveriesN , M of
DIA
to the customer could PA be delayed during
N
DRA
busy periods. Swhen
UN production resources are
M
insufficient to keep up with demand.
• Subcontracting - This involves the letting of
jobs to other shops during busy periods or the
taking in of extra work during slack periods.
 Capacity Planning – Adjustments
Long Term Capacity Adjustments
•New Equipment Investments - This involves
investing in more machines or more productive
. A .
machines to meet increased future M. B production
. E. ,
requirements, or investing N , M in new types of
NDIA
machines to match A PAfuture changes in product
NDR
design. . S U
M
• New Plant Construction - Building a new
factory represents a major investment for the
company. However. It also represents a
significant increase in production capacity for
the firm.
 Capacity Planning – Adjustments
Long Term Capacity Adjustments
• Acquisition of Existing Companies - This
may be done to increase productive .
. B . A
capacity. However. there are. E. , Musually more
, M
important reasons DIforAN taking over an
PA N
existing company,
DRA for example, to achieve
S UN
M. of scale that result from
economies
increasing market share and reducing staff .
• Plant Closings - This involves the closing of
plants that will not be needed in the future.
Manufacturing Resource Planning (MRP
-II )
Manufacturing Resource Planning II can be
defined as a computer-based system for planning,
. A .
scheduling, and controlling.E., M .
the B materials,
N , M
DIA
resources, and supporting
PA N activities needed to
DRA
S UN
M. at an organizational level.
meet the MPS
MRP II is a closed-loop system that integrates
and co-ordinates all of the major functions of the
business to produce the right products at the right
Manufacturing Resource Planning (MRP
-II )
The term "closed-loop system" means that
MRP II incorporates feedback of data on various
.A .
M. B
aspects of operating performance
. E., for corrective
,M AN
NDI
action. A PA
NDR
S U
M.
 Modules of MRP -II
The various modules in MRP-II are:
•Management Planning
.A .
•Customer Service M. B
. E.,
N , M
•Operations Planning NDIA
A PA
NDR
•Operations
. S U
Execution
M
•Financial Functions
 MRP -II S/Ws
The various s/w packages for MRP-II are:
•Enterprise resource Planning (ERP)
. A .
•Customer-oriented M. B
Manufacturing
. E.,
N , M
DI A
Management Systems PA N(COMMS)
DRA
S UN
•Manufacturing
M. Execution Systems (MES)
•Customer-oriented Management Systems
(COMS)
 ERP
Enterprise Resource Planning (ERP) S/W
displays several approaches to manufacturing
viz., .A .
M. B
. E.,
, M
•Make to Stock DIAN
PA N
DRA
•Design to Order
S UN
M.
•Make to Order
•Assemble to Order
•A modern manufacturing environment must
 ERP

Enterprise Resource Planning (ERP) should

be able to manage an enterprise’s multinational
.A .
M. B
existence with their own .individual
E., laws,
M N ,
N DIA
taxation, etc, underA PaAsingle system.
NDR
. S U
So, ERPM aims at creating an integrated data

model, covering employees, customers,

suppliers, etc.
 Stages in Implementation ERP
• Definition of Scope of the Project
•Identification of Objectives & Deliverables
•Project Organization
o Identifying an exec responsible for ERP
. A .
implementation M. B
. E. ,
N M
o Establishment of senior , management steering
NDIA
committee PA
o Establishment D A
Rof Project team
S UN
o Defining .
M the role of Consultants
•Work Plan development
•Assessment of the business of the company (current
and future)
•Education of key Managers
• Cost / Benefit Analysis
 Modules of ERP
The important modules available in ERP
are:

• Finance Module B . A .
, M.
• Distribution Module . E.
N , M
• Manufacturing Module NDIA
A PA
• Service Module NDR
. S U
M
• Transportation Module
• Process Module
• Project Module
• Tools Module
• Utilities Module
 Modules of ERP
Finance Module

• General Ledger
• Accounts Payable B . A .
, M.
• Accounts Receivable . E.
N , M
• Cash Management NDIA
A PA
• Fixed N R
Assets
D
. S U
• M
Financial Statement
• Budget
• Cost Allocation
 Modules of ERP
Distribution Module
• Item Control
• Cost Accounting
• Purchase Control B . A .
, M.
• Sales Control . E.
N , M
• Sales & MarketingNDIA Information
A PA
• Electronic
NDR Data Interchange
. S U
M
• Replenishment Order Control
• Inventory Control
• Lot Control
• Location Control
• Distribution requirements Planning
 Modules of ERP
Manufacturing Module
• Engineering Data • Repetitive
Management Manufacturing
• Item Control • Shop BFloor
. A . Control
• , M.
Bill of Materials .
• .EHours Accounting
• Routing N , M
DI A • Project Budget
• Master Production PA N • Product
DRA
Schedule S UN Configuration &
.
M Requirement
• Materials Classification
Planning • Project Control
• Capacity Requirement • Quality Management
Planning
 Modules of ERP
Service Module

• Installation Control .
. B . A
• Contract Control E. , M
, M.
• Service Order Control
DIAN
PA N
• Service DAnalysis
RA Control
S UN
M.
 Modules of ERP
Transportation Module

• Employee Control
• Address Control . A .
M. B
,
• Fleet ManagementN, M.E.
• DIA
Fuel ControlPA N
DRA
• Hours
S UN& Expense Control
• M.
Transport Control
• Packing Control
• Warehouse Control
 Modules of ERP
Project Module

• Estimation
• Definition . A .
M. B
• Budget . E. ,
N , M
• Planning NDIA
A PA
• Requirement
NDR
. S U
• Progress
M
• Monitoring
• Invoicing
 Modules of ERP

Other modules of ERP package are:

Material Management
.A .
M. B
Supply Chain Management .E.,
N , M
NDIA
Quality Management
A PA
NDR
. S U
HumanMResource Management
Plant Maintenance
Treasury, etc.
 Modules of ERP
Tools Module
• Software Installation
• Application Configuration
• User Management
• Device Management , M.B.A.
. E.
• Job ManagementAN, M
NDI
• Database Management
A PA
NDR
• Audit
. S UManagement
M
• Text Management
• Menu Management
• SQL Queries
• Application Development &
Customization
 Selection of ERP Package
The several criteria for selecting the ERP
package are:
• Suitability to operations
• Functionality
. A .
• Compatibility M. B
. E. ,
• Availability of technical N , M
support
DI A
A N
RA P
• Time for installation
UND
• Less customization
M . S effort
• Better price
• Consultant recommendation
• Usage in similar industries
• High vendor reputation
• Better sales support
 ERP in India

SAP

PEOPLESOFT

. A .
M. B ORACLE

. E.,
N , M SAGE

NDIA
PA
BUSINESS SOLUTIONS

DRA
S UN JD EDWARDS
M. LAWSON

HYPERION SOLUTIONS

KRONOS

INVENSYS (BAAN)
 Decision Tree Analysis
A decision tree is a schematic model of
alternatives available to the decision maker along
. A .
with their possible consequences. ,TheM. B name derives
. E.
N , M
A
from the tree-like appearance
PANDI of the model.
DRA
The decisionS N
U points are represented by square
M .
nodes.
The branches represents the alternatives.
The branches leaving circular, or chance, nodes
Decision Tree Analysis
Decision Point

.A .
M. B
. E.,
N , M Less preferred
Events DIA
PA N choice
DRA
S UN
M.

Branches -
Alternatives
 Decision Tree Analysis
Problem for Practice:
An organization venturing into two new projects
of production of temperature or pressure
.
sensors
. B .A
with expected returns of Rs. E., M
, M.10,00,000 and Rs.
AN
NDI
4,00,000 respectively. PA
UNDRA The probabilities of success
M. S
of each projects are 50% and 80% respectively.
Use decision tree analysis to decide the best
alternative, if the development costs are Rs.
1,00,000 and Rs. 10,000 respectively.
Decision Tree Analysis

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
Decision Tree Analysis

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
Decision Tree Analysis

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
Decision Tree Analysis

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
Expected Monetary Value (EMV)

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
Decision Tree Analysis

.A .
M. B
. E.,
N , M
NDIA
A PA
NDR
S U
M.
 Decision Tree Analysis
Inference:
It is noted that even though the probability of
success for pressure (0.8) is greater . A .
than that is
. B M
E. ,
M.
temperature sensor (0.5) , DIAN,
N
PA
DRA
the Net profit
. S Uor EMV for the temperature sensor
N
M
is higher .
So the temperature sensor is chosen as the best
alternative.
 Course Content
Module V
Capacity Planning- Short Term and Long Term Capacity,
.A .
. B
Capacity of Facilities, Break Even Capacity,
.E.,
M Use of Decision
N , M
N DIA
Trees, Aggregate Production
RA PA Planning - Strategies, Methods,
UND
M . S
Master Production Schedule, MRP - Lot Sizing, MRP II, CRP,
ERP.