Supply Chain Management

Production Planning
Presented By :

Farhan Ahmed
Today discussions
 Supply Chain Strategy
 Master Scheduling
 Capacity Planning
 Shop Floor Control
 Key Success Factors
 Questions
SUPPLY CHAIN
STRATEGY
Supply Chain Strategy

Maximize
customer Minimize
service Inventory

Minimize
Operating
Costs
Supply Chain strategy

PRODUCTION PLAN

FINISHED GOODS SALES PLAN

INVENTORY
Production Planning
• What product does the market want ?
• How much of which products should be produced
• and by when ?

• This activity includes the creation of Master production

schedules that take into account plant Capacities ,
workload balancing, Quality control and Equipment
maintenance.
MASTER SCHEDULING

The Master of all Schedules

What is the Master schedule ?

The anticipated build schedule of those items

(products) assigned to the Master scheduler.

The Master scheduler maintains this schedule and in

turn, it becomes a set of planning numbers that drive
material requirements planning.
What is the Master schedule ?
 Its represents what the company plans to produce
expressed in specific configurations, quantities and
dates.

 It is not a sale forecast , the master production

schedules must take into account the forecast, the
production plan, and other important consideration
such as backlog, availability of capacity , management
policy and goals, etc.
Master Schedule
Sale & Operation 
Planning

Master
Scheduling

Bills Of Material Req. Inventory

Material Planning Records

Material
Scheduling
Order Types
Planned Orders:
• System suggested replenishment orders and not yet accepted by the planner. As
requirements change, planned order dates and quantities are automatically
adjusted in the system.

Firm Planned Orders:

• No longer controlled by the system because they have been accepted, changed
or created by the master scheduler planner. Quantities and dates are frozen.
Cannot be changed by the system and require manual intervention to make
changes.

Released Orders:
• Open orders or Shop orders issued to production floor.
Planning Horizon (MPS Time Fences)
MPS Horizon is the user defined period of time that is considered firm or
frozen and has following attributes:

– Allow Planner to stabilize production plan in MPS

FIXED TRADING OPEN

Next 4 weeks Weeks 5 - 12 Months 4 - 24
Shop Orders Firm Planned Orders Planned Orders
Firm Planned Orders

Planning time fence

Increasing Stability
Scheduling

Establishing the timing of the use of equipment,

facilities and human activities in an organization

Effective scheduling can yield

• Cost savings

• Increases in productivity
Managing Change - Supply Time Fences
EMERGENC TRADING AREA ADDING &
Y CHANGES CHANGIN
G
STABILISE CAPACITY FIRM
MATERIAL FUTURE
Release ORDERED PLANNING
Planning
Today 24 months
Time Fence Time Fence

COST

TIME
TODAY
Impacts on Master Schedule
Product Oversell Inventory adjustments

Product Withdrawal Changes to planning

parameters
Product Launch
Changes in business policy
Abnormal Demand
Seasonality
Reduced / Cancelled Orders
Execution issues
Changes in supply
S & OP decisions

ALL changes to the Master Schedule will be managed

Master Schedule Conformance

Measures the effective completion of Master Schedule

Conformance

Total scheduled orders delivered on time

Total orders due in the period measured

Tolerance : NLT 95%

CAPACITY PLANNING
CAPACITY
“A MEASURED ABILITY TO ACCOMPLISH WORK”.

CAPACITY CONTROL :
“The process of measuring production Output and
comparing it with the capacity requirement plan,
determining if the variance exceeds pre-established
limits, and taking corrective action to get back on plan if
the limits are exceeded”.
LOAD
This is the amount of scheduled work ahead of a
manufacturing facility, usually expressed in terms of hours of
work of production, or a measured volume of work to be
done. It must be stated in same units of measure.

WORK CENTER:
A work center is a place where manual or machine work is
performed. If the work center contains more than one work
station, then any one of the work stations must be capable of
performing the assigned work or task.

Work
Input Output
Center
STANDARD/ VALIDATED HOURS
The time in hours required to complete a task. It is the most
common unit of measurement for capacity.

MOVE TIME: The time required to move processed material

to the next work center.

QUEUE TIME: The time an arriving shop order or production

order must normally wait at the work center before being
processing through the operation.

Work Center # 1 Work Center # 2 Output

The Lead Time Syndrome
ORDERS IN

LT

CAPACITY

WORK OUT
Capacity Planning in MPS Systems
Long Range Production
Planning
Resource
Planning Demand
Management
Rough Cut
Master
Capacity
Production
Planning
Scheduling

Medium Range
Capacity
Req’ts Detailed
Planning Material
Planning
Short Range
Finite
Loading
Input / Shop Floor Vendor
Output Systems Systems
Analysis
 Rough cut capacity Planning :
ROUGH CUT
CAPACITY MPS
Addresses the questions : PLANNING

” Do we or will have enough

REVIEW WORK LOAD
equipment, enough people , ON CRITICAL WORK
CENTERS

enough materials, and

enough time to meet the
sales and operational plans PROBLEM
YES

as currently written?” NO

RESOURCE
REQUIREMENTS
REPORT

YES
PROBLEM
Bottleneck
A bottleneck is a task or machine speed that limits and therefore
determines the capacity of an entire process – such as the
slowest machine on the line.
Where is the bottleneck?

Mach 1 Mach 2 Mach 3 Mach 4

160 100 220 600

Units/Min Units/Min Units/Min Units/Min

Have less capacity than prior or following work centers

 INITIAL LOAD PROFILE

Normal
Hours of
capacity
capacity

1  2   3   4    5     6

Time (weeks)
 ADJUSTED LOAD PROFILE

Work an 
extra shift
Overtime Push back
Hours of
capacity Pull ahead
Push back

1  2   3   4    5     6

Time (weeks)
Shop Floor Control
 FLOW DIAGRAM SFC
Production
Scheduling
(Weekly)

Shop Packet
Printing on Daily Basis

•Data collection
(Operation input )
• Monitoring of dispatch list on daily
basis YES
•Create ADR (if required)

Control / Problem
Feed back Correctable

Past due
Order NO
Completed

YES

Order Review/
Disposition
SHOP FLOOR CONTROL STEP BY STEP
Shop floor Planner review the back log with Master Scheduler &
adjust in next week plan.

Master scheduler converts the firm order into the shop order.

Shop floor planner Release shop order as per plan.

Section Managers review the dispatch list on daily basis.

If any change (ADR) recommended by Sectional Manager

changes incorporated in the Dispatch list

 ADR raise by RMS manager in case of non-availability or delay in

issuance of the material.
 Key Success Factors
Supply Plan RCCP is a key to Supply plan achievement.
Achievement
Plan execution Master scheduler and Capacity planner are key player for MPS
execution.
Balance plan Detail capacity planning against individual work centers is
essential to balance the Input and Output of work centers.
Cost Impact Cost impact of different products mix in view of different work
centers.
Shop Floor Use of dispatch list of individuals work centers.
control
Preventive Use of preventive maintenance schedule in conjunction with
maintenance capacity planning.

Q.A. integration Integrate QA with Supply Chain e.g. Dispatch list.

Plan Accuracy Accurate capacity planning as a result of work center wise

calendar maintenance.
KEY FACTORS

 Lead time is sum of all move, process,queue and Q.A.

testing times at all work centers listed on the routing.

 Standard hours based on demonstrated Out put.

 Engineering schedule maintenance is a part of Master

scheduling, capacity planning and shop floor control.