ERP Production Planning and Control

Introduction
With the purpose to be competitive
small and mid-sized companies must optimize
their production processes, and that's why ERP
production planning and control (PPC) is used
by the modern production companies.
 ERP/PPC system enables efficiency,
coordination, and the leveraging of production-
related data to drive improvement.
ERP Production Planning and Control System in
modern Corporations.
CUSTOMER (An MRP based Framework)
DEMAND
CAPACITY PLANNING
MANAGEMENT TECHNIQUES
AGREGGATE RESOURCE
DEMAND
PRODUCTION REQUIREMENT
MANAGEMENT
PLANNING PLAN

MASTER
ROUGH CUT
PRODUCTION
CAPACITY PLAN
FORECAST SCHEDULE

MATERIALS CAPACITY
REQUIREMENT REQUIREMENT
PLANNING PLANNING

INPUT/OUTPUT
CONTROL
PRODUCTION
ACTIVITY
CONTROL
OPERATION
SEQUENCING

MARCO A. FERNANDEZ SALAS

 MRP SYSTEM

MASTER
PRODUCTION
SCHEDULE

INVENTORY MRP BOM

ORDER ORDER PLANNED

RELEASE REESCHEDULING ORDERS
 Production planning and control is an
important task of Production Manager. It
has to see that production process is
properly decided in advance and it is
carried out as per the plan.
Production planning and control (PPC) is a
work process which seeks to allocate
human resources, raw materials, equipment
and machines in a way that optimizes
efficiency.
 PPC is used by all kind of organizations
to make a logical plan for work performed
by computers, machines and humans.
 Production planning is the function of looking
ahead, anticipating difficulties to be faced and the
likely remedial steps to remove them.
 It may be said to be a technique of forecasting
ahead every step in the long process of production
trying to complete the operations at maximum
efficiency.
 Production control, guides and directs flow of
production so that products are manufactured in a
best way and conform to a planned schedule.
 Keep in mind !!!
Control facilitates the task of manufacturing and see
that everything goes as per the plans.
Production planning and control involves generally the
organization and planning of the manufacturing
process. Specifically, it consists of the planning of the
routing, scheduling, dispatching and inspection, co-
ordination and the control of materials, methods,
machines, tooling and operating times.
How does the PPC process work?
Aggregate Production Planning
 The “Aggregate production planning” refers to
the process of deciding the overall quantities of
products to be produced during a
period of time .
 It usually covers a period of 2 to 18 months
depending on the company's ability to project
demand.
 Aggregate Planning is about translating
demand forecasts into production and capacity
levels over a fixed planning horizon.
Master Production Schedule
The MPS (master production schedule), is a
centralized source telling you what you need
to produce, how much you need to produce,
and when you need to produce it.
Master Production Schedule follows aggregate
planning. It express the overall plans in terms
of specific end items or models that can be
assigned priorities.
It is a schedule showing week by week how
many of each product must be produced
according to customer orders and demand
forecasts.
The MPS is an important link between
marketing and production.
 MPS functions.

The main functions of MPS are:

To translate aggregate plans into specific end items.

(Aggregate plan determines level of operations that
tentatively balances the market demands with the
material, labor and equipment capabilities of the
company).
 To evaluate alternative schedules.
(Master schedule is prepared by trial and error. Many
computer simulation models are available).

To generate material requirement.

(It forms the basic input for material requirement
planning (MRP)).
 Generate capacity requirements:
(Capacity requirements are directly derived from MPS.
Master scheduling is thus a prerequisite for
capacity planning).

Facilitate information processing:

(By controlling the load on the plant. Master schedule
determines when the delivery should be made).
 Effective utilization of capacity:
(By specifying end item requirements schedule
establishes the load and utilization requirements for
machines and equipment).
 MASTER
PRODUCTION
SCHEDULE

MATERIALS
INVENTORY
REQUIREMENT BOM
PLANNING

ORDER ORDER PLANNED

RELEASE REESCHEDULING ORDERS
Material requirement planning is a system of planning
and scheduling the time phased material requirements
for releasing materials and receiving materials that
enable the MPS to be implemented.
“Materials requirement planning” refers to the
basic calculations used to determine the
components required from end item
requirements.
 “MRP is a technique for determining the
quantity and timing for the acquisition of
dependent demand items needed to satisfy the
MPS requirements.”
Objectives of MRP
 MRP determines how many components are
required and when they are required in order to
meet the master schedule.
MRP identifies materials, component quantities
and timings when they are needed.
MRP provides a close coordination among
various work centers and help to achieve
uninterrupted flow of materials.
 Take a note !!

The inputs to the MRP system are:

(1) A master production schedule, (2) An inventory

status file and (3) Bill of materials (BOM).