Project work in Production Planning and

Control

Headphones.
By:

Zaid bounajma
Adil Saleem
Shimelis Mekonnen
Michael Seleshi
 Introduction

The project work is to develop a production planning and control system for a manufacturing of a
complex product. We chose to work with production of head phones. Indeed, this is an independent
product and it is a multicomponent product. We will assume that 43.75% of the components are
from suppliers and the rest 56.75 manufactured in house. As we will explain in the first part, our
production system has a manufacturing and assembly section. So in the first part, we will specify
the manufacturing and assembly operations. As you will see, the processes chosen and the
parameters are realistic, i.e., the time parameters, the production volume, the maintenance aspect,
etc, reflect realistic values but all of these were assumed keeping in mind the realistic time based
values.

Manufacturing Of Head Phones:

The headphone manufacturing process that we selected was for the renowned head phone
manufacturer AKG.

AKG Acoustics (originally Akustische und Kino-Gerte Gesellschaft m.b.H., English: Acoustic
and Cinema Equipment) is an Austrian manufacturer of microphones, headphones, wireless audio
systems and related accessories for professional and consumer markets. The company was founded
in Vienna in 1947, and was acquired by Harman International Industries in 1994.

By the time Harman International, an American company, acquired AKG, AKG's United States
subsidiary had been established (in Los Angeles in 1985). AKG Acoustics USA, still
headquartered in the San Fernando Valley, also houses regional offices for Crown Audio, another
Harman Industries subsidiary.
 Parts of a Typical AKG headphone:

1. Back Plates with meshing area:

This is made with the help of an injection molding machine. The machine also has a meshing area
for allowing sound to pass through.

2. Plastic Housing with magnets:

This housing is also made by using injection molding. It is also used to house magnets and
speakers.

3. Voice Coil:

Voice coil is Copper wire of the thickness of hair. This Copper wire is wound in the shape of a
coil and then this coil is joined with the help of a glue to make it strong.

4. Diaphragm:

It is a plastic membrane that is used with the voice coil. This membrane is made by pressing and
punching a plastic membrane.

5. Curved wire with Plastic Clips:

These curved wires with plastic covers and clips rest on the head and with them also the adjustable band is
attached.

6. Connector:

It is used for strain relief and for holding audio cable.

7. Adjustable Band:

This band is used to change the width and other dimensions of head phones so that can fit on various sizes
of heads.
 8. Decorative Ring:

This ring is just for decoration purposes and it is also made by injection molding machine.

9. Speaker Mechanism:

The speaker is purchased and is fitted in the plastic housing with magent. It transmits the sound.

10. Plastic Brackets:

These brackets support the speakers in the plastic housing.These are also made by injection
molding.

11. Plastic Rings with protectors:

These rings are used to protect the surface of speakers from damage.

12. Microphone:

Microphone is made by making the outer casing of wire with injection molding and by using a
wire that is drawn by help of drawing machine. It is fitted in 2/3 of head phones according to our
demand.
Parts Manufactured:

Back Plates with meshing area

Plastic Housing with
Voice Coil
Decorative Ring
Plastic Brackets
Plastic Rings with protectors
Microphone
Head band
Curved wire with Plastic Clips

Parts Purchased:

Magnets
Connector
Diaphragm
Speaker Mechanism
Stamps and company logo
Adjustable Band of leather
Copper for Wires

Parts Percentage Manufactured: 0.5625

Parts Percentage Purchased: 0.4375
 Machines Used:

1. Injection Molding for Back Plates (INJ 1)

2. Injection Molding for Plastic casing(INJ 2)

3. Pressing Machine for Diaphragm

4. Punching Machine for Diaphragm

5. Drawing Machine for Copper

6. Winding Machine for Copper wire

7. Bonding Machine for voice coil

8. UV light curing machine

9. Audio Testing Station

10. Bending Machine for Curved Wires

11. Soldering Station

12. Injection Molding Machine for protective ring, brackets (INJ 3)

 Manufacturing Criteria:

We intend to manufacture head phones in a flow line where 2 out of every three headsets

should possess microphone. So in this fashion we create a variance of 50 percent. The

working time available in 24 hours is 8 hours or 480 minutes. The machine downtimes and

work time between failures and scheduled downtimes are all considered separately for each

machine used in the process.

 Manufacturing Process:

1. Manufacturing of Back Plates:

During the first process the back plates are manufactured. These plates are manufactured with the

help of injection molding machine INJ 1.

These back plates also have a meshing area for sound transmission.

2. Manufacturing of Casing:

In this step the plastic casing or housing is manufactured with the help of machine INJ 2.

Magnets from the stock are also added to the this casing.

3. Manufacturing Voice Coil:

In this step a diaphragm is first manufactured with the help of a plastic membrane and then a

copper coil is added and attached to this diaphragm.

Also in this step a UV curing machine is used to activate a glue to attach the coil with the

diaphragm.

4. Audio Testing:

In this step the voice coil is joined with diaphragm and then placed in the plastic casing with magnets
and after this testing iof sound quality and frequency calibration is done.

5. Formation of intermediate Casing:

After this speakers and connectors are added to the plastic casing with voice coil to make an
intermediate casing.
 6. Formation of head band:

Also at the same time a head band is formed by manufacturing and assembling wires clips and adjusting
bands.

7. Assembling Ear Casing:

In this step the intermediate casing is assembled and combined with the head band but also a plastic
protector is added.

8. Manufacturing of microphone:

In this step microphone is manufactured with the help of an injection molding machine and a drawing
machine for copper wire that was used previously. After this these microphones are attached to 2/3 of
the pieces and rest are left without it.

9. Manufacturing Plastic Protective Ring and Brackets:

In this step plastic brackets and protective rings are manufactured.

10. Batching, Soldering and Top Cover Addition:

In this step batching of headphones with microphones and headphones without microphones is done.
After this soldering operation is performed on every head phone and then a top protective cover is
added on every head phone.

11.Products:
Finally we, receive products that are complete with respect to manufacturing.
 Historical Market Data
Having access to real and accurate historical market data is not easy when you are not working within
the company. For this simple reason we used supposed values under the guidelines given in the project
outlines. These are:

Trend in data
Cyclic data pattern

For trend in data we assumed that the mean of each year was increasing at the rate of 10 percent. We
show the data for four years in our tables and this will show a trend of 10 percent increase.

For cyclic data pattern during the year we apply the assumptions that the sale of head phones decrease
during the last months (11th and 12th)of the year and then increases again in 6th, 7th and 8th month of the
year. This increase is by 8 percent till the month of august. Furthermore this was kept in mind that
during the period of June, July and August most companies introduce their new models so therefore the
sales will increase.

Further variation is added to the data by not using the exact values that we get from data trends and
cyclic data patterns.

Let n be the present year i.e 2010.

The last four years will be:

n-1,n-2,n-3,n-4.

The historical data for the last four years is:

Month n-4 n-3 n-2 n-1

January 1805 2005 2228 2475
February 1802 2010 2230 2456
March 1800 2003 2225 2490
April 1815 2020 2220 2467
May 1810 2007 2237 2470
June 1955 2168 2416 2667
July 2112 2340 2609 2880
August 2280 2528 2818 3111
September 1800 2003 2195 2425
October 1802 2007 2200 2430
November 1730 1857 2110 2370
December 1725 1853 2105 2355
Total 22436 24801 27593 30596
When we make a graph of this data we clearly see a pattern and cyclic repetition in the demand of the
head phones over last four years.

3500

3000

2500
2006
2000
2007
1500 2008

1000 2009

500

0
0 2 4 6 8 10 12 14

The real demand for the present year (2010)that was available on AKG website is:

Month Jan Feb March Apr May June July Aug Sep Oct Nov Dec
Demand 2755 2765 2740 2780 2767 2980 3200 3460 2787 2803 2741 2743
 Forecasting
Method 1: Simple Moving Average System

The 1st forecasting method used is the simple moving average method. Its a time series method used
to estimate the average of a demand time series by averaging the demand for the n most recent time
periods.

The following formula was used to calculate the forecasted value

sum of last n demands Dt+Dt1+.Dtn+1

+1= =
n n
Where,

= Actual demand in period t

n = Total number of periods in the average

+1 = Forecast for period t+1orcs

By u
Month Average
Jan 2128.25
Feb 2124.5
By Mar 2129.5
Apr 2130.5
May 2131
Jun 2301.5
Jul 2485.25
Aug 2684.25
Sep 2105.75
Oct 2109.75
Nov 2016.75
Dec 2009.5

By using the formulae stated above we get the values shown in the above table for 2010.
Method 2: Exponential Smoothing:

The simplest form of exponential smoothing is given by the formulae

A = D +(1-)(A1 +T1 )

T = (A A1 )+(1- )(T1 )

F = A +T

Where
A =
T =

= Smoothing Parameter for average

= Smoothing Parameter for average

where is the smoothing factor, and 0 < < 1.

Assume

= 0.5

= 0.5

Now we get that for the year 2010 forecast:

A = 29270

T = 3700

F = A + T

=
 Similarily we use the above mentioned formulae to get the values for respective months:

Month Jan Feb March April May June July Aug Sep Oct Nov Dec

Forecast 2701 2717 2745 2765 2739 3115 3360 3633 2905 2918 2837 2857

Method 3: Nave Forecast:

The third method that we tried for forecasting was a relatively simple method known as the nave
forecast. The nave forecast method is a time series method in which the forecast for the next
period equals the demand for the current period. According to the nave forecast method the
forecasted value of head phones would be equal to the demand of 2009. But since we follow a
trend pattern along with a trend the nave forecast method cannot be applied to our system and
hence we would not consider the results produced by this method suitable for forecasting the
demand for 2010. The results which we achieved from this method along with the graph are shown
below.

3500

3000

2500
2006
2000 2007
2008
1500
2009
1000 2010

500

0
1 2 3 4 5 6 7 8 9 10 11 12

As we can see in the graph the forecast for 2010 is same as the values for 2009.So after
seeing all these values we select method of Exponential Smoothing.
 Capacity Planning
For making our capacity planning calculations more realistic and accurate we used the
maintenance and down times that we used in the Extend model of our production line in the last
semester.

The values of maintenance time and down times along with the process times that each machine
utilizes are given in the following tables:

Process Times

The Process times are mentioned in the following table:

Process Time(min)
1 Back plate injection molding 0.5
2 Casing manufacturing 0.5
3 Pressing 0.25
4 Punching 0.2
5 Drawing 0.5
6 Winding 0.5
7 Voice coil 0.1
8 UV light curing 0.5
9 Audio Testing 0.3
10 Curving 0.3
11 Ring manufacturing 0.5
12 Soldering 0.2
Maintenance and down times for machines:

Machine Maintenance time per year(hrs) Down Time per year (hrs)
Inj 1 24.31 8.1
Inj 2 36.4625 16.205
Pressing M/c 18.23 5.065
Punching M/c 18.23 16.205
Drawing M/c 52.089 12.154
Winding M/c 30.385 8.103
Voice Coil 15.223 6.077
UV light Curing 24.308 10.1287
Audio Testing 12.154 8.103
Curving 24.308 6.766
 Ring making 24.308 8.103
Soldering 22.789 13.53
Total Time(hrs) 302.7965 118.5397

Parameters used:

Total Hours in a year is 8760 hr

Number of hours the process needs per product is 4.35 min 0.0725
Preventive maintenance is 302.8 hr
Down time is 118.53 hr
Daily operations in the factory=1 shifts
Time per shift=8 hr
Interval between two working days=16 hr
Average working hours in a day=8 hr
Total Hours availble in a year =172800 min =2880 hr

Total Hours availble in a year 2880

Design Capacity = = = 39724 units
Proceesing time per product product 0.0725

Total availble hr.preventive maintenance 2880302.8

Effective Capacity = = = 35548
Proceesing time per product product 0.0725

Total time preventive maintenance down time 2880 302.8 118.53

Actual Capacity = =
Proceesing time per product product 0.0725

= 33913 units

Actual Capacity 33913

Utilization = = = 85.37 %
Design Capacity 39724

Actual Capacity 33913

Efficiency = = = 95.4 %
Effective Capacity 35548
 So our results for the capacity planning are:

units
35548 units
33913 units
85.37 %
95.4 %

Takt Time:

As we know Takt time is:

total available time 172000

Takt Time = = = 5.07 min or 0.084 hours
Desired output rate 33913

We also build a table to tell the takt time for the individual variants involved in our head phone
manufacturing.

Variants Desired % Theoratical Output Takt Time(min/unit) Actual Output Takt Time(min/unit
With
Microphone 66.67% 22382 7.685 22363 7.27
W/o
Microphone 33.33% 11531 14.99 11550 14.96
 Aggregate Planning
To be able to perform the aggregate planning we needed the different information from all the different
processes. We need different kind of costs and their calculations. Since these costs are company secrets
so we assume these costs to be a realistic value. These costs include:

Production costs for head set:

1. Regular = 25 kr
2. Overtime = 32 kr
3. Subcontract = 35 kr

Inventory Costs = 2 kr per piece per month

Back order = 7 kr per month

We will also consider the fact now that aggregate production plan of our head phone
manufacturing is based on a level production (steady production level) that avoids
overtime and subcontracting but allow backlogs.

And the forecast is shown below:

Month Forecast Production Plan

1 2604.25 2434
2 2600.5 2434
3 2605.5 2434
4 2606.5 2434
5 2607 2434
6 2777.5 2434
7 2961.25 2435
8 2910.25 2435
9 2581.75 2435
10 2585.75 2435
11 2492.75 2435
12 2485.5 2435

In graphical form we can represent it as:

3500

3000

2500

2000
Fore Cast
1500 Production plan

1000

500

0
1 2 3 4 5 6 7 8 9 10 11 12
 In the aggregate plan shown below we have shown all the data and calculations done in excel
sheet attached hereby.

Month Jan Feb March April May June July Aug Sep Oct Nov Dec Total

Forecast 2605 2600 2606 2607 2608 2771 2961 2910 2582 2586 2493 2489 31818
Production
Regular 2651 2651 2651 2651 2651 2651 2652 2652 2652 2652 2652 2652 31818
Overtime 0 0 0 0 0 0 0 0 0 0 0 0
Sub Cont 0 0 0 0 0 0 0 0 0 0 0 0
F-P 46 51 45 44 43 -120 -309 -258 70 66 159 163
Inventory
Beginning 0 46 97 142 186 229 109 0 0 0 0 0
Ending 46 97 142 186 229 109 0 0 0 0 0 0
Average 23 71.5 119.5 164 207.5 169 54.5 0 0 0 0 0
Backlog 0 0 0 0 0 0 200 458 388 322 163 0
Cost
Production
Regular 66275 66275 66275 66275 66275 66275 66275 66275 66275 66275 66275 66275
Overtime
Sub Cont
Inventory 46 143 239 328 415 338
109 0 0 0 0 0
Backlog 1400 3206 2716 2254 1141
Total 66321 66418 66514 66603 66690 66613 67784 69481 68991 68529 67416 66275
Total Cost of our plan = 807635 kr

Master Production Schedule (MPS)

 Master Production Schedule:

The Master Production Schedule (MPS) indicates the quantity and timing of planned production,
taking into account desired delivery quantity and timing as well as on-hand inventory.
Master scheduling has three inputs:
1. The beginning inventory, which is the actual quantity on hand from the previous period.
2. Forecasts for each period of the schedule
3. Customer orders which are quantities already committed to customers.

For example for our case we consider the MPS for the months of January, February, March,
April.

At the beginning of the first week of the month we assume to have a beginning inventory level of
800.

January February March April

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Forecast 650 652 650 652 650 652 650 652 650 652 650 652 650 652 650 652
CO 661 642 600 676 635 600 637 677 679
PI 139 137 137 135 135 133 133 131 105 103 103 101 101 99 72 43
MPS 650 650 650 650 650 650 650 650 650 650 650 650 650 650 650

BOM
Bill of Materials corresponds to a list of the raw materials, sub-assemblies, intermediate assemblies, sub-
components, components, parts and the quantities of each we needed to manufacture our end product
which is the head phone in this case.

Level Level Level

1 2 3
With
Microphone
Microphone
W/o
Microphone
Intermediate
Casing
Adjustable
band
Head Band

Curved Wire

Plastic rings

Diaphragm
Head Phone
Voice Coil

Speakers

Plastic
Housing Magnets

Back Plates

Sr Part Quantity per Head Quantity per order

No Phone
1 Back Plates with meshing 4 2000
area
2 Plastic Housing 2 1000
3 Voice Coil 2 1000

4 Decorative Ring 2 1000

5 Plastic Brackets 4 2000
6 Plastic Rings with 2 1000
protectors
7 Microphone 1 500
8 Head band 1 500
9 Curved wire with Plastic 2 1000
Clips
10 Magnets 2 1000

11 Diaphragm 2 1000

12 Speaker Mechanism 2 1000

13 Stamps and company logo 2 1000

14 Adjustable Band of 1 500

leather

15 Copper for Wires In Lenght

16 Connector 2 1000
EOQ.

Purchase
cost Ordering cost EOQ

Component Price nr

Magnets 0.5 2 2 36.83

Connector 0.5 2 2 36.83

Diaphragm 1 2 3 31.89

Speaker Mechanism 0.6 2 2 33.66

Stamps and company logo 0.4 2 2 41.17

Adjustable Band of leather 0.7 1 2 31.12

Copper for Wires 1 1 3 31.89

Back Plates with meshing area 0.3 4 2 47.54

Plastic Housing with 1 2 3 31.89

Voice Coil 1 2 3 31.89

Decorative Ring 1 2 3 31.89

Plastic Brackets 1 2 3 31.89

Plastic Rings with protectors 1 2 3 31.89

Microphone 2 1 4 26.04

Head band 1 1 3 31.89

Curved wire with Plastic Clips 2 2 4 26.04

Formula:

Suppose annual requirement (AR) = 33913 units

Cost per order (CO)
Cost per unit (CU)
 Carrying cost %age (%age of CU) = 0.02
Carrying cost Per unit = $0.16

Economic order quantity =

Kanban System .

Kanban , also spelled kamban and literally meaning "signboard" or "billboard", is a concept related to
lean and just-in-time (JIT) production. The man credited with developing Just-in-time, kanban is one
means through which JIT is achieved.

Kanban is not an inventory control system. Rather, it is a scheduling system that tells you what to
produce, when to produce it, and how much to produce.

We decided that our kanban system implementation is a "three-bin system" for the supplied parts (where
there is no in-house manufacturing) one bin on the factory floor (demand point), one bin in the factory
store and one bin at the suppliers' store. The bins have a removable card that contains the product details
and other relevant information the kanban card. We designed the following Kanban card. It includes
all the needed informations such as the part name, the category, a product photo(permitting to see fast if
the card is not the right one or to know which product is in the bin when products are piled up), the
location, the cycle time, the quantity (with minimum and maximum corresponding to the batch) and the
bar code.

When the bin on the factory floor becomes empty, i.e, there is demand for parts, the empty bin and
kanban cards are returned to the factory store. The factory store then replaces the bin on the factory floor
with a full bin, which also contains a kanban card. The factory store then contacts the suppliers store and
returns the now empty bin with its kanban card. The supplier's inbound product bin with its kanban card is
then delivered into the factory store completing the final step to the system. Thus the process will never
run out of product and could be described as a loop, providing the exact amount required, with only one
spare so there will never be an issue of over-supply. This 'spare' bin allows for the uncertainty in supply,
use and transport that are inherent in the system.

When a worker takes a bin to work with the containing products, he has to put the Kanban card on a
signboard so everybody can know the used bin.
These Kanban signboards are either on the bin or on a very visible board or Heijunka box such as below:
 The Kanban are placed so everybody know what to do
The worker takes the Kanban and can produce the amount demanded on the Kanban signboard

Calculate the Kanban quantity

This step is considering the varieties that exist in the production, quantities and variation of lead time and
fluctuations in demand. More simply this step is going to calculate the number of Kanban that has to be
used in a certain area.

K=dL(1+S)/C

d=Production requirements or the amount needed to be produced

L= Lead time for the container which means the production time for the part

s=safety coefficient that is used to smooth the fluctuations of demand

C=container capacity
Result : K=50

10 Conclusion

We learned a lot in this project since we used did very different tasks. We used and compared three methods
for the demand forecasting. Then, we made an aggregate planning. Then, we create the MRP after having
designed batches and lead time. We chose the CODP and finally designed a Kanban system. Finally, we
added a product variant and adjusted the process.

These methods can definitely be reused for our following professional life. Indeed tools like MRP and
Kanban are very commonly used in big industries.
References:

www.Wikipedia.com

www.akg.com

http://www.itl.nist.gov/div898/handbook/pmc/section4/pmc43.htm

Operations Management Fifth Edition Nidel Slack, Stuart Chambers, Robert Johnston

KTH Course MG2203 study materials Lean elements, tools and techniques Jerzy Mikler