Introduction to

Production Planning and Inventory Control

I Nyoman Pujawan, Ph.D, CSCP Professor of Supply Chain Engineering Department of Industrial Engineering - ITS

Tujuan Instruksional
Mampu menjelaskan peran PPC diantara fungsi-fungsi lain pada organisasi suatu perusahaan manufaktur serta konteksnya dalam suatu supply chain Mampu menjelaskan perbedaan fungsi PPC untuk perusahaan manufaktur dengan karakteristik sistem produksi berbeda (misalnya MTS Vs MTO) Mampu menjelaskan kerangka umum PPC dan menghubungkan keterkaitannya mulai peramalan permintaan sampai pengendalian aktivitas produksi Mampu menggunakan metode-metode dasar peramalan permintaan dan mengukur akurasinya Mampu menggunakan berbagai metode dan teknik untuk membuat perencanaan produksi, termasuk untuk merencanakan kebutuhan bahan dan kapasitas Mampu menggunakan berbagai metode dan menghubungkan keterkaitannya untuk pengendalian aktivitas produksi Mampu melakukan analisis terhadap berbagai isu praktis PPC, termasuk menghubungkan keterkaitannya dalam lingkup rantai pasok secara terintegrasi dengan menggunakan berbagai macam metode PPC

Text Books
Manufacturing Planning and Control Systems for Supply Chain Management (Fifth Edition, 2005), by Thomas Vollmann, William Berry, Clay Whybark, and Robert Jacobs. Production and Operations Analysis (3rd Edition), by Steven Nahmias, Irwin, Homewood, Illinois (1997).

Production and Inventory Management (1991) by Donald W. Fogarty, John H. Blackstone, and Thomas R. Hoffmann

Course Outline
Introduction to PPC / PPIC Demand forecasting Sales & Operations Planning Independent demand inventory models (1) Independent demand inventory models (2) MRP Capacity planning Production Activity Control, including Scheduling and sequencing Introduction to ERP PPC in the context of SCM

Pertemuan
1.1 1.2

Materi
Pengantar PPIC 1 (Daya saing industri manufaktur, Product Positioning Strategy, Process Positioning Strategy) Pengantar PPIC 2 (Hakekat PPIC, Sistematika Proses PPIC, Struktur Organisasi)

Referensi

2.1
2.2 2.3 3.1 3.2 4.1 4.2 5.1 5.2 6.1 6.2 7.1 7.2 8.1 8.2 9.1 9.2 10.1 10.2 11.1 11.2 12.1 12.2 13.1 13.2 14.1 14.2 15.1 15.2 16.1 17.1 17.2

Quiz 1 dan pembahasan untuk memperdalam konsep pertemuan minggu 1

Demand forecasting 1 (Konsep, Klasifikasi, Moving Average, SES) Demand forecasting 2 (Model Holt, Model Winter, Forecast Accuracy, Tracing Signals) Quiz 2 dan Pembahasan untuk pendalaman konsep dan skills Aggregate Planning 1 (Konsep dan Metode Chase, Metode Level) Aggregate Planning 2 (Metode Mix dan Latihan) Master Production Schedule Quiz 3 dan pendalaman untuk Aggregate Planning dan MPS MRP (Konsep, Input, Output, Proses) MRP (Proses MRP Lanjutan) MRP (Proses MRP Lanjutan) Inventory 1 Inventory 2 Inventory 3 Quiz 4 MRP dan Inventory Mid Terms Mid terms Remedy untuk mahasiswa yang kurang perform Capacity Planning (Konsep, RCCP) Capacity Planning (CRP) Quiz 5 Capacity Planning dan diskusi pendalaman Production activity control Production activity control Quiz 6 production activity control dan pendalaman JIT Presentasi studi kasus Presentasi studi kasus Tutorials

Outline for Today

Competitive Advantage of Manufacturing Industry Product Positioning Strategy Process Positioning Strategy

Beberapa Pertanyaan
Apa peran industri manufaktur dalam kehidupan kita? Apa yang membuat sebuah industri manufaktur unggul dalam persaingan?

Competitive objectives
Doing things RIGHT
Gives Gives

a QUALITY advantage
a SPEED advantage a DEPENDABILITY advantage a FLEXIBILITY advantage a COST advantage

Doing things FAST

Doing things ON-TIME CHANGING what you do Doing things CHEAPLY

Gives Gives

Gives

Order winning and qualifying objectives

Order winners
Directly and significantly contribute to winning the business

Order qualifiers
Qualifying levels of performance below which, orders will be lost

Less important factors

neither order-winning nor qualifying. Do not affect customers in any significant way

Order winners and qualifiers

Competitive benefit

Positive

order winners less important

Neutral qualifiers

Negative Low Achieved performance High

Product Positioning Strategy

Procurement Fabrication Assembly Delivery

MTS ATO

MTO
ETO

Make to Stock (MTS)

Items tend to be standard A customer is not willing to tolerate delay in receiving the product Management is required to maintain stock of finished products Produced in a flow shop / mass production system

Assemble-to-Order (ATO)
Product variety tend to be large, produced from standard components and subassemblies with a short assembly lead time. Options, subassemblies, and components are either produced or purchased to stock The customer enjoys for ssome customization, yet has a shot wait for delivery

Make- or Engineer-to-Order
Produce specialty goods In many situations, the design of the item is part of what is purchased The final product is usually a combined of standard components and other components custom designed for the customer The manufacturer often purchases materials after the order is placed The customer must be willing to tolerate a long lead time

Decoupling Points Vs Lead Times

Delivery Lead Time Cumulative Lead Time

Purchase

Manufacture
Delivery Lead Time

Assemble

Ship

Manufacture

Assemble

Inventory Delivery Lead Time

Ship

Make-toStock

Inventory

Manufacture

Assemble

Ship

Make-toOrder

Delivery Lead Time

Manufacture

Inventory

Assemble

Ship

Assembleto-Order

Process Positioning Strategy

Tinggi Flow shop / Mass Production

Air mineral
Multi-skilled, Less systemization, Flexible facility, Higher costs

Volume produk

Batch Production Job shop production

Specialized-skilled, More systemization, Standard facility, Lower costs

Projects
Kapal pesiar Variasi produk Tinggi

Flow Shop
The product always follows the same sequential steps of production Could be continuous or discrete flows The production process generally is arranged to minimize materials handling Inventory planning and control is driven by the rate of flow Balanced capacity of different works stations along the line is important

Batch Production
Two or more products are manufactured in the same facility Long setup time between batch each batch should run for several hours or days to achieve economies of scale Equipments tend to be more general purpose, and thus less efficient, than the flow shop

Job Shop
Organization of similar equipment by function Orders may follow similar of different paths through the plant, suggesting one of more dominant flows The layout is designed to support great diversity of flow among products and large WIP Many different lots could be in the production facility at the same time Resource availability must be coordinated with order planning

Diskusikan:
Pabrik TV, Mobil, dan Kapal Bedakan posisinya pada spektrum Volume dan Variasi Model layout apa yang digunakan? Bedakan strategi manufakturnya Seberapa penting ramalan penjualan produk akhir pada produk-produk tersebut? Hal-hal apa yang menjadi kinerja kritis sistem produksi tersebut? Dalam bentuk apa rencana produksi akan dibuat? Dalam bentuk apa inventory akan disimpan?

PPIC

Terminologies
Production Planning and Control (PPC) Production Planning and Inventory Control (PPIC) Manufacturing Planning and Control (MPC)

Sumber Daya Produksi: Bahan baku dan komponen

Tenaga kerja Mesin dan peralatan
Proses perencanaan Proses Eksekusi / Implementasi Proses pengendalian

Output: Produk akhir

Waste

Planning and Control: What decisions are involved?

Why Plan?
To satisfy customer demand, ensure the availability of resources Material Capacity
Demand Resources

Resource Planning

Sales & Operations Planning

Demand Management

Master Production Scheduling

Detailed Capacity Planning

Detailed Material Planning Engine Material & Capacity Plans

Shop-floor Systems

Supplier Systems Back End

Enterprise Resource Planning

Front End

PPC FUNCTIONS
PLANNING PRODUCTION PLANNING INVENTORIES PLANNING CAPACITIES AUTHORIZATION OF PRODUCTION AND PROCUREMENT CONTROL OF PRODUCTION, INVENTORIES AND CAPACITIES STORAGE AND MOVEMENT OF MATERIALS

ORGANIZATION STRUCTURE

PRESIDENT TREASURER SECRETARY

CONTROLLER

V.P MARKETING

V.P MANUFACTURING

V.P PRODUCT ENGINEERING

V.P INDUSTRIAL RELATIONS

PPIC Staff

MANUFACTURING ENGINEERING MANAGER

PURCHASING MANAGER

PLANT MANAGER

PPIC AS A STAFF FUNCTION

ORGANIZATION STRUCTURE
PRESIDENT TREASURER SECRETARY

CONTROLLER

V.P MARKETING

V.P MANUFACTURING

V.P PRODUCT ENGINEERING

V.P INDUSTRIAL RELATIONS

MANUFACTURING ENGINEERING MANAGER

PURCHASING MANAGER

PIC MANAGER

PLANT MANAGER

MASTER SCHEDULLER

PRODUCTION CONTROL

INVENTORY CONTROL

STORES MATERIAL HANDLING

PPC AS A LINE FUNCTION DEALING WITH MATERIAL MOVEMENT INSIDE FACTORY

ORGANIZATION STRUCTURE

PRESIDENT

TREASURER

SECRETARY

CONTROLLER

V.P MARKETING

V.PMATERIAL MANAGEMENT

V.P MANUFACTURING

V.P PRODUCT ENGINEERING

V.P INDUSTRIAL RELATIONS

PURCHASING

MASTER SCHEDULER

PRODUCTION CONTROL

INVENTORY CONTROL

STORES MATERIAL HANDLING

DISTRIBUTION

PPC AS A LINE FUNCTION DEALING WITH MATERIAL MOVEMENT INSIDE AND OUTSIDE FACTORY

1. PPIC is only one function in a production system. The function is not to work in isolation, but it needs good cross functional team with other functions.

2. PPIC is also an agent in a company which should foster good coordination with suppliers, subcontractors, customers, and other relevant parties within a supply chain.

Conflicts Between Functions

We should always have enough inventory so that none of the customer orders are missed Our inventory turnover rate is too low, we need to have our inventory level reduced by 10% this year We need to have a better delivery schedule from our suppliers. Too much inventory increase difficulty in managing store activities

I dont want my machine to have more than one setup in a week. Too many changes from customers significantly deteriorating our productivity.

Bad cross functional team: Some causes

Marketing team did not know the load of the Production system and make decisions Without consulting Production people

Engineering changes not Communicated to other functions

When issuing materials, warehousing people often forget to input the transaction to the system Information about late Material delivery from suppliers is not shared with other functions

PPC for Networked Companies

It is very often one company does not perform the whole PPIC functions. Rather, the functions are spread over a number of different points within a networked companies. For example, many multinational companies do the strategic plan and procurement centrally, but make detailed plan in a local office.

Collaborative Planning
A new issue in production planning and control is the emergent trend of companies doing collaborative planning. This is important to make better synchronisation and visibility across the supply chain.