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Production Planning,

Scheduling and Control


by

Ed Red
ME 482 - Manufacturing Systems

Objectives

INMASS/MRP Modules
MRP (Materials Requirements Planning)
Inventory Control
Bill of Materials

To review modern production control


Job Cost/Work
in Process
technologies
Purchasing
- MRP
Sales Order Entry
- JIT
General Ledger
- Shop floor control
Accounts Receivable
Accounts Payable
- Inventory control
Payroll

Shop Floor Control

To study costs and complexity of manufacturing


systems
Bar Coding
Forecasting
StarShip Shipping Module
To consider application conditions (student
presentations)
Customer Histories
Vendor Histories

To test understanding of the material


Eachpresented
module includes built-in reports and
the INQUIRE Report Generator allows you
to create customized reports and forms.

ME 482 - Manufacturing Systems

Production planning, scheduling, and control


Objective ...managing the details of what and how many products to produce
and when, and obtaining the raw materials, parts, and resources to produce
those products. (Groover)

Four activities of production planning:


Aggregate production planning enterprise level planning for product lines and
output levels.

6 or more months

Master production planning - Breaking down the enterprise product plans into
a master production schedule (MPS) for producing models within each product
line.
Material requirements planning (MRP) computer plan to convert MPS into a
schedule of raw materials and parts used
end products.
1 -in2 the
months
Capacity planning determine labor and equipment needed to achieve master
schedule.
ME 482 - Manufacturing Systems

Production planning, scheduling, and control


Four production activities:
Shop floor control compare progress and status of production orders to
production plans (MPS) and release production orders to the factory as needed.
Inventory control - techniques for managing inventory.
Manufacturing resource planning (MRP II) integrates MRP, capacity
planning, shop floor control and other production functions.
Just-in-time production systems (JIT) scheduling discipline in which
materials and parts are delivered to the next production station (cell, FMS, etc.)
just prior to their being used.
ME 482 - Manufacturing Systems

Shop floor control


Three phases:
Order release soft (modern factory) and/or hard (manual factory)
documentation needed to process a production order through the factory.
Order scheduling - assigns production orders to the plant work
centers...often referred to as a dispatch list.
Order progress monitors the status of the orders in the plant, WIP (workin-progress), and any other characteristics which can be used to measure
progress and performance. May depend on a factory data collection system
for information.
ME 482 - Manufacturing Systems

Shop floor control order release


Documentation consists of:
Route sheet documents process plan for part to be produced.
Material requisition - draw necessary materials from inventory.
Job cards report labor required to produce part .
Move tickets authorize parts to be transported between work centers.
Parts list needed if the product requires an assembly of component parts

ME 482 - Manufacturing Systems

Shop floor control order scheduling


Concerned with machine loading and job sequencing:
Machine loading allocating orders to work centers.
Job sequencing - determining the order in which parts are processed through a
given work center.
Priority control maintains the proper priority for the production orders under
the dispatching rules:
first-come-first-serve jobs are processed in order received
earliest due date orders with earlier due dates have higher priority
shortest processing time those finished faster have higher priority
least slack time jobs with least slack time have higher priority
critical ratio ratio of time remaining until due date divided by remaining
ME 482 - Manufacturing Systems

Shop floor control order progress


Concerned with progress reports:
Work order status reports status of production orders.
Progress reports - report performance of shop during a time period, including
orders completed, orders not completed, etc.
Exception reports deviations from the production schedule and other
exceptions.

ME 482 - Manufacturing Systems

Shop floor control software

ME 482 - Manufacturing Systems

Shop floor control software

ME 482 - Manufacturing Systems

Shop floor control software

ME 482 - Manufacturing Systems

Inventory control
Concerned with minimizing cost of holding inventory and maximizing
customer service. These seem to conflict.
Types of inventory:

Raw materials
WIP
Components
Finished products

Inventory costs:

Investment costs
Storage costs
Possible obsolescence costs
Spoilage costs

Inventory as a function of demand:

Independent demand (order point inventory method) demand for a


product is unrelated to demand for other items (e.g., final product and spare
parts)
Dependent demand (MRP method) demand for an item is directly related
to demand for some other item (e.g., product component, raw material)
ME 482 - Manufacturing Systems

WIP inventory costs


Concerned with minimizing costs of processing materials before the final
product can be released to the consumer.
Costs considerations:
Production consists of a series of operations
Time is consumed in each operation (and time is cost)
Time and costs are consumed between each operation (e.g., material handling
with no value added)

WIP represents money expended for material and processing, still


considered inventory because goods are not yet delivered to the customer!
ME 482 - Manufacturing Systems

WIP inventory cost analysis - terms


Cm material cost
Tp average production time (setup plus operation time)
Tpk production time for process k (setup plus operation time)
Tsu average machine setup time for a batch process
Tno average non-operation time for a machine
Tc average operation cycle time for a machine
Ta average operation cycle time for a machine including setup and
non-operation times

ME 482 - Manufacturing Systems

WIP inventory cost analysis - terms


Co production costs rate
Cok operational costs for process k
Cno average non-operational costs (material handling, inspection, etc.)
Cnok non-operational costs for process k (material handling, inspection,
etc.)
Csu = setup costs and/or ordering costs for an order($/setup or $/order)

ME 482 - Manufacturing Systems

WIP inventory cost analysis - terms


Cpc part costs accumulated through all processes, inspections, and
material handling
no total number of operations/processes
MLT manufacturing lead time (the longer the MLT, the greater the
WIP)
t time of part spent in process sequence
h holding cost rate
Ch = holding costs
HCpc holding cost per part
TCpc total cost per part including WIP carrying costs
ME 482 - Manufacturing Systems

WIP inventory cost


analysis graphs

Part/product costs as function of time in


factory

ME 482 - Manufacturing Systems

Linear approximation of part costs as


function of time in factory

WIP inventory cost analysis graphs


Linear approximation with WIP holding costs

ME 482 - Manufacturing Systems

WIP inventory cost analysis


Equations:
avg batch operation cycle time

Ta = Tsu + Q Tc + Tno

MLT

MLT = no Ta

(batch process)

cost per operation

Cok = Co Tpk + Cnok

total cost after all operations

Cpc = Cm + k Cok

total cost after all operations*

Cpc = Cm + no ( Co Tp + Cno )

* assuming Tpk Systems


and Cnok are the same for each operation
ME 482 - Manufacturing

( k = 1, .. no)

WIP inventory cost analysis


Equations:
part cost function line*

C(t) = Cm + no (Co Tp + Cno )]t/ MLT

*using average Tp and Cno


MLT

total cost per part including WIP

TCpc = Cpc + (Cm + Cp)t/MLT)h dt


o

where Cp = no (Co Tp + Cno )


then

TCpc = Cpc + HCpc

where HCpc = holding cost for WIP HCpc = (Cm + Cp/2) h (MLT)
ME 482 - Manufacturing Systems

WIP inventory example


Problem: Inventory Holding Cost for WIP During Manufacturing

The cost of the raw material for a certain part is $100. The part is
processed through 20 processing steps in the plant, and the
manufacturing lead time is 15 wk. The production time per processing
step is 0.8 hr, and the machine and labor rate is $25.00/hr. Inspection,
material handling, and other related costs average to $10 per
processing step by the time the part is finished. The interest rate used
by the company i = 20%, and the storage rate s = 13%. Determine the
cost per part and the holding cost.

ME 482 - Manufacturing Systems

WIP inventory example


Problem: Inventory Holding Cost for WIP During Manufacturing
Solution:
The material cost, operation costs, and non-operation costs are from
Cpc = Cm + Cp = Cm + no ( Co Tp + Cno ) = $100 + 20($25.00/hr x .8 hr + $10)
= $100 + $600 = $700/pc
Next, determine the holding cost rate h = 20%+13%=33%. Expressing this as a weekly
rate,
h = (33%)/(52 wk) = 0.6346 %/wk = 0.006346/wk. The holding cost/pc:
HCpc = (Cm + Cp/2) h (MLT) = (100 + 600/2)(.006346)(15 wk) = $38.08/pc
This gives a total cost of
TCpc = Cm + Cp + HCpc = 700.00 + 38.08 = $738.08/pc
ME 482 - Manufacturing Systems

JIT production systems


Problem - to reduce inventory costs by
delivering the correct components to the
manufacturing operation exactly when needed,
minimizing WIP and MLT. JIT is the solution.

ME 482 - Manufacturing Systems

JIT production systems


JIT must have:
Pull system of production control Kanban (card) system is
often used to implement a pull system. The cards authorize 1)
parts production (P-kanban) and 2) parts transport (Tkanban). A P-kanban authorizes an upstream process to
produce only the parts that will fill a batch container, no
more. A T-kanban authorizes the transport of the batch to a
downstream station. These procedures are duplicated in
sequence, eliminating much of the paperwork, but uses more
labor, although said to promote teamwork among stations.
ME 482 - Manufacturing Systems

JIT kanban examples


The withdrawal Kanban shows that
the preceding process which makes
this part is forging, and the person
carrying this Kanban from the
subsequent process must go to
position B-2 of the forging
department to withdraw drive
pinions. Each box of drive pinions
contains 20 units and the shape of the
box is B. This Kanban is the 4th of 8
issued. The item back number is an
abbreviation of the item.
ME 482 - Manufacturing Systems

JIT kanban examples


The production ordering Kanban
to the right shows that the
machining process SB-8 must
produce the crankshaft for the
car type SX50BC-150. The
crankshaft produced should be
placed at store F26-18. The
production-ordering Kanban is
often called an in-process
Kanban or simply a production
Kanban.

ME 482 - Manufacturing Systems

JIT production systems


JIT must have:
Small batch sizes and reduced setup times uses
improvements in fixturing, part handling, group
technology, automation, etc. to minimize batch size and
setup.

ME 482 - Manufacturing Systems

JIT production systems


JIT must have:
Stable and reliable production operations also includes a
stable supplier base, good relationships, committed
workforce, defect free materials and components (in other
words, you must have your act together from A Z)

ME 482 - Manufacturing Systems

Lean versus agile production systems


Lean production

Agile manufacturing

Enhancement of mass production

Emphasis on mass customization

Flexible production for product variety

Flexibility for customized products

Focus on factory operations

Scope is enterprise wide

Emphasis on supplier management

Formation of virtual enterprises

Emphasis on efficient use of resources

Thriving environment with continuous change

Relies on smooth production schedule

Responsive to change

Minimize change!

ME 482 - Manufacturing Systems

Embrace change!

Production planning, scheduling


and control

What have we learned?

ME 482 - Manufacturing Systems