project Facebook
Ronaldo777
ch12.pptSCM 304 Principles of Supply Chain Management
Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved
1
Managing Production Across the Supply Chain
Chapter 11
1
You will learn
Explain the activities that make up planning and control in a typical manufacturing environment.
Explain the linkage between sales and operations planning (S&OP) and master scheduling.
Explain the linkage between master scheduling and material requirements planning (MRP).
Discuss the role of production activity control and vendor order management and how these functions differ from higher-level planning activities.
Introduction (1 of 2)
Planning and control – A set of tactical and execution-level business activities that includes master scheduling, material requirements planning, and some form of production activity control and vendor order management.
Introduction (2 of 2)
Figure 12.1 A Top-Down Model of Manufacturing Planning and Control Systems
Master Scheduling (1 of 6)
Master Scheduling – A detailed planning process that tracks production output and matches this output to actual customer orders.
Makes specific the overall resource levels established by S&OP.
States exactly when and in what quantities specific products will be made.
Links production with specific customer orders, allowing the firm to tell the customer exactly when an order will be filled.
Informs the operations manager what inventory or resources are still available to meet new demand.
Master Scheduling (2 of 6)
Figure 12.2 The Link between the Sales and Operations Plan and the Master Schedule
Master Scheduling (3 of 6)
The Master Schedule Record
Forecasted demand
Booked orders
Projected inventory levels
Production quantities
Units still available to meet customer needs (Available to Promise)
Master Scheduling (4 of 6)
Forecasted demand – A company’s best estimate of the demand in any period.
Booked orders – Confirmed demand for products
Master Production Schedule (MPS) – The amount of product that will be finished and available for sale at the beginning of each week.
The MPS drives more detailed planning activities, such as Material Requirements Planning (MRP)
Master Scheduling (5 of 6)
Projected Ending Inventory – Best estimate of what inventory levels will look like at the end of each week based on current information.
Figure 12.4 Partial Master Schedule Record for the MeltoMatic Snowblower
Master Scheduling (6 of 6)
Available to Promise – A field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers.
Planning Horizon – The amount of time the master schedule record or MRP record extends into the future.
The longer the production and supplier lead times, the longer the planning horizon must be.
Material Requirements Planning (1 of 12)
Material Requirements Planning (MRP) – A planning process that translates the master production schedule into planned orders for the actual parts and components needed to produce the master schedule items.
Manages dependent demand inventory or inventory items whose demand levels are tied directly to the production of another item.
Rough-cut capacity planning – A capacity planning technique that uses the master production schedule to monitor key resource requirements.
Material Requirements Planning (2 of 12)
MRP is based on:
The bill of material (BOM)
Backward Scheduling
Explosion of the bill of material
Example 12.3 – King Phillip Chair (1 of 2)
Bill of material (BOM) – A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly.
© 2016 APICS Dictionary
Figure 12.12 Bill of Material (BOM) for the King Philip Chair
Example 12.3 – King Phillip Chair (2 of 2)
Planning lead time - The time from when a component is ordered until it arrives and is ready to use.
Figure 12.13 Product Structure Tree for the King Phillip Chair
Example 12.4 – King Phillip Chair (1 of 2)
The Master Schedule Record below shows that 500 finished chairs should be ready to sell at the beginning of week 5.
Figure 12.14 Master Schedule Record for the King Philip Chair
To have finished chairs at the beginning of Week 5, workers must start assembling the chairs at the beginning of Week 4.
Example 12.4 – King Phillip Chair (2 of 2)
Exploding the BOM – The process of working backward from the master production schedule for a level 0 item to determine the quantity and timing of orders for the various subassemblies and components.
This figure shows the logic of “backward scheduling.”
Figure 12.15 Exploding the BOM for the King Philip Chair
Material Requirements Planning (3 of 12)
The MRP Record
Gross Requirements
Scheduled Receipts
Projected Ending Inventory
Net Requirements
Planned Receipts
Planned Orders
Material Requirements Planning (4 of 12)
Figure 12.16 Calculating the MRP Record for Seats for the King Phillip Chair
Material Requirements Planning (5 of 12)
Calculating the MRP Record
A: Management needs 500 chairs at the beginning of week 5.
B: Because the planning lead time is 1 week, the workers need to start assembling the chairs in week 4.
C: The Gross Requirement for weeks 1–3 is zero because no chairs need to be assembled in those weeks.
D: The Gross Requirement for week 4 is 500 from the Start Assembly quantity in week 4.
E: The Net Requirements for week 4 =
Material Requirements Planning (6 of 12)
Calculating the MRP Record
F: Managers should plan on ordering enough to meet the net requirement in week 4.
G: There is a two-week planning lead time, so they must release the order for seats in week 2.
H: Ending Inventory for week 4 =
Material Requirements Planning (7 of 12)
Figure 12.17 MRP Records for the Level 1 Components
Material Requirements Planning (8 of 12)
Calculating the MRP Record
I: There are 25 leg assemblies in inventory beginning in week 1.
J: An order for 1000 is placed even though the net requirements are 475 units because 1000 is the minimum order size.
K: No order is placed because there is more inventory (525) than the gross requirements (400) in week 5.
L: There is a scheduled receipt for 250 units in week 1.
Material Requirements Planning (9 of 12)
Figure 12.18 Partial MRP Records for King Philip Chair
Material Requirements Planning (10 of 12)
Calculating the MRP Record
M: Because each leg assembly requires two legs, the gross requirements for legs in week 3 is 2,000 legs.
N: Each back assembly requires two side rails. Therefore, there is a planned order for 300 back assemblies in week 5 that results in a gross requirement of 600 side rails in the same week.
Crossbar Gross Requirements:
Material Requirements Planning (11 of 12)
Advantages of MRP
MRP is directly tied to the master production schedule and indicates the exact timing and quantity of orders for all components.
MRP allows managers to trace every order for lower-level items through all the levels of the BOM, up to the Master Production Schedule.
MRP tells a firm and its suppliers precisely what needs to be made when.
Material Requirements Planning (12 of 12)
Special Considerations in MRP
MRP requires organizational discipline and accurate information.
MRP must be able to accommodate uncertainty
MRP nervousness – A term used to refer to the observation that any change, even a small one, in the requirements for items at the top of the bill of material can have drastic effects on items further down the bill of material.
Production Activity Control and Vendor Order Management (1 of 3)
With Production Activity Control and Vendor Order Management systems, the emphasis shifts from planning to execution with capabilities to:
Route and prioritize jobs going through the supply chain.
Coordinate the flow of goods and materials between a facility and other supply chain partners.
Provide supply chain partners with performance data on operations and supply chain activities.
Production Activity Control and Vendor Order Management (2 of 3)
Job sequencing rules – Rules used to determine the order in which jobs should be processed when resources are limited and multiple jobs are waiting to be done.
First come, first served (FCFS)
Earliest due date (EDD)
Critical ratio (CR)
Calculated as:
Production Activity Control and Vendor Order Management (3 of 3)
Job Sequencing
Critical Ratio
Critical Ratio = 1 indicates that the amount of task time equals the amount of time left, hence any time spent waiting will make the job late.
Critical Ratio < 1 indicates that the job is going to be late unless something changes.
Jobs with the lowest Critical Ratio are scheduled to go first.
Example 12.7 – Carlos’s Restoration (1 of 4)
Carlos’s Restoration Services restores antique paintings. The process consists of three steps. Each of these steps must be completed prior to moving on to the next step. Also, Carlos’s can work on only one job at a time at each step.
Table 12.1 Job Requirements for Carlos’s Restoration Services
| Blank | Blank | Estimated Days | Blank | Total Task Time | Days Until Due | Critical Ratio |
| Job | Step 1 | Step 2 | Step 3 | Blank | Blank | Blank |
| Uptown Gallery | 3 | 2 | 3.5 | 8.5 | 21 | 2.47 |
| High Museum | 5 | 2 | 1 | 8 | 20 | 2.50 |
| Chester College | 3 | 2 | 5 | 10 | 10 | 1.00 |
| Smith | 6 | 4 | 1 | 11 | 15 | 1.36 |
Example 12.7 – Carlos’s Restoration (2 of 4)
First come, first served
Table 12.2 Job Requirements for Carlos’s Restoration Services
| First come, first served | Step 1 | Blank | Step 2 | Blank | Step 3 | Blank | Blank |
| Job | Start | End | Start | End | Start | End | Days Late |
| Uptown Gallery | 0 | 3 | 3 | 5 | 5 | 8.5 | 0 |
| High Museum | 3 | 8 | 8 | 10 | 10 | 11 | 0 |
| Chester College | 8 | 11 | 11 | 13 | 13 | 18 | 8 |
| Smith | 11 | 17 | 17 | 21 | 21 | 22 | 7 |
| Blank | Blank | Blank | Average lateness: | Blank | Blank | Blank | 3.75 days |
Example 12.7 – Carlos’s Restoration (3 of 4)
Earliest due date
[Table 12.2 Continued]
| Earliest due date | Step 1 | Blank | Step 2 | Blank | Step 3 | Blank | Blank |
| Job | Start | End | Start | End | Start | End | Days Late |
| Chester College | 0 | 3 | 3 | 5 | 5 | 10 | 0 |
| Smith | 3 | 9 | 9 | 13 | 13 | 14 | 0 |
| High Museum | 9 | 14 | 14 | 16 | 16 | 17 | 0 |
| Uptown Gallery | 14 | 17 | 17 | 19 | 19 | 22.5 | 1.5 |
| Blank | Blank | Blank | Average lateness: | Blank | Blank | Blank | 0.375 days |
Example 12.7 – Carlos’s Restoration (4 of 4)
Critical Ratio
[Table 12.2 Continued]
| Critical ratio | Step 1 | Blank | Step 2 | Blank | Step 3 | Blank | Blank |
| Job | Start | End | Start | End | Start | End | Days Late |
| Chester College | 0 | 3 | 3 | 5 | 5 | 10 | 0 |
| Smith | 3 | 9 | 9 | 13 | 13 | 14 | 0 |
| Uptown Gallery | 9 | 12 | 13 | 15 | 15 | 18.5 | 0 |
| High Museum | 12 | 17 | 17 | 19 | 19 | 20 | 0 |
| Blank | Blank | Blank | Average lateness: | Blank | Blank | Blank | 0 days |
Synchronizing Planning and Control across the Supply Chain (1 of 8)
Distribution requirements planning (DRP) – A time-phased planning approach similar to MRP that uses planned orders at the point of demand (customer, warehouse, etc.) to determine forecasted demand at the source level (often a plant).
Synchronizing Planning and Control across the Supply Chain (2 of 8)
Figure 12.22 Synchronized Planning and Control
Synchronizing Planning and Control across the Supply Chain (3 of 8)
MeltoMatic is sold through two regional distribution centers with the following downstream supply chain structure.
Figure 12.23 Downstream Supply Chain for MeltoMatic Snowblowers
Synchronizing Planning and Control across the Supply Chain (4 of 8)
Figure 12.24 DRP Records for the MeltoMatic Snowblower
Synchronizing Planning and Control across the Supply Chain (5 of 8)
Distribution Requirements Planning (DRP)
Records are almost identical to MRP records with one exception:
Instead of gross requirements, they show forecasted demand.
Forecasted demand – the number of snowblowers each center expects to ship to retail customers each week.
Activities at distribution centers are synchronized when their total weekly planned orders become forecasted demand in the factory’s master schedule.
Synchronizing Planning and Control across the Supply Chain (6 of 8)
When forecasted demand changes, managers will need to increase the master production schedules accordingly.
DRP quickly translates downstream demand into upstream production decisions.
Synchronizing Planning and Control across the Supply Chain (7 of 8)
Figure 12.25 The Impact of Forecast Changes on DRP Records
Synchronizing Planning and Control across the Supply Chain (8 of 8)
Figure 12.26 Synchronizing Plans across the Supply Chain
4434
maximum(0;)
maximum(0;50000)500
NRGREISR
=--
=--=
1
43444
005005000seats
ttttt
EIEISRPRGR
EIEISRPRGR
-
=++-
=++-
=++-=
where:
endinginventoryfromtimeperiod
endinginventoryfromtimeperiod1
1
schedulereceiptsintimeperiod
plannedreceiptsintimeperiod
grossrequirementsintimeperiod
EIt
t
EIt
t
SRt
t
PRt
t
GRt
t
=
=-
-
=
=
=
Grossrequirementsforcrossbarslegassembly
plannedorders
backassemblyplannedorders
Week3:1,0002501,250
Week4:0400400
Week5:1,0003001,300
=
+
+=
+=
+=
daysuntildue
Criticalratio
totaltasktimeremaining
=
