SISTEM MANUFAKTUR (SM)

Perencanaan Produksi (Production Planning)

Forum Kuliah TPL

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SISTEM MANUFAKTUR (SM)

Outline:
Tujuan dan Fungsi Perencanaan Produksi
Perencanaan Kapasitas Produksi
Agregat Planning
Scheduling
Master Scheduling

Link materi kuliah

http://

SISTEM MANUFAKTUR (SM)

Tujuan Pembelajaran:
Memahami tujuan dan fungsi perencanaan
produksi, perencanaan kapaistas produksi, agregat
planning, scheduling, master scheduling

Forum Kuliah TPL

http://

Perencanaan Produksi
Proses
produksi
berjalan
efektif dan
efisien

Menentukan
aktivitas
produksi

Menentukan
sumber daya

Tujuan
Perencana
an
Produksi

Menstabilkan
produksi dan
kebutuhan
tenaga kerja

Konsistensi
rencana
penjualan dan
rencana
produksi

Perencanaan Produksi
Tujuan perencanan produksi
Mengukur
performansi
produksi

Monitoring
hasil produksi
dan rencana

Fungsi
Perencana
an
Produksi
Mengarahkan
penyusunan
jadwal induk

Mengatur
persediaan
(Inventory)

Production Planning
Production Planning Hierarchy
Long-Range Capacity Planning
Aggregate Planning
Master Production Scheduling
Production Planning and Control Systems
Pond Draining
Systems

Push
Systems

Pull
Systems

Focusing on
Bottlenecks

Production Planning
Production Planning Activity

Long-Range Capacity Planning

(Facility Size, Equipment Procurement)

Long-Range
(years)

Medium-Range
(6-18 months)
(Facility Utilization, Personnel needs, Subcontracting)
Aggregate Planning

Master Production Scheduling

(MRP, Disaggregation of master plan)

Short-Range
(weeks)

Production Planning and Control Systems

Pond Draining
Push
Systems
Systems

Pull
Systems

Focusing on
Bottlenecks

Production Planning
Production Planning: Units of Measurement

Long-Range Capacity Planning

Entire
Product Line

Aggregate Planning

Product
Family

Master Production Scheduling

Specific
Product Model

Labor, Materials,
Production Planning and Control Systems
Machines
Pond Draining
Push
Systems
Systems

Pull
Systems

Focusing on
Bottlenecks

Production Planning
Why Aggregate Planning Is Necessary
Fully load facilities and minimize overloading and
underloading
Make sure enough capacity available to satisfy
expected demand
Plan for the orderly and systematic change of
production capacity to meet the peaks and
valleys of expected customer demand
Get the most output for the amount of resources
available

Production Planning
Input Production Planneing with Agregate

A forecast of aggregate demand covering the selected

planning horizon (6-18 months)
The alternative means available to adjust short- to
medium-term capacity, to what extent each alternative
could impact capacity and the related costs
The current status of the system in terms of workforce
level, inventory level and production rate

Production Planning
Output Production Planning Agregate

A production plan aggregate decisions

for each period in the planning horizon
about
workforce level
inventory level
production rate

Projected costs if the production plan

was implemented

Production Planning
Term Capacity Adjustments
Workforce level
- Hire or layoff full-time workers
- Hire or layoff part-time workers
- Hire or layoff contract workers
Utilization of the work force
- Overtime
- Idle time (undertime)
- Reduce hours worked
Inventory level
- Finished goods inventory
- Backorders/lost sales
Subcontract

Production Planning
Approach

Informal or Trial-and-Error Approach

Mathematically Optimal Approaches
- Linear Programming
- Linear Decision Rules
Computer Search
Heuristics

Production Planning
Pure Strategies for the Informal Approach

Matching Demand
Level Capacity
- Buffering with inventory
- Buffering with backlog
- Buffering with overtime or
subcontracting

Production Planning
Matching Demand Strategy

Capacity (Production) in each time period

is varied to exactly match the forecasted
aggregate demand in that time period
Capacity is varied by changing the
workforce level
Finished-goods inventories are minimal
Labor and materials costs tend to be high
due to the frequent changes

Production Planning
Developing and Evaluating the Matching
Production Plan
Production rate is dictated by the
forecasted aggregate demand
Convert the forecasted aggregate demand
into the required workforce level using
production time information
The primary costs of this strategy are the
costs of changing workforce levels from
period to period, i.e., hirings and layoffs

Production Planning
Level Capacity Strategy

Capacity (production rate) is held level

(constant) over the planning horizon
The difference between the constant
production rate and the demand rate is
made up (buffered) by inventory, backlog,
overtime, part-time labor and/or
subcontracting

Production Planning
Developing and Evaluating the Level
Production Plan
Assume that the amount produced each
period is constant, no hirings or layoffs
The gap between the amount planned to
be produced and the forecasted demand
is filled with either inventory or
backorders, i.e., no overtime, no idle time,
no subcontracting
The primary costs of this strategy are
inventory carrying and backlogging costs
Period-ending inventories or backlogs are

Production Planning
Developing and Evaluating the Level
Production Plan

Assume that the amount produced each period is

constant, no hirings or layoffs
The gap between the amount planned to be
produced and the forecasted demand is filled
with either inventory or backorders, i.e., no
overtime, no idle time, no subcontracting
The primary costs of this strategy are inventory
carrying and backlogging costs
Period-ending inventories or backlogs are
determined using the inventory balance
equation: EIt = EIt-1 + (Pt - Dt )

Production Planning
Aggregate Plans for Services
For standardized services, aggregate
planning may be simpler than in systems that
produce products
For customized services,
there may be difficulty in specifying the
nature and extent of services to be
performed for each customer
customer may be an integral part of the
production system
Absence of finished-goods inventories as a
buffer between system capacity and

Production Planning
Preemptive Tactics

There may be ways to manage the

extremes of demand:
Discount prices during the valleys....
have a sale
Peak-load pricing during the highs ....
electric utilities, Nucor

Production Planning

Master Product Scheduling

Production Planning
Master Production Scheduling (MPS)
Objectives of MPS

Determine the quantity and timing of

completion of end items over a shortrange planning horizon.
Schedule end items (finished goods and
parts shipped as end items) to be
completed promptly and when promised
to the customer.
Avoid overloading or underloading the
production facility so that production
capacity is efficiently utilized and low

Production Planning
Master Production Scheduling (MPS)
Time Fences

The rules for scheduling:

Do not change orders in the frozen zone
Do not exceed the agreed on percentage
changes when modifying orders in the other
zones
Try to level load as much as possible
Do not exceed the capacity of the system when
promising orders.
If an order must be pulled into level load, pull it
into the earliest possible week without missing
the promise.

Production Planning
Master Production Scheduling (MPS)
Developing an MPS

Using input information

Customer orders (end items quantity,
due dates)
Forecasts (end items quantity, due
dates)
Inventory status (balances, planned
receipts)
Production capacity (output rates,
planned downtime)

Production Planning
Master Production Scheduling (MPS)
Developing an MPS

Schedulers must:
estimate the total demand for products
from all sources
assign orders to production slots
make delivery promises to customers,
and
make the detailed calculations for the
MPS

Production Planning

Aggregate Production
& Capacity Plans

They
combine

Products into
product groups.
Demand into
monthly totals.

Which alltogether
reflect Top Management
Decisions.

Personnel
Requirements
across departments

Eventually, the time comes when individual end item products and services
must be scheduled at specific work centers.
This is accomplished by master scheduling
Which means, producing a SUPPLY PLAN (a time table including quantities) to produce specific
items or provide specific services within a given time period.

Production Planning
Master Scheduling & the Master Production Schedule (MPS)

The
master
schedule
(MS) is a presentation of the
demand,
including
the
forecast and the backlog
(customer orders received),
the
master
production
schedule (the supply plan),
the projected on hand (POH)
inventory, and the availableThe master
to-promise
(ATP) production
quantity.
schedule (MPS) is the
primary
output
of
the
master scheduling process.It
is the plan for providing
the supply to meet the
demand.

Example : A simple MS for MPS item (end

product)

Production Planning
Relationship of Master Scheduling to other MPC activities
The master schedule (MS) is a
key link in the manufacturing
planning and control.

Creates demand
requirements

The MS interfaces with

marketing, distribution planning,
production planning, and
capacity planning.
The MS drives the material
requirements planning (MRP)
system.
Master scheduling calculates
the quantity required to meet
demand requirements from all
sources (see
the example case on next page).
Input-Output Control
& Operation
Scheduling

Creates demand
requirements

Is the key in
developing the
master schedule

Production Planning
Example : A case in which the distribution requirements are the gross
requirements
for the MS

Here, the MS;

enables marketing to make
legitimate delivery commitments
to field warehouses and final
customers.
enables production to evaluate
capacity requirements in a
more detailed manner.
provides to management the
opportunity to ascertain whether
the business plan and its
strategic objectives will be
achieved.

Distribution requirements
(gross requirements for
MS)

Net Requirements are

calculated by MRP logic.

Production Planning
Understanding THE ENVIRONMENT in which master scheduling takes
place.
Before describing the activities involved in creating and managing the MS,
we need to examine the different organizational environments in
which master scheduling takes place.
THESE ENVIRONMENTS ARE DETERMINED BY
the companys STRATEGIC RESPONSES to;

the INTERESTS of
CUSTOMERS

and

the ACTIONS of
COMPETITORS

Thus, a COMPETETIVE
STRATEGY evolves...

Production Planning
FOR A SPECIFIC PRODUCT (end item),
THIS COMPETETIVE STRATEGY MAY BE
ONE OF THE FOLLOWING

Make finished items to stock

(sell from finished goods inventory)

Assemble final products to order

and make/buy subassemblies and
lower level detail parts to stock.

It is not
unusual for an
organization to have different
strategies for different product Custom design and make to
order.
lines and, thus, use different
MS approaches.

Production Planning
Make-to-stock Strategy

Basic characteristics of this

strategy/environment:
This strategy emphasizes immediate delivery of reasonably priced offthe-shelf standard items.
In this environment the MPS is the anticipated build schedule of the items
required to maintain the finished goods at the desired level.
Quantities on the schedule are based on manufacturing economics, the
forecasted demand and desired safety stock levels.
In this environment, an end item bill of material (BOM) is used. Items may be
produced either on a mass production (continuous or repetitive) line or in batch
production.

Production Planning
Assemble-to-order Strategy

Basic characteristics of this

strategy/environment:
In this environment, subassemblies and lower level detail
parts/components are either produced or purchased to stock.
The competitive strategy is to be able to supply a large variety of final
product configurations from standard components and subassemblies
within a relatively short lead time.
This environment requires a forecast of options as well as the total
demand of the end item. Thus, there is an MPS for the options, accessories,
and common components as well as final assembly schedule (FAS). Here,
examples of options can be given as; an automobile may be ordered with or
without air conditioning or a fast-food restaurant may deliver your
hamburger with or without lettuce.
The advantage of this approach is that many different final products can
be produced from relatively few subassemblies and components. This
reduces inventory substantially (see example on following page).

Production Planning
Example : Advantages of Assemble-to-order Strategy

(Each final
product contains
four major subassemblies and
a detail part)

There are 2 different

Variations for A2
There are 3 different
Variations for A4
There are 4 different
Variations for A1

There are 4 different

Variations for A3

There are 5 different

Variations for C1

The number of alternative final product configurations = 4x2x4x3x5 = 480

The number of different items to stock = 4+2+4+3+5 = 18
Relatively small

number of
component items to
stock.

Competetive
strategy of large
variety of final
product.

Production Planning
Custom Design & Make-to-Order Strategy
In many situations the final design of an item is part of what is
purchased. The final product is usually a combination of standard items
and items custom designed to meet the special needs of the customer.
Combined material handling and manufacturing processing systems,
special trucks for off-the-road work on utility lines and facilities are
examples of such final products.
Thus, there is one MPS for the raw material and the standard items that
are purchased, fabricated, or built to stock and another MPS for the
custom engineering, fabrication, and final assembly.

Production Planning
Relationships between competetive strategies

Production Planning
Understanding the Bill of Material & its uses
An inclusive definition of a final product includes; a list of the items,
ingredients, or materials needed to assemble, mix, or produce that end
product.
This list is called a bill of material (BOM) and created as part of the design
process .
A single level BOM is
sufficient when final
product is assembled or
manufactured from a set
of purchased parts and
raw materials.

Production Planning
Understanding the Bill of Material & its uses
A multilevel (indented)
BOM is required when
final product has make
subassemblies in its
structure.

End Item: Lamp LA01

Production Planning
Understanding the Bill of Material & its uses
If the finished shaft and wiring assembly shown in Table below
were make subassemblies, then their components would be listed
in the multilevel (indented) BOM of Lamp LA01.

As one can easily see, the

multilevel product structure
is really made up of building
blocks of single level product
trees.

Production Planning
COMPLEXITIES IN REAL LIFE :
What happens if we manufacture alternate lamps by using;
three different shades,
two alternate base plates, and
two types of sockets
To make the
planning task more
understandable, we
can prepare the
common parts
bill.
Some parts are
common to all
models
Some parts are not
common to all
models

Then we have (3x2x2=) 12 different models

having some common components.

Production Planning
COMPLEXITIES IN REAL LIFE :
Inorder to ease up the planning task, we can reduce the number of items in BOM by
grouping part 1100 (finished shaft) and part 1700 (wiring assembly) which are
common parts to all products, and assign a new part number (such as 3000) to this group.
Since part no 3000 will never be
stocked, it will be a pantom number.

18 items

19 items

Production Planning
COMPLEXITIES IN REAL LIFE :
From Table below, a simplified product structure diagram can be created for the family
of lamps which consists of modular pseudo subassemblies :

In this kind of diagram, instead of the quantity

for each unit assembled, the percentage split
for each type of component is stated.
If we plan for a total of 10,000 lamps for each
month, this planning bill can be used to
derive the number of each type of component
to build.

Furthermore, if we decide to change from 15

cream shade to, say, a 16 green shade, we
need to alter only this single BOM (modular
bill).

Production Planning
Understanding the Planning Horizon
A Principle of Planning:
A plan must cover a period at least equal to the time required to accomplish it.
That is, the MS planning horizon must be at least as long as the lead time
required to fabricate the MS items. This includes production and procurement time
as well as engineering time in a custom design environment.

Production Planning
Minimum Planning Horizon:

Production Hours

According to the principle of planning, Minimum Planning Horizon is,

the time period in which the MPS can not be changed. This period is
also called as frozen zone.

Committed Backlog
(IN PRODUCTION)
(frozen schedule/zone)
Committed
Backlog
(NOT in
PROD)

Minimum planning horizon

(frozen zone)

Forecasted
Backlog

Committed
Backlog
(NOT in
PROD)

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Planning horizon which is under the
authority of master schedular

Weeks

Production Planning
A Sample Time Fencing for MS Planning Horizon

PERIOD A :

Only top management can change the MPS.

PERIOD B :

Any additions to the schedule must be counterbalanced by comparable

deletions or increases in capacity. Changes are usually negotiated
between marketing and manufacturing with the master scheduler
determining their feasibility before the final decision. The product mix
may change but not the production rate.

PERIOD C :

The MPS is consistent with the production plan. Preparation of the MS is

straightforward in this time frame.

Production Planning
DESIGNING, CREATING & MANAGING THE MASTER SCHEDULE
Master Scheduling activities are carried out in three main steps:
SUBSTEPS :
STEP 1 :

Designing the master

schedule (MS)

STEP 2 :

Creating the master

schedule (MS)

STEP 3 :

1. Select the items; that is, select the levels in the BOM structure to be represented by
the items scheduled (both components and final assemblies may be included).
2. Organize the MS by product groups.
3. Determine the planning horizon, the time fences, and the related operational guides.
4. Select the method for calculating and presenting the available-to-promise (ATP)
information.
1. Obtain the necessary informational inputs, including the forecast, the backlog
(customer commitments), and the inventory on hand.
2. Prepare the initial draft of the master production schedule (MPS).
3. Develop the rough cut capacity requirements plan (RCCR').
4. If required, increase capacity or revise the initial draft of the MPS to obtain a
feasible schedule.

Controlling the master

schedule (MS)

1. Track actual production and compare it to planned production to

determine if the planned MPS quantities and delivery promises are
being met.
2. Calculate the available-to-promise to determine if an incoming
order can be promised in a specific period.
3. Calculate the projected on hand to determine if planned production
is sufficient to fill expected future orders.
4. Use the results of the preceding activities to determine if the MPS
or capacity should be revised.

Production Planning
Designing The Master Schedule

Suppose that we are going to create a MS in a make-tostock environment with no safety stock.

Our planning horizon will be 4 weeks (weeks 32, 33, 34 &

35). Calculation method for ATP (available-to-promise)
quantities will be discrete.

Production Planning
Creating The Master Schedule
When we examine the available
information for PG1, we see that;
For MPS Item1, the POH quantity of
week 31 does not meet the forecasted
requirement of week 32. So, we need
to schedule this item for week 32.
For MPS Item2, the POH quantity of
week 33 does not meet the forecasted
requirement of week 34. So, we need
to schedule this item for week 34.
For MPS Item3, the POH quantity of
week 34 does not meet the forecasted
requirement of week 35. So, we need
to schedule this item for week 35.

Some companies may use a safety stock level. Item is rescheduled when POH
drops down to the safety stock level.

Production Planning
Creating The Master Schedule

Based on a weighted average capacity of 180 units per week, we create our
initial (first) plan :
The POH for the
first week equals
the beginning
inventory plus the
MPS quantity minus
the forecast
requirements.

For each week we

expect to complete
a total of 180 units
of PG1 products.

Now the question is, whether do we have sufficient capacity to carry out this plan?

Production Planning
Brief summary of Capacity management

Figure 9 shows an overview of the entire

Manufacturing Planning & Control (MPC)
process under MRP.
In this approach, capacity management
techniques usually are separated into four
categories:
1.
2.
3.
4.

resource requirements planning (RRP),

rough cut capacity planning (RCCP),
capacity requirements planning (CRP),
and
input / output control.

A problem commonly encountered in

operating MRP systems is the
existence of an overstated MPS.

Remember:
MRP is
insensitive
to capacity.

Production Planning

Production Planning
An overstated master production schedule is the one which
orders more than the production can complete. It causes;
raw materials and WIP inventories to increase because
more materials are purchased and released to the shop
than are completed and shipped.
a buildup of queues on the shop floor resulting an
increase in actual lead times which yields to ship dates
to be missed.
Overstated
MPS causes
a chain
reaction
which flows
down to the
lowest level
component
s.

Production Planning
Revising the MPS
Lets go back to the initial MPS developed for product group PG1 which covers
products MPS Item1, MPS Item2, and MPS Item3 according to the production
plan dictated by management.

Capacity
required by this
initial MPS is
shown in
following page.

Production Planning

The comparison of capacity requirements to available capacity gives the master scheduler
the following options:
1. Increase capacity in Weeks 32 and 33.
2. Reduce production quantities in Weeks 32 and 33 and increase
production quantities in Weeks 34 and 35.
3. Some combination of Options 1 and 2,

Production Planning
In this case the choice is Option 2:
The revised MPS quantities were obtained by scheduling the maximum possible
quantity of MPS Item1 in Weeks 32 and 33 and completing those requirements in Week
34. The remaining requirements for MPS Item2 and MPS Item3 were roughly balanced
between Weeks 34 and 35, producing MPS Item2 first.

Production Planning
POH values reveal
that sufficient units will
be available to cover
forecast demand for
PG1

Remember that; the

Production Plan and the
MPS were based on the
Forecasts and customer
commitments /backlog. For
this reason, it may be
necessary to revise the MPS
again if actual orders are
substantially different from
the forecast.

104

Once the initial revised feasible MPS is developed, creating the master schedule is completed.

Production Planning
Controlling the MPS

The MASTER SCHEDULE (MS)

itself serves as a control device
in three distinct ways

Actual production is
compared to the MPS to
determine if the
plan is being met.

The projected on hand (POH)

is calculated to determine if
the supply is sufficient to fill
expected future orders.

The available-to-promise
(ATP)is calculated to determine
if an incoming order can be
promised for delivery in
a specific period.

Production Planning
Controlling the MPS

The Available to Promise Quantity (ATP)

Definition of ATP as given by APICS Dictionary is as follows;
"The uncommitted portion of a company's inventory or planned
production. This figure is normally calculated from the master
production schedule and is maintained as a tool for customer order
promising."

However, when we say that;

there are 25 units available-to-promise in Week 7 and
there are20 units available-to-promise in Week 8,
the meanings are not clear until the method of calculation for ATP
values is known.

Production Planning
Controlling the MPS

The Available to Promise Quantity (ATP)

There are three methods

of computing the ATP

DISCRETE
(ATP:D)

CUMULATIVE

Without look ahead

(ATP:WOL)

With look ahead

(ATP:WL)

Production Planning
Controlling the MPS

A. Calculation of Discrete ATP (ATP:D)

Computation method is as follows:

1.

For the first period

If there is a scheduled MPS quantity;
ATP:D = Beginning inventory + Scheduled MPS qty for the first period Backlog for the period (committed
If there is NO scheduled MPS quantity;
ATP:D = 0

Production Planning
Controlling the MPS

A. Calculation of Discrete ATP (ATP:D)

WHY ATP:D=0 for the second case?
Because in this case, the beginning inventory is supposed
to compensate the backlogs of the first period and the
consecutive periods (if there are any)which does not have
scheduled MPS quantities.
For this reason, the beginning inventory has no
significance for the first period. Thus, the formula yields to
a negative or zero value for ATP:D.
Since there can not be a negative available to promise
quantity, ATP:D value becomes 0.
Example - ATP:D quantities for week 32
MPS Item1 ATP:D = 10+169-110 = 69
MPS Item2 ATP:D = 0+0-35 = -35 = 0
MPS Item3 ATP:D = 0+0-13 = -13 = 0

Production Planning
Controlling the MPS
2.

For the second period and on

If there is a scheduled MPS quantity;
ATP:D = Scheduled MPS qty for the period Backlog for the period (committed qty).
If there is NO scheduled MPS quantity;
What happens to ATP:D values of
ATP:D = 0
Example
Example- ATP:D
- ATP:Dquantities
quantitiesfor
forMPS
MPSItem
Item
for
for
11
weeks
weeks33,
33,34
34and
and35
35

MPS Item1 if we receive an additional

order of 30 units for week 32?

For week 33 ATP:D = 169-80 = 89

For week 34 ATP:D = 22-5 = 17
For week 35 ATP:D = 0-15 = -15 0
Example - ATP:D quantities for MPS Item2 for
weeks 33, 34 and 35
For week 33 ATP:D = 0-20 = -20 0
Remember that, since there is no scheduled MPS for this
period, respective backlog should be associated with an
MPS quantity prior to week 32.
For week 34 ATP:D = 160-45 = 115
For week 35 ATP:D = 56-24 = 32

The ATP:D of week 32 changes from

69 to 39. ATP:D quantities for other
weeks remain same as before.

Production Planning
Controlling the MPS

WHY we DO NOT have Forecast and POH values in Master

Schedule when computing ATP:D?
Note that in computing the ATP: D, it is not necessary to have the forecast and
the projected on hand inventory in the master schedule. This is because at this
time the master scheduler is not creating a master schedule, but, instead, is
managing an existing schedule.
The master scheduler is promising the delivery of units to customers which will be
available either from units already on hand when construction of the master
schedule began, or from units scheduled to be built in accordance with the master
production schedule. Therefore, the forecast and POH are not included in the
tables that follow.

Production Planning
Controlling the MPS

B. Calculation of Cumulative ATP without lookahead (ATP:WOL)

Computation method is as follows:
1.

For the first period

ATP:WOL = Beginning inv + Scheduled
MPS qty Backlog

2.

For the following periods

ATP:WOL = ATP:WOL of preceeding
period + Scheduled MPS
qty
Backlog
Example - ATP:WOL quantities for MPS Item1 for
weeks 32, 33, 34 and 35
For week 32 ATP:WOL = 10+169-110 = 69
For week 33 ATP:WOL = 69+169-80 = 158
For week 34 ATP:WOL = 158+22-5 = 175
For week 35 ATP:WOL = 175+0-15 = 160

Production Planning
Controlling the MPS

Difference between ATP:WOL & ATP:D methods

The most obvious difference between
ATP:WOL and the ATP:D methods is
that, the ATP in any period is likely to
include units also included in the ATP of
other periods.
For example, For MPS Item1, the 158
unit ATP:WOL of Week 33 includes the
69 units in the ATP of Week 32, which
are also included in the ATP of all other
weeks.
Furthermore, in ATP:WOL procedure,
the ATP for a week may include units
committed to fill requirements for a later
week.
For example, 15 of the units in the ATP
of Week 34 are committed to customer
orders promised in Week 35.

The data becomes

misleading

Production Planning
Controlling the MPS

B. Calculation of Cumulative ATP with lookahead (ATP:WL)

The look-ahead approach resolves the misleading data problem of ATP:WOL
method of calculation.

The ATP:WL of a period = (the ATP:WL of the

preceding period) + (the MPS of the period)
(the backlog of the period) (the sum of the
differences between the production [MPS qty]
and backlog of all future periods until, but not
including, the period at which point production
exceeds the backlog).
Example - ATP:WL quantities for MPS Item1 for
week 34
For week 34 ATP:WL = 158+22-5-15 = 160

Production Planning
Controlling the MPS
Detailed Calculation:

MPS Item1 :

ATP:WL for week 33;

ATP:WL for week 32;

ATP:WL which is prior to week 32 is 10 units.
MPS for week 32 is 169 units.
Backlog for week 32 is 110 units.
In the following week (week 33), production
(MPS qty of 133 units) exceeds the backlog
(of 80 units). Therefore we will not consider
week 33.
Accordingly; ATP:WL quantity of week 32 =
10+169-110 = 69 units.

Is calculated exactly in the same way since, in the following week (week 34), production (MPS qty
of 22
units) exceeds the backlog (of 5 units). Accordingly; ATP:WL quantity of week 33 = 69+169-80 =
158 units.

ATP:WL for week 34;

ATP:WL for week 35; remains as 160 units since we had already
excluded 15 units of difference qty.

Production Planning
Controlling the MPS
Resolution of the misleading data problem :

The ATP quantity of 175 for week 34

includes comitted quantity of 15
units for the following week (week
35).

The ATP quantity of 160 for week 34

does not include the comitted quantity
of 15 units for the following week (week
35).

Week in which we
do not have enough
production to meet
the existing backlog.

Week in which we
do not have enough
production to meet
the existing backlog.

Production Planning

Rough-Cut Capacity Planning

Production Planning
Rough-Cut Capacity Planning

As orders are slotted in the MPS, the

effects on the production work centers are
checked
Rough cut capacity planning identifies
underloading or overloading of capacity

Production Planning
Example: Rough-Cut Capacity Planning
Texprint Company makes a line of computer
printers on a produce-to-stock basis for other
computer manufacturers. Each printer requires
an average of 24 labor-hours. The plant uses a
backlog of orders to allow a level-capacity
aggregate plan. This plan provides a weekly
capacity of 5,000 labor-hours.
Texprints rough-draft of an MPS for its printers is
shown on the next slide. Does enough capacity
exist to execute the MPS? If not, what changes
do you recommend?

Production Planning
Example: Rough-Cut Capacity Planning

Rough-Cut Capacity Analysis

WEEK
1
PRODUCTION

100 200 200 250 280

TOTAL
1030

LOAD

2400 4800 4800 6000 6720 24720

CAPACITY

5000 5000 5000 5000 5000 25000

UNDER or OVER LOAD

2600 200 200 1000 1720

280

Production Planning
Example: Rough-Cut Capacity Planning

Rough-Cut Capacity Analysis

The plant is underloaded in the first 3

weeks (primarily week 1) and it is

overloaded in the last 2 weeks of the
schedule.
Some of the production scheduled for week
4 and 5 should be moved to week 1.

Production Planning

Types of Production-Planning
and Control Systems

Production Planning
Types of Production-Planning and Control
Systems

Pond-Draining Systems
Push Systems
Pull Systems
Focusing on Bottlenecks

Production Planning
Pond-Draining Systems

Emphasis on holding inventories

(reservoirs) of materials to support
production
Little information passes through the
system
As the level of inventory is drawn down,
orders are placed with the supplying
operation to replenish inventory
May lead to excessive inventories and is
rather inflexible in its ability to respond to

Production Planning
Push Systems

Use information about customers, suppliers,

and production to manage material flows
Flows of materials are planned and controlled
by a series of production schedules that state
when batches of each particular item should
come out of each stage of production
Can result in great reductions of raw-materials
inventories and in greater worker and process
utilization than pond-draining systems

Production Planning
Pull Systems

Look only at the next stage of production

and determine what is needed there, and
produce only that
Raw materials and parts are pulled from the
back of the system toward the front where
they become finished goods
Raw-material and in-process inventories
approach zero
Successful implementation requires much
preparation

Production Planning
Focusing on Bottlenecks

Bottleneck Operations
Impede production because they have less
capacity than upstream or downstream
stages
Work arrives faster than it can be completed
Binding capacity constraints that control the
capacity of the system
Optimized Production Technology (OPT)
Synchronous Manufacturing

Production Planning
Synchronous Manufacturing

Operations performance measured by

throughput (the rate cash is
generated by sales)
inventory (money invested in
inventory), and
operating expenses (money spent in
converting inventory into
throughput)

Production Planning
Synchronous Manufacturing

System of control based on:

drum (bottleneck establishes beat or
pace for other operations)
buffer (inventory kept before a
bottleneck so it is never idle), and
rope (information sent upstream of the
bottleneck to prevent inventory buildup
and to synchronize activities)

Production Planning
Wrap-Up: World-Class Practice

Push systems dominate and can be

applied to almost any type of production
Pull systems are growing in use. Most
often applied in repetitive manufacturing
Few companies focusing on bottlenecks to
plan and control production.