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Lecture Principle of inventory and material management - Lecture 3

Lecture 3 - Production Planning System. Manufacturing is complex. Some firms make a few different products, whereas others make many products. However, each uses a variety of processes, machinery, equipment, labor skills, and material. To be profitable, a firm must organize all these factors to make the right goods at the right time at top quality and do so as economically as possible. It is a complex problem, and it is essential to have a good planning and control system. | Lecture 3 Production Planning System Books Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGraw-Hill/Irwin. Manufacturing’s Objectives The goal of manufacturing is to produce The right goods Of the right quality In the right quantities At the right time At minimum cost Objectives Manufacturing Planning and Control System Sales and operations planning (SOP) Making production plan Developing production plan Market to stock production plan Market to order production plan Four Basic Questions What must we get? What do we already have? What does it take to make it? What are we going to make? Priority The APICS Dictionary defines priority as “the relative importance of jobs, i.e., the sequence in which . | Lecture 3 Production Planning System Books Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGraw-Hill/Irwin. Manufacturing’s Objectives The goal of manufacturing is to produce The right goods Of the right quality In the right quantities At the right time At minimum cost Objectives Manufacturing Planning and Control System Sales and operations planning (SOP) Making production plan Developing production plan Market to stock production plan Market to order production plan Four Basic Questions What must we get? What do we already have? What does it take to make it? What are we going to make? Priority The APICS Dictionary defines priority as “the relative importance of jobs, i.e., the sequence in which jobs should be worked on.” Priority refers to what is needed, how much is needed, and when it is needed. Capacity The APICS Dictionary defines capacity as “the capability of a worker, machine, work center, plant or organization to produce output per time period.” Production Plan Master Production Schedule (MPS) Material Requirements Plan (MRP) Production Activity Control (PAC) Resource Requirements Plan (RRP) Rough-Cut Capacity Plan (RCCP) Capacity Requirements Plan (CRP) Input/Output Control Operation Sequencing Strategic Business Plan Priority Management Techniques Capacity Management Techniques Manufacturing Planning and Control System Strategic Business Plan A statement of the major goals and objectives the company expects to achieve over the next 2-10 years or more. broad/general direction low level of detail long-range forecasts responsibility of senior management includes participation from Marketing, Finance, and Production usually reviewed every six months to a year .