Production Management
Chapter 1 Manufacturing planning and control
The manufacturing planning and control (MPC) system is concerned with planning and controlling all
aspects of manufacturing, including managing materials, scheduling machines and people, and coordinating
suppliers and key customers. This chapter provides a model for evaluating responses to changes in the
competitive environment.
The main question is: “What should the firm, together with its supply chain partners, do next?”
This chapter is organized around the following four managerial concerns:
- The MPC system defined: What are the typical tasks performed by the MPC system and how do these tasks
affect company operations?
- An MPC system framework: What are the key MPC system components and how do they respond to a
company’s needs?
- Matching the MPC system: How do supply-chain product and process issues affect MPC system design?
- Evolution of the MPC system: What forces drive changes in the MPC system and how do companies respond
to the forces?
The MPC system defined
The task is to manage efficiently the flow of materials, to manage the utilization of people and equipment,
and to respond to customer requirements by utilizing the capacity of our suppliers, that of our internal
facilities, and (in some cases) that of our customers to meet customer demand. Important ancillary
(ondergeschikte) activities involve acquisition of information from customers on product needs and
providing customers with information on delivery dates and product status. The MCP provides information
on which managers make their decisions.
The support activities can be broken into three time horizons: long, medium and short term. In the long term,
the system is responsible for providing information to make decisions on the appropriate amount of capacity
to meet he market demands of the future. In the intermediate term, it is matching supply and demand in
terms of both volume and product mix; focus on providing the exact material and production capacity
needed to meet customer needs. In the short term, detailed scheduling of resources is required to meet
production requirements; this involves time, people, material, equipment and facilities.
To effectively manage the manufacturing process, a number of performance indicators are needed: output
results, equipment utilization, and costs associated with different departments, products, labour utilization
and project completions. Also measures of customer satisfaction are needed. The implications physically and
financially of the activities on the manufacturing floor are collected, summarized and reported through the
MPC system.
An MPC system framework
The MPC system is mostly
imbedded in an enterprise
resource planning (ERP)
system. Today MRP activities
are carried out in more areas of
the firm and differ to meet the
strategic requirements of the
company. The framework is
provided for understanding the
MPC system.
The manufacturing planning
and control system is divided
into three parts.
The top third, or front end, is
the set of activities and systems
for overall direction setting. It
establishes the overall company
direction. Demand management
includes forecasting
customer/end-product
demand, order entry, order
promising, accommodating
1
Chapter 1 Manufacturing planning and control
The manufacturing planning and control (MPC) system is concerned with planning and controlling all
aspects of manufacturing, including managing materials, scheduling machines and people, and coordinating
suppliers and key customers. This chapter provides a model for evaluating responses to changes in the
competitive environment.
The main question is: “What should the firm, together with its supply chain partners, do next?”
This chapter is organized around the following four managerial concerns:
- The MPC system defined: What are the typical tasks performed by the MPC system and how do these tasks
affect company operations?
- An MPC system framework: What are the key MPC system components and how do they respond to a
company’s needs?
- Matching the MPC system: How do supply-chain product and process issues affect MPC system design?
- Evolution of the MPC system: What forces drive changes in the MPC system and how do companies respond
to the forces?
The MPC system defined
The task is to manage efficiently the flow of materials, to manage the utilization of people and equipment,
and to respond to customer requirements by utilizing the capacity of our suppliers, that of our internal
facilities, and (in some cases) that of our customers to meet customer demand. Important ancillary
(ondergeschikte) activities involve acquisition of information from customers on product needs and
providing customers with information on delivery dates and product status. The MCP provides information
on which managers make their decisions.
The support activities can be broken into three time horizons: long, medium and short term. In the long term,
the system is responsible for providing information to make decisions on the appropriate amount of capacity
to meet he market demands of the future. In the intermediate term, it is matching supply and demand in
terms of both volume and product mix; focus on providing the exact material and production capacity
needed to meet customer needs. In the short term, detailed scheduling of resources is required to meet
production requirements; this involves time, people, material, equipment and facilities.
To effectively manage the manufacturing process, a number of performance indicators are needed: output
results, equipment utilization, and costs associated with different departments, products, labour utilization
and project completions. Also measures of customer satisfaction are needed. The implications physically and
financially of the activities on the manufacturing floor are collected, summarized and reported through the
MPC system.
An MPC system framework
The MPC system is mostly
imbedded in an enterprise
resource planning (ERP)
system. Today MRP activities
are carried out in more areas of
the firm and differ to meet the
strategic requirements of the
company. The framework is
provided for understanding the
MPC system.
The manufacturing planning
and control system is divided
into three parts.
The top third, or front end, is
the set of activities and systems
for overall direction setting. It
establishes the overall company
direction. Demand management
includes forecasting
customer/end-product
demand, order entry, order
promising, accommodating
1
