H2 Production planning system
Priority (demand): relates to what products are needed, how many are needed and when they are
needed.
Capacity: the capability of manufacturing to produce goods and services.
The strategic business plan
This is a statement of the major goals and
objectives the company expects to
achieve over the next 2 to 10 years or
more. It has four directions: marketing,
finance, production and engineering.
The production plan (sales &
operations plan)
Production management is concerned
with the following:
the quantities;
desired inventory levels;
the resources of equipment;
the availability of the resources needed.
Production planners must devise a plan to satisfy market demand within the resources available to
the company. There must be a balance between priority and capacity.
The master production schedule (MPS)
The MPS is a plan for the production of individual end items. It breaks down the production plan to
show, for each period, the quantity of each end item to be made. The MPS is developed for
individual end items (each model of tricycle).
The material requirements plan (MRP)
The MRP is a plan for the production and purchase of the components used in making the items in
the master production schedule. It shows the quantities needed and when manufacturing intends to
make or use them.
Purchasing and production activity control (PAC)
This represents the implementation and control phase of the production phase of the production
planning and control system. Purchasing is responsible for establishing and controlling the flow of
raw materials into the factory. PAC is responsible for planning and controlling the flow of work
trough the factory.
Capacity management
At each level of the planning and control system, reconciliation with resources must be made (must
obtain the right resources or change plan).
Inadequate resources = missed production schedules. Resources significantly exceed planned
production = idle resources.
Sales and operation planning (SOP): represents a plan by realizing the strategic plan by setting and
achieving objectives and to give feedback to revise (corrigeren) the strategy. Multidisciplinary: sales.
Marketing, R&D, production, maintenance, procurement, HRM and finance.
Sales and operations planning has several benefits:
1
, Updating the strategic business plan;
Managing change;
It ensures that the various department plans are realistic and coordinated and support the
business plan;
Provides a realistic plan that can achieve the company objectives.
It permits better management of production, inventory and backlog.
The S&OP plan doesn’t focus on producing a high-level plan for the use of company resources but on
producing a high-level plan for the use of company resources.
Als prioriteiten aangepast moeten worden op een planning level door capaciteitsproblemen dan
wordt dat weer teruggeworpen op de andere levels.
MRP II: this provides coordination between marketing and production. It’s a fully integrated planning
and control system.
MRP systems evolved two changing conditions:
1. Computers and information technologies (IT).
2. Movement toward integration of knowledge and decision making in all aspects of direct and
indirect functions.
ERP: this is similar to the MRP II except it does not dwell on manufacturing (staat niet stil bij
fabricage). Many ERP systems are capable of allowing managers to share data between firms,
meaning that these managers can potentially have visibility across the complete span of the supply
chain.
Dingen die aangepast kunnen worden om meer vraag aan te kunnen:
People can be hired and laid off, adding shifts/overtime and short time.
Inventory can be build up
Work can be subcontracted of extra equipment leased.
Basic production plan strategies:
Chase: vary production rates to meet changes in demand. Often used when inventory cannot
be used or when resources are flexible and inexpensive to change (inventories can be kept to
a minimum).
Level: establish average demand level and set production rate that level. Often used when
resources difficult or very expensive to change.
Hybrid: use a combination of some chase and some level.
Subcontracting: always producing at the level of minimum demand and meeting any
additional demand trough subcontracting. This means buying extra amounts demanded or
turning away extra demand. The major advantages are production cost, but buying extra
amounts can be greater than plants (fabriek).
Backlog: this is for delivery in the future and does not represent orders that are late or past due.
Resource planning: once the preliminary production plan is established, it must compared to the
existing resources of the company. 2 questions could be asked:
1. Are the resources available to meet the production plan?
2. If not, how will the difference be reconciled?
2
Priority (demand): relates to what products are needed, how many are needed and when they are
needed.
Capacity: the capability of manufacturing to produce goods and services.
The strategic business plan
This is a statement of the major goals and
objectives the company expects to
achieve over the next 2 to 10 years or
more. It has four directions: marketing,
finance, production and engineering.
The production plan (sales &
operations plan)
Production management is concerned
with the following:
the quantities;
desired inventory levels;
the resources of equipment;
the availability of the resources needed.
Production planners must devise a plan to satisfy market demand within the resources available to
the company. There must be a balance between priority and capacity.
The master production schedule (MPS)
The MPS is a plan for the production of individual end items. It breaks down the production plan to
show, for each period, the quantity of each end item to be made. The MPS is developed for
individual end items (each model of tricycle).
The material requirements plan (MRP)
The MRP is a plan for the production and purchase of the components used in making the items in
the master production schedule. It shows the quantities needed and when manufacturing intends to
make or use them.
Purchasing and production activity control (PAC)
This represents the implementation and control phase of the production phase of the production
planning and control system. Purchasing is responsible for establishing and controlling the flow of
raw materials into the factory. PAC is responsible for planning and controlling the flow of work
trough the factory.
Capacity management
At each level of the planning and control system, reconciliation with resources must be made (must
obtain the right resources or change plan).
Inadequate resources = missed production schedules. Resources significantly exceed planned
production = idle resources.
Sales and operation planning (SOP): represents a plan by realizing the strategic plan by setting and
achieving objectives and to give feedback to revise (corrigeren) the strategy. Multidisciplinary: sales.
Marketing, R&D, production, maintenance, procurement, HRM and finance.
Sales and operations planning has several benefits:
1
, Updating the strategic business plan;
Managing change;
It ensures that the various department plans are realistic and coordinated and support the
business plan;
Provides a realistic plan that can achieve the company objectives.
It permits better management of production, inventory and backlog.
The S&OP plan doesn’t focus on producing a high-level plan for the use of company resources but on
producing a high-level plan for the use of company resources.
Als prioriteiten aangepast moeten worden op een planning level door capaciteitsproblemen dan
wordt dat weer teruggeworpen op de andere levels.
MRP II: this provides coordination between marketing and production. It’s a fully integrated planning
and control system.
MRP systems evolved two changing conditions:
1. Computers and information technologies (IT).
2. Movement toward integration of knowledge and decision making in all aspects of direct and
indirect functions.
ERP: this is similar to the MRP II except it does not dwell on manufacturing (staat niet stil bij
fabricage). Many ERP systems are capable of allowing managers to share data between firms,
meaning that these managers can potentially have visibility across the complete span of the supply
chain.
Dingen die aangepast kunnen worden om meer vraag aan te kunnen:
People can be hired and laid off, adding shifts/overtime and short time.
Inventory can be build up
Work can be subcontracted of extra equipment leased.
Basic production plan strategies:
Chase: vary production rates to meet changes in demand. Often used when inventory cannot
be used or when resources are flexible and inexpensive to change (inventories can be kept to
a minimum).
Level: establish average demand level and set production rate that level. Often used when
resources difficult or very expensive to change.
Hybrid: use a combination of some chase and some level.
Subcontracting: always producing at the level of minimum demand and meeting any
additional demand trough subcontracting. This means buying extra amounts demanded or
turning away extra demand. The major advantages are production cost, but buying extra
amounts can be greater than plants (fabriek).
Backlog: this is for delivery in the future and does not represent orders that are late or past due.
Resource planning: once the preliminary production plan is established, it must compared to the
existing resources of the company. 2 questions could be asked:
1. Are the resources available to meet the production plan?
2. If not, how will the difference be reconciled?
2
