Chapter 1

Chapter 1. Manufacturing Planning and Control (MPC).

The context of MPC:

1. Internationalization. International supply chains (networks).

2. The Role of the Customer. The need for customer responsiveness and flexibility.

3. Increasing Use of Information Technology. The need for effective communication and coordination within and between firms. Enterprise Resource planning (ERP).

The MPC Role:

The essential task of the MPC system is efficiently manage the flow of materials, the utilization of people and equipment, and to quickly respond to customer requirements by utilizing both suppliers and internal resources.Typical MPC Support Tasks:

Plan capacity requirements and availability to meet marketplace needs.

Plan for materials to arrive on time in the right quantities needed for production.

Maintain appropriate inventories of raw materials, work in progress, and finished goods.

Schedule production activities so people and equipment are working on the correct things. Provide information to managers, suppliers and customers on production activities.

Respond when things go wrong and unexpected problems arise.

Costs of MPC Systems:

There is a substantial initial cost.

There is a significant ongoing operational cost

Potential Benefits of MPC Systems:

Reduced lead time/increased delivery speed

Reduced inventory

Increased flexibility

Increased labor productivity

Improved coordination with suppliers

Better Customer Service.An MPC System Framework:There are three phases in the MPC system (Figure 1)1. Front end: Create the overall manufacturing plan:

Demand management

Resource planning

Sales and operations planning

Master production scheduling

The Sales and operations plan is an overall aggregate plan for production. Its disaggregating results in the master production schedule which specifies which end items to produce and when. The resource planning provides the basics for managing the match between manufacturing plans and capacity2. Engine: Perform the detailed planning of material and capacity needs.

Detailed capacity planning Detailed material planning

Material and capacity plans

Materials requirements planning (MRP) systems determines (explodes) the period by period plans for all component parts and raw materials required to produce all products in the MPC

2. Back end: Execute the plan

Matching The MPC System with the Needs of the Firm:

Choice of system depends on the type of manufacturing system, the degree of supplier integration, needs of management, the firms strategy, and the competitive environment.

An MPC Classification Schema: (Figure 1.2)

Evolution of The MPC System (Figure 1.3):

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