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MANUFACTURING PLANNING

AND CONTROL SYSTEMS

[WEEK 10]

IML425E 2015-2016 Fall

Assistant Professor Dr. Erkan Gunpinar

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Motivation Three major determinants of the market share and

profitability of any organization are:

1. Cost of manufacturing products

2. Quality

3. Lead time

Achieve goals of:

1. Minimum cost

2. High quality3. Minimum lead time

Manufacturing Planning and Control Systems

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Manufacturing Planning and Control Systems

MPCS

Objective: Desired products are manufactured:- at the right time,

- in the right quantities,

- meeting quality specifications

- and at minimum cost.

Benefits:

- Reduced labor/overtime costs

- Shorter manufacturing lead times

- Reduced inventories

- Etc.

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MPCS Driving force behind any manufacturing activity is the

demand for the products.

Determining end item demand Translating end itemdemand into feasible production

plan

What are processes?

- Define how we do things!

(Step 1 Step 2 Step 3 etc)

What is the role of MPCS?

- Plans the resources that processes use (i.e. people,equipment, material).

- Plans for what processes will be used in the future.

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MPCS

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Resource

Planning

Sales and operations

planning

Demand

management

Master production

scheduling

Detailed capacity

planning

Detailed material

planning

Shop-floor

systems

Supplier

systems

EnterpriseRe

sourcePlanning(ERP)System

Front End

Engine

Back end

MaterialRequirements

Plans (MRP)

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Major elements of MPCS

Demand management

Aggregate production planning

Master production schedule

Rough-cut capacity planning Material requirements planning

Capacity planning

Order release

Shop-floor scheduling and control

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Basic framework for MPCS

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Demand management

Prime mover of any production activity.

Encompasses activities such as:

- Demand forecasting- Order transactions entry

- Customer contact-related activities

- Etc.

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Demand forecasting Estimating future demand

1. Qualitative approach relies on the opinions of experts topredict certain events of interest.

- Surveys, questionnaires.

- Based on experience and intuition.

- Good for long range planning2. Explanatory approach is based on causal relationships.

- Econometric models and system dynamics models.

(growth in economy increases employment increases

buying power of people increases the demand for variousproducts)

3. Descriptive approach is based on statistical models

- Extension of the past performance into the near future.

(Moving average and exponential smoothingapproaches)

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Moving average approach

An average of number of past observations are used to

compute the next day forecast.

+

(=+

)

where +=next forecast for future periods

=demand observations through period

( 1,2, ,)

=average of the most recent observations

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Example

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Exponential smoothing approach

Weight is attached to the moving average approach.

Weight decreases with the age of data.

+ (1)

where += forecast for future periods

=actual demand for period

=smoothed statistic for period

=averaging the demand of the first ( 1)

periods

=smoothing constant

(lie between 0.1 and 0.3)

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Example

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Aggregate production planning

Aggregate the information being processed.- a large variety of products

- time varying demand

- fixed available sources

- a planning horizon

Planning horizon is the time span for which plans are made.

(varies from 6 to 18 months)

Product demand is expressed in production hours or plant

hours.

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Cont.

Production planning is concerned with determining

optimal production, inventory, work force levels to meetdemand fluctuations.

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Cont.

Production Strategy: The goal of this strategy is tocontinuously produce an amount equal to the average

demand.

(accumulating inventories)

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fulfill

1

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Illustration17

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Master production schedule

It is usually linked to manufacturing where the plan indicates

when and how much of each product will be demanded.

Output of an aggregate production plan does not indicate

individual products.

MPS: Disaggregation into individual products

Output: Master Production Schedule (MPS)

MPS executable?

- No, further analysis is needed for the material and capacity

requirements.

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MPS - Illustration

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20

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Rough-cut capacity planning Objective: ensure the feasibility of master production

schedule.Average amount of work for each product family can be

computed using item`s bill of materials.

Resource profile = amount of work by resource

(Available Resources >= Resource Requirements) If available resources are less than required overtime,

subcontracting, hiring.

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Illustration

Early involve in potential capacity issues and try to find

any solutions to fix them before they happen!

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Material Requirements Planning (MRP)

Information system consisting of logical procedures formanaging inventories of component assemblies, sub-assemblies, parts and raw materials in a manufacturingenvironment.

Key concepts:

1. Product structure and Bill of Materials (BOM)

2. Independent versus dependent demand

3. Parts explosion

4. Gross requirements

5. Common-use items

6. Etc.

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Product structure and BOMA product may be made from one or more assemblies, sub-

assemblies and components.

BOM is an engineering document that specifies the

components and sub-assemblies required to make a product.

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parent

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Gunpinar et al. 2008

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25

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MRP key concepts

Independent demand: demand for the end items originatesfrom customer orders and forecasts.

Dependent demand: demand by a parent item for itscomponents.

Parts explosion: requirements for the subassemblies,components and raw materials for a given number of end-items.

(explosion of parents into their components)

Gross requirements: determine the amounts of eachcomponent item required to obtain one parent item.

(BOM possesses this information)

(Demand of Comp.x= Demand of product * No. of comp.x)

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Example

If the demand for end product E1 in period 7 is 50 units for

the previous BOM in page 20, determine the dependent

demand (gross requirements) for subassemblies and

components.

- Demand of S1 = 50 x demand of E1 = 50 units

- Demand of S2 = 50 x demand of E1 = 100 units

- Demand of C1 = 50 x demand of S1 = 50 units





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MRP key concepts

Common-use items: many raw materials and componentsmay be used in several subassemblies of an end item and

several end items.

(components C2 and C4 are common to both E1 and E2)

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Cont.

On-hand inventory: initial inventory for some of thecomponent items are available from previous productionruns.

Scheduled receipts: the orders placed now are delivered into

some future periods. Net requirements = gross requirements on-hand

requirements

Planned order releases: process of releasing componentitems for production or purchase.

Lead time: time it takes to produce or purchase a part.

Lead time offsetting: manufacture or purchase of componentsmust be offset by at least their lead times to ensureavailability of these items for assembly into their parent items.

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Example

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Offset three weeks

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Capacity planning

Planned order releases are tentative because of the

capacity limitation of work centers

Check feasibility of production plans develop an

executable manufacturing plan

A number of decisions should be made:

1. Exploring overtime/subcontracting options

2. Developing alternative process plans for effective

resource utilization

3. Inventory options

4. Determining sources such as machine tools

5. Etc.

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Order release

Directive to work Orders are released to the shop floor once production plans

are executable.

Documents accompanying the order:

1. material inventories allocated to the order2. routing sheets (operation sequences, machines)

3. appropriate shop records (job cards, parts lists)

Important activities:

1. scheduling of job orders on the work centers2. allocation of jigs and fixtures

3. loading work centers considering optimal loading conditions

4. coordination of material handling, storage

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Example of a routing sheet

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Shop-floor control

Schedule adherence is of primary concern for the work

centers and the vendors.

Random events such as failure of machine tools or other

equipment affect schedule adherence product delivery

To minimize the impact of random events, efficient shop-

floordata collection and information system is required.

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Data collection

Handwritten reports

Manual data entry terminals

Bar code readers and sensors

(automatically update an item`s progress through the shop floor)

Voice data entry system

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Work order status

Work order status is updated several times per week and

is used:

- To monitorthe progress of manufacturing activities

- To determine priorities for scheduling jobs in the shop

- To control work in progress

- To provide output data for capacity control purposes

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Bar code systems for shop-floor control

Used for:

- Item identification for inventory control

- Work-in-process tracking

- Distribution tracking- Monitoring the status of items in manufacturing

Major elements are symbology, printer, medium, scanner,

decoder.

Bar code symbology is the process of converting a

computer message into bar code symbol.

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Steps for barcode symbology1. Establish the type of data to be represented and the

number of characters in the message.

2. Translate the human-readable information into a binarysequence.

(industrial 2 of 5bar code family)

3. Create a bar space pattern representing the binary word

(black bars and white spaces)

(narrow bar

0, wide bar

1 for industrial 2 of 5 code)(http://www.barcodeman.com/info/c2of5.php)

4. Format the bar code characters into a bar code symbol

(add start and stop margins)

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2 of 5 Code Character Encodation

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Bar code elements

Medium: optical storage device on which bar code

symbols are printed.

(adhesive labels, cards)

Printing mechanism deposits ink on the medium.

(ink-jet, laser)

Scanner: binary data encoded in a bar code symbol is

extracted by an optical system.

(emitter, detector, optical lens) Bar code reader: decoder acts as data interpreter

provided by the scanner.

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Bar code readers

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Framework for shop-floor control using bar codes

When an order arrives at a work center, operator scans the

bar code with the help of a bar code reader attached to amicro computer.

Microcomputers are linked to a main computerwhere

operator retrieves updated process planning and scheduling

information.

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Operations scheduling

Two major difficult activities are performed:1. Work orders are assigned to work centers

(machine loading).

2. Sequence of each work is determined

(job sequencing).

One of the most important objective for operations scheduling

is to meet due dates.

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Scheduling and Loading

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Job sequencing and priority rules

Total number of jobs may exceed the number of work

centers.

Priority rules:

- First-come, first-serve (FCFS)

- Shortest processing time (SPT)

- Earliest due date (EDD)

- Least slack (LS)- Etc.