Managing Production and Supply Chains

An introduction to the ProSim production management

simulation

ProSim A virtual company which

manufactures & markets three products (X, Y, Z)

Existing supply chain processes in place for key Marketing & Sales, Production Planning & Control, Purchasing & Payment

You will manage the PP&C process Process redesign or supply chain

restructuring are out of scope for now

Products Bills of MaterialsToy d

oll

Toy car w

/doll

Toy house w/ca

r & doll

Process Layout

Take a thinking break

What is the goal … or The Goal? How is this measured? What do we need information-wise to

make Goal oriented decisions? What analysis or information systems

based tools might help with the details and mechanics?

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Structural Issue: Rough Cut Capacity Limit

Visit ProSimPlanner Worksheet Where is the bottleneck? Maximum throughput? Assumptions regarding labor

productivity, efficiency, and rejects

Structural Issue: Make vs. Buy for Parts

Purchase cost? Make cost:

• Labor (labor productivity?)• Machine time (machine efficiency?)• Materials (reject rate?)

Sales: Estimating Customer Demand

Products are produced based on weekly schedules

Products are shipped at the end of each ‘month’ (i.e., every 4th week at the end of weeks 4, 8, 12, …)

Last year’s monthly demand data are available

Current month sales order base forecasts are adjusted weekly

Production Planning: What to produce week by week

Master Production Scheduling (MPS) Materials Requirements Planning

(MRP)

Human Resources: Operator Hiring & Training

For ‘simplicity’ we will only use workers 1 thru 9 this term; you can fire if you want but cannot hire (or re-hire).

Purchasing: Order size for parts?

Parts demand? Ordering & setup costs? Holding & carrying costs? Classic EOQ conclusion?

Purchasing: Ordering materials

Materials demand? Ordering & setup costs? Holding & carrying costs? Classic EOQ conclusion? (watch time

units – week, month, year?) Volume discounts? Adjusted EOQ conclusion?

Plant Management: Plant level decisions

Quality control plan Facility maintenance plan

Production Scheduling: Assigning operators, hours, machines, products & parts

True execution point – creating the weekly schedule

Communicate plant managers and purchasing decisions

Implement human resources recommendations

Convert production planners estimates to actions

Where we go from here It’s a deep looking pool but time to

jump in and get started Complete the reading and

assessment Look for in class lecture help

Managing Production and Supply Chains

End of presentation