Two key issues arise in the design of Manufacturing Planning and Control (MPC) systems. First, linking MPC system design to the firm’s business strategy for competing in the marketplace. Second, many firms must also integrate MRP and JIT systems, either in new or existing MPC systems.
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Manufacturing Planning and ControlMPC 6th EditionChapter 12Strategy and MPC System DesignTwo key issues arise in the design of Manufacturing Planning and Control (MPC) systems. First, linking MPC system design to the firm’s business strategy for competing in the marketplace. Second, many firms must also integrate MRP and JIT systems, either in new or existing MPC systems.AgendaMaster Production Scheduling (MPS) OptionsMake-to-Order–MPC system includes pre-production engineering and design activities as well as manufacturing and supplier operationsUsed when the product is custom-built to individual specificationsCustomer order is the unit of control in MPSOrder backlog is the critical measurementPlanning bills of material are used extensivelyMajor source of uncertainty is customer time requirementsMaster Production Scheduling (MPS) OptionsAssemble-to-Order–Component inventory is held (to reduce lead times) and assembled according to customer requirementsUsed when manufacturing lead time exceeds customer expectations, variety and cost of end products precludes holding finished items in inventory, and/or modules or options can be combined to satisfy unique customer requirementsKey control point is final assembly schedule (FAS)Planning bills of material are used to represent “average” productMain source of uncertainty is product mixMaster Production Scheduling (MPS) OptionsMake-to-Stock–common when customers place short lead-time (or immediate) orders for standard productsMPS is stated in end items, which are produced to forecast demandCustomer orders are filled directly from stockProcedures for monitoring accuracy of demand forecasts are requiredMain source of uncertainty is forecast errorsDetailed Material Planning OptionsTwo main approaches: time-phased and rate-basedMRP approachJIT approachShop-Floor System OptionsPush (MRP) versusPull (JIT)Large database with high volume of transactionsSimplified control and minimal flow timesMPC system must match market requirements, manufacturing task, and manufacturing process designMarket RequirementsReview customers and target market segments–what are their present needs, what are competitors offering, what are the growth opportunities?What has to be done to serve the chosen markets?Manufacturing TaskDevelop a statement of the manufacturing task that is consistent with and supportive of the marketing strategy.Enables management to recognize that changes may be required in both production processes and MPC systems.Manufacturing Process DesignManufacturing processes tend to change slowly. Manufacturing task, manufacturing process design, and MPC system design are all interrelated.MPC System DesignThe MPC system is a major investment of time and resources. Differences between existing and desired MPC system must be recognized for the transition to occur smoothly.Consistency in the choice of MPC options is critical or a mismatched system will result (e.g. poor mixture of JIT and MRP features)MPC System Design–Master Production Scheduling OptionsMPC System Design–Material Planning OptionsMPC System Design–Shop-Floor System OptionsKawasaki, USAKawasaki produces six types of motorcycles in addition to jet skis at its U.S. plantDemand is highly seasonalAllowing finished-goods inventory stabilizes the workloadManufacturing task–produce standardized products in high volumes at low costMake-to-stock master production scheduling processRate-based material planning with a planning bill of materialsJIT shop-floor scheduling with kanban containersIntegrating MRP and JITThe need to integrateGenerally MRP firms trying to implement JIT aspectsJIT practices may seem to be in conflict with MRP practicesFactory floor changes may require MPC system adjustmentsIntegrating MRP and JITSupporting integration through physical changesJIT support requires reducing the volume of inventory transactionsMaking changes in the flow of materials and production process (e.g. cellular manufacturing)Integrating MRP and JITIntegration techniquesA combination of MRP and JIT requires a mechanism to allow moving back and forthPhantom bills are a common approachPart numbers are carried on the bill of materials but are not actually tracked with inventory transactionsIntegrating MPC Systems with Suppliers and CustomersExpanded view of MPC which considers improvements to the system which includes both upstream suppliers and downstream customersDevelopment of manufacturing strategy includes integrated MPC system across the entire supply chainPrinciplesBecause investment in MPC systems is so large, their design must support the firm’s strategy.A wide range of options are available in designing MPC systems, and the choices must be governed by the firm’s competitive needs.Business and technical specifications need to be considered in designing an MPC system.MPC system design should begin with an analysis of the market requirements to support the firm’s competitive strategy.PrinciplesUnderstanding the manufacturing task is critical in developing the production process design, the MPC system design, and the other elements of the manufacturing infrastructure.The manufacturing process’ particular features need to be considered in choosing among the options in MPC system design.MRP and JIT approaches can be effectively integrated in designing MPC systems.Performance of the company and supply chain can be improved by matching MPC system design to the firm’s competitive strategy.Quiz – Chapter 12In a situation where manufacturing lead time exceeds customer requirements and products can be assembled from modules, an _________-__-___________ approach is most likely.Design of an MPC system begins with an analysis of _________ requirements.Which master scheduling approach requires a high level of attention to forecast accuracy?Which material planning approach is likely to utilize kanbans and level loaded production?Which shop-floor system is likely to carry higher levels of safety stock and work-in-process inventory?
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