Effective Production Planning is essential in a manufacturing business and
is the foundation on which the manufacturing organization operates. The
manufacturing environment is one of constant change with conditions changing
daily or hourly, customer emergencies, rush orders, machine breakdowns,
quality problems, the list is endless. The only constant that can be counted
on is "Murphy's Law", anything that can go wrong will. These changes
don't happen once a week, they happen many times in the production planning
cycle. There is no way that a manual system can possible keep up.
Production planning is a complex process that covers a wide range of
activities that insures that material, capacity and human resources are
available when needed. If I had to choose one definition for production
planning I think Yogi Berra said it best "if you don't know where you
are going, you might not get there", or more accurately, you probably
won't get there. The only way to effectively know where you are going is to
have a good process to generate a production plan or production scheduling
The production planning document typically starts with a sales forecast, or
sales plan usually supplied by the marketing group. From the production
planning document all other process's start. The production planning document
can include material, labor, capacity, training and should include a backup
plan should things go wrong. Each area of planning is dependent on the other
and must be done in unison. It makes no sense to bring in material if
production can't produce, or plan production if materials are not available.
It requires a collaborative effort between different departments to
effectively bring all aspects of the process together.
Production Planning Module includes both Material Requirements Planning (MRP)
and Forecasting. Production planning looks at actual demand, forecasted demand,
and inventory requirements to generate manufacturing orders, suggested work
orders and suggested purchase orders. After approving the suggested orders,
actual works order and/or purchase orders are generated.
PLN enables the manufacturer to explode the
firm work orders to generate material requirements for purchased items and
subassembly items. PLN processes data in sales orders, purchase orders,
inventory control (on hand, reorder points, order multiples) and work orders in
the system to generate suggested work orders (MORs) for subassemblies and
suggested purchase orders (SPOs) for raw materials (purchased items). The user
can review this data on the screen or printed reports, then approve
Manufacturing Orders and Suggested Purchase Orders quickly and easily to ensure
that the proper inventory stock levels are maintained for subassemblies and
PLN greatly reduces inventory planners time
calculating requirements on a daily basis. EM is powerful enough to generate
production planning every day or multiple times a day if desired. There is no
more waiting for the weekend or running overnight processing is quick. By
knowing when inventory is required the manufacturer can reduce the amount of
inventory necessary to stock on hand. Thus saving much money in inventory
carrying costs and saving on physical storage space. These savings alone can
pay for an entire manufacturing system within one year.
PLN saves the purchasing department many
hours per week in determining what to order, when to order, and how much lead
time to allow. Because it automatically generates purchase orders when
approved, it saves time entering purchase orders. This allows purchasing more
time to find better suppliers and/or better pricing.
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The Macro Production Planning and
Control Systems follow very simple and well established principles.
To produce the Correct Product to meet demand at the required time
To do so at the lowest Practical Cost
To do so with the shortest practical lead
To do so with the maximum degree of simplicity and flexibility
To make the available resources as efficient as possible
The system is designed to
allow a wide range of facilities and options. These are not compulsory and the
user need only use the facilities that he requires.
To ensure that the correct products are manufactured, at
the lowest practical cost, to be available at the right time.
Resource Capacity Planning to enable the user to analyse the available
capacity of men and machines against capacity required by the order situation
or the actual production plan.
To assist in the translation of the over-all requirement into a production
To provide facilities to plan the production schedule in detail and ensure
that production resources are fully utilised without unnecessary under or
Material Requirement Planning to enable the user to correctly schedule the
ordering of raw materials to meet the requirements of the production
To achieve this the Macro system
provides three main subsystems:
Product Net Requirement Planning
Production Planning including Materials Planning and Resource Planning.
first phase of Production Planning is deciding what products to manufacture.
The basic planning reports to provide this information are:-
Sales Forecast Sub-system.
This is an optional facility which allows the recording of Sales Forecasts by
product or product group by period (week or month) for as many periods needed
for the planning horizon. This facility is used for companies who manufacture
fully or partially to a sales or manufacturing plan.
Master Planning Facility
allows the user to load a production budget by product by period (week or month)
for as far in the future as needed. The Master Plan is basically a long term
planning aid. Materials planning and capacity planning can be carried out
against the Master Plan.
Order System Reports. The Customer Order Systemrecords all orders received for future
delivery. The order system provides many different types of order analysis
including time based delivery requirement analysis
Current Work in
Progress Stock Requirement and Availability Report.
. The Macro system basis much of its product requirement planning facilities on
the concept of stock and availability ie. what stock is available, and when it
is available. This takes into account the stock on hand, stock becoming
available at a later date and the current and future demand on that stock. The
stock and availability is the key report which identifies, by time period, the
stock that is required and the stock that will be available, with stock
shortfalls by period, cumulative and in total. Requirements are obtained from
the Sales Forecast and/or the Customer Order Book. Availability is determined
from the Stock on Hand, the Purchase Orders Outstanding, Production Plan and
Work in Progress. This report has the ability to explode a product to an
unlimited number of levels and to carry out independent stock and availability
calculations at each level. i.e.. it operates at the component level as well as
the product level. The result of this process is available on a report or as an
Materials Requirement Planning.
The objective of the Material Requirements
Planning is to ensure that the Materials required to complete the planned
production are available, and if they have to be ordered, that they should be
ordered in good time, and received before they are needed. Materials
Requirement Planning Reporting is the next level of breakdown of the Production
Reports are available at several levels:-
M.R.P. based on orders received but not dispatched (or
on the Production Master Plan). This report is produced well before production
start to check materials on hand, and on order, to requirements based on the
required production level. This is normally a long term planning report.
MRP based on the Stock and Availability Report
M.R.P. based on the actual production plan. The source of the quantities, and
product to be produced is by production period. It is normally printed as
soon as a detailed production plan is loaded for a particular period. The
M.R.P. report has the same explosion and multi-level facilities as the Stock
Requirement and Availability Report. i.e. Explosion to an unlimited number
of levels and full Stock and Availability planning at each level.
All Material Requirements Reports follow the same basic principles. The
product requirement is determined from one of several optional sources. (Stock
Requirement and Availability Shortfall, Production Plan, Master Production
Plan, Sales Forecast, Order Book etc.) The system uses the Bill of Materials,
which describes the exact make-up of each product to determine the unit
material requirements. Stock on hand is obtained from the Raw Materials Stock
Master data base. Stock on order is obtained from the Purchase Order data
base . The M.R.P. reports are time based and show shortfalls and
availability/net shortfall to as many levels of explosion as required. All
shortfalls are shown in two periods, the period required, and the period in
which ordering is required to ensure on time delivery.
is similar to Materials Requirement Planning, except that the resources that are
analysed are capacity related.
These can be:-
Machines or Processes or Cost Centers. Machines can be recorded individually
or by machine group. Any other production facility can be defined as a
production cost centre.
Labour may be recorded in as many categories as required.
The capacity information (number of
installed units, capacity hours per production period resource efficiency rating
and availability) is stored on the relevant record in the Resource Master File.
This enables the system to calculate the total availability of each resource.
The Bill of Materials/Standard
Costing System contains details of the resources required to manufacture each
product. The combination of the Production Plan quantities and the resource
requirement ex the Bill of Materials enables the system to calculate the total
requirement of each resource.
Planning Reports are all time period based. Resource planning can also be
expanded to an unlimited number of levels.
Planning Reports are available from:-
Stock and Availability Data Base
The Production Master Plan
Production Job Master File
The Master Scheduling Master File
An optional Master Scheduling System will allow the user to carry out Capacity
Planning on a closed loop finite capacity basis. The plan may be modified and
replanned as often as required until an acceptable plan is created. This may
then be copied to the Production Job Master File to become the actual plan.
This facility creates the actual job schedule, job by job, on a practical basis
and provides finite capacity planning i.e. once a resource is fully loaded for a
period later jobs are planned to commence at a later date when the resource is
available for use. The system provides for final product manufacture and
sub-assembly. i.e. the time relationship between component manufacture and the
final product is supported.
The system contains a model of the
companies production resources and a full factory calendar for the period being
planned. This model is used to create a model of the capacity available (fully
time based). The Production Jobs, or Stock and Availability reporting is used,
with the Bill of Materials, or the Production Routing, to create a model of the
capacity required (also time based).
The scheduling system matches requirement to availability on a finite basis (ie.
a resource cannot be overloaded - over use of capacity moves the process to a
later time period, so that the effect of over utilisation is late delivery)
Information that may be modified for
each trial schedule is as follows:-
Production Units or Machines to be used in the manufacturing process
Production Planning level i.e. The level of detail to which the current trial
plan must be calculated
Job Planned Start Dates
Efficiency of machines or processes
Utilisation time of processes
PRODUCTION PLANNING AND SCHEDULING
To fully utilize this functionality, the following
products should be evaluated
The production and planning module
provides for accurate and efficient maintenance of product Bill of Materials BOM
and process formulations (routing), thus achieving strict formula/recipe
accuracy and accurate production costing data.
One important aspect of this module is the capabilities of product actual cost
based on direct cost, and comparison to the product standard cost.
The production module provides a highly accurate product structure definition
the same way the product is actually produced. This accuracy helps to monitor
the issued materials needed for production and the actual number of hours used
for production and finally the production costs. The multi-level BOM data is
also utilized to generate Materials Requirement Plans MRP through exploding the
Master Production Schedule MPS demands. Both MPS and MRP are generated at
anytime according to business needs and take all open orders into requirements
netting calculation to generate a production plan and a purchasing plan.
The planning system allows changes to the
plan according to customer needs or forecast changes as well as demand
fluctuations due to marketing promotions or seasonality factors. The MRP can be
generated anytime to reflect changes of order data, inventory status, or
inventory policies thus ensuring that sufficient quantities of materials arrive
on time at the plant to meet customer due dates.
Definition of final product and sub-assembly
bills of materials (BOM)
Definition of product routings, operations and
Entry of sales forecast for sales items as
production planning input
Shop orders linked to inventory transactions
(Multiple and single issue)
Standard and actual costing of products (Material
Automatic calculation of product standard cost
Entry of actual materials and hours per operation
to calculate product actual cost
User defined shop calendars for each work center
Support of product lot control and automatic
material allocation to shop orders
Support of product lot tracing from product up-to
Generation and editing of Master Production
Schedule (MPS) for final products
Generation and editing of Materials Requirement
Plan (MRP) for raw materials
Posting of shop floor transactions to general
Multiple inquiries of open orders, materials
shortages, planning and work center capacity
Production and planning reports and master files