Production Planning

and Control
PERENCANAAN DAN PENGENDALIAN
PRODUKSI **

Dr. rer.pol. Sudaryanto

sudaryanto@staff.gunadarma.ac.id

Kompetensi Utama Sarjana Teknik Industri

Mampu mengidentifikasikan, memformulasikan,

dan memecahkan masalah-masalah perancangan
maupun perbaikan sistem integral yang terdiri
dari manusia, material, informasi, peralatan dan
energi secara kreatif dengan menggunakan alatalat pokok analitikal, komputasional dan/atau
eksperimental (KU1)
Mampu
mengimplementasikan
hasil-hasil
pemecahan masalah dan mempunyai wawasan
luas sehingga dapat memahami dampaknya
terhadap konteks sosial, lingkungan dan konteks
lokal maupun global (KU2)
2

Kompetensi Utama Sarjana Teknik Industri

(contd)
Mampu

beradaptasi terhadap teknik dan

alat analisis baru yang diperlukan dalam
menjalankan praktek profesi ke-teknikindustrian-nya (KU3)
Mampu berkomunikasi dan bekerjasama secara efektif (KU4)
Memahami dan menyadari tanggung
jawab profesi dan etika (KU5)
3

PPC - Kompetensi yang

diharapkan

Where are the PPC- related Jobs?

Figure 1.2

Production Planning and Control

The Definition
The production control activity is a chain of
interrelated events that functions as a system.
The decisions are made for different horizons in
time and with different degrees of accuracy. Yet
they must all occur if the ultimate objective is to
be met: that is, to use limited resources
effectively to produce goods that satisfy
customer demands and create a profit for
investors.

Production Planning and Control

The Goals
Effectively utilize limited resources in the
production of goods so as to satisfy customer
demands and create a profit for investors.
Resources include the production facilities, labor
and materials.
Constraints include the availability of resources,
delivery times for the products, and management
policies.

The Manufacturing System

Transforms Inputs to Outputs
Inputs
Man, Money
Machine,
Material,
Management/
Methode
Information

Process
The economic system
transforms inputs to outputs
at about an annual

Outputs
Goods and
Services

Feedback loop

Supplier

Customer
8

Production Planning and Control

Purpose
Effectively utilize limited resources in the production of
goods so as to satisfy customer demands and create a
profit for investors.
Resources include the production facilities, labor and
materials.
Constraints include the availability of resources, delivery
times for the products, and management policies.

The Framework
Coordination

of materials with suppliers

Efficient utilization of people and machines
Efficient flow of materials
Communication with customers

10

Production Planning and Control

General Framework
Resources
Planning

Production
Planning

Demand
Management

Rough-cut
Capacity
Planning

Master Production
Scheduling

Detailed
Capacity
Planning

Detailed Material
Planning
Material and
Capacity Plans

Shop Floor
Systems

Purchasing
11

Hierarchical Planning

Overall Manufacturing Planning

Detailed Materials and Capacity Planning
Execution of Plans

12

Overall Manufacturing Planning

Hierarchical Planning Contd
Demand Management
Forecasting
Order Placement
Order Processing
Order Entry
Spare Parts

13

Overall Manufacturing Planning

Hierarchical Planning Contd
Production Planning
Monthly Plans for Product Families
Master Production Scheduling (MPS)
Weekly Plans for Individual Products
MPS must sum up to Production Plan

14

Overall Manufacturing Planning

Hierarchical Planning Contd
Resource Planning
Long-Range Capacity Requirements
Number of Machines
Number of Employees
Overtime
Shifts
Plants
15

Overall Manufacturing Planning

Hierarchical Planning Contd
Rough-Cut Capacity Planning
Capacity Requirements for Master Production
Scheduling
Overall Factor
Capacity Bills
Resource Profiles

16

Materials & Capacity Planning

Hierarchical Planning Contd

Materials Planning
Production rates can be used in simpler
manufacturing systems.
Materials Requirements Planning (MRP) can be
used in more complex systems. MRP determines
time-phased requirements (period-by-period) for
all purchased and manufactured parts such as
raw materials, components, parts, subassemblies,
etc.
17

Materials & Capacity Planning

Hierarchical Planning Contd

Detailed Capacity Planning

Labor Hours Required
Machine Capacity Required
In an MRP environment, this task is
accomplished by using the Capacity
Requirements Planning (CRP) technique.

18

Execution of Plans
Hierarchical Planning Contd

Shop Floor Control

Conventional

Approach, Process Layout

Similar machines are grouped into
workcenters
Use workorders to schedule the jobs
through workcenters / departments
Schedule machine and other workcenters
Determine start and completion times of
orders
Update the schedule
19

Execution of Plans
Hierarchical Planning Contd
Shop Floor Control (Contd)
Recent

Trend, Manufacturing Cells

Similar parts are grouped into families
Corresponding machine cells are formed
Use production rates
Use schedules to control production (Family
Sequencing, Product Sequencing, Cell Loading, Cell
Scheduling, etc.)
Use Kanban System (Pull, Just-in-Time) to control
production

20

Execution of Plans
Hierarchical Planning Contd

Purchasing

Purchasing Plan

Vendor Search/ selection

Quotation

Order Release

Order Follow-up

Vendor Capacity
21

Planning vs. Control

Plans are made
Results are compared with plans (control)
Results are OK Wait until next control
period
Results are not OK Go to Step 1 (Revise
plans)

22

Planning vs. Control

planning

control

Plans
no

OK?

Revise

yes

Stop
23

Production Planning and Control

The Production Control System
Demand
forecasting

Aggregate
planning

Inventory
management

Materials
requirement
planning

Shop-floor
scheduling
and control

Sales and
order entry

Customer

Production

Shipping
and
receiving

Inventory

Vendors

24

Topics of the Lecture

Introduction

(1)
Demand Forecasting (2-3)
Aggregate Planning & Master production
Scheduling (4-6)
Material Requirement Planning (7-8)
Inventory management (9)
Manpower scheduling (10)
Line balancing (11-13)
Enterprise resource planning (14)
25

Production Planning and Control

Main Functions
Forecasting to predict customer demand on various
products over a given horizon.
Aggregate Planning to determine overall resources
needed.
Materials Requirement Planning to determine all
required components and timing.
Inventory Management to decide production or
purchase quantities and timing.
Scheduling to determine shop-floor schedule of
various components.
26

Forecasting
Objective: predict demand for planning purposes.
Laws of Forecasting:
1. Forecasts are always wrong!
2. Forecasts always change!
3. The further into the future, the less reliable the
forecast will be!
Forecasting Tools:
Qualitative: Delphi, Analogies
Quantitative: Causal and time series models

27

Aggregate Planning
Objective: generate a long-term production plan
that establishes a rough product mix, anticipates
bottlenecks, and is consistent with capacity and
workforce plans.
Issues:
Aggregation: product families and time periods
must be set appropriately for the environment.
Coordination: AP is the link between the high
level functions of forecasting/capacity planning
and intermediate level functions of MRP,
inventory control, and scheduling.
Anticipating Execution: AP is virtually always
done deterministically, while production is
carried out in a stochastic environment.

28

Workforce Planning
How much and what kind of labor is needed to
support production goals?
Basic Staffing Calculations: standard labor hours
adjusted for worker availability.
Working Environment: stability, morale, learning.
Flexibility/Agility: ability of workforce to support
plant's ability to respond to short and long term
shifts.
Quality: procedures are only as good as the people
who carry them out.
29

Capacity/Facility Planning
How much and what kind of physical
equipment is needed to support production
goals?
Basic Capacity Calculations: stand-alone
capacities and congestion effects (e.g.,
blocking)
Capacity Strategy: lead or follow demand
Make-or-Buy: vendoring, long-term identity
Flexibility: with regard to product, volume, mix
Speed: scalability, learning curves

30

Demand Management
Objective: establish an interface between the customer
and the plant floor, that supports both competitive
customer service and workable production schedules.
Issues:
Customer Lead Times: shorter is more competitive.
Customer Service: on-time delivery.
Batching: grouping like product families can reduce
lost capacity due to setups.
Interface with Scheduling: customer due dates are are
an enormously important control in the overall
scheduling process.

31

Material Requirement Planning

Objective: Determine all purchase and
production components needed to satisfy
the aggregate/disaggregate plan.
Issues:
Bill of Materials: Determines components,
quantities and lead times.
Inventory Management: Must be
coordinated with inventory.
32

Sequencing and Scheduling

Objective: develop a plan to guide the
release of work into the system and
coordination with needed resources (e.g.,
machines, staffing, materials).
Methods:
Sequencing:
Gives order of releases but not times.
Scheduling:
Gives detailed release times.
33

Shop Floor Control

Objective: control flow of work through plant and
coordinate with other activities (e.g., quality control,
preventive maintenance, etc.)
Issues:
Customization: SFC is often the most highly
customized activity in a plant.
Information Collection: SFC represents the interface
with the actual production processes and is therefore a
good place to collect data.
Simplicity: departures from simple mechanisms must be
carefully justified.
34

Costs and Benefits of PPC Systems

PPC requires a large # of indirect people
Companies with ineffective PPC system will
have poor customer service, excessive
inventories, low equipment and people
utilization, high rate of part obsolescence,
large number of expediters

35

Efficiency versus
Effectiveness
Efficiency doing something at the
lowest possible cost
Effectiveness doing the right thing to
create the most value to the company

36

What is a Product?
Need-satisfying offering of an organization
Customers buy satisfaction, not parts
May be a good or a service

Examples

P&G

does not sell laundry detergent

P&G sells the benefit of clean
clothes
University ?
Honda ?
37

Characteristics of Goods

Tangible product
Consistent product
definition
Production usually
separate from
consumption
Can be inventoried
Low customer
interaction

1995 Corel Corp.

38

Characteristics of Service

1995 Corel Corp.

Intangible product
Produced & consumed at
same time
Often unique
High customer interaction
Inconsistent product
definition
Often knowledge-based
Frequently dispersed
39

Goods Versus Services

Goods
Can be resold
Can be inventoried

Some aspects of
quality measurable
Selling is distinct
from production

Service
Reselling unusual
Difficult to
inventory
Quality difficult to
measure
Selling is part of
service

40

Goods Versus Services Continued

Goods
Product is
transportable
Site of facility
important for cost
Often easy to
automate
Revenue generated
primarily from
tangible product

Service
Provider, not product
is transportable
Site of facility
important for
customer contact
Often difficult to
automate
Revenue generated
primarily from
intangible service.

41

What is a Service and What is a Good?

If you drop it on your foot, it wont hurt

you. (Good or service?)

Services never include goods and goods

never include services. (True or false?)
42

Goods Contain Services / Services

Contain Goods
Automobile
Computer
Installed Carpeting
Fast-food Meal
Restaurant Meal
Auto Repair
Hospital Care
Advertising Agency
Investment Management
Consulting Service
Counseling
100

75

50

25

Percent of Product that is a Good

25

50

75

100

Percent of Product that is a Service

43

Core Services Performance Objectives

Quality

Flexibility

Operations
Management

Speed

Price (or cost

Reduction)
44

Forces for Change

Typical Responses

Technology
Products
Processes
Systems
Techniques

Marketplace dictates
Company strategy

Manufacturing Strategy

Shorter Product Life Cycles

Time Based Competition
Quality Requirements

Flexibility/Responsiveness
Reduced Overhead costs

Simplification
Automation
Production Cells

Manufacturing
processes
MPC system

MR
P
JIT
45

Generation of New Product

Opportunities

Economic change

Sociological and demographic change

Technological change

Political/legal change

Changes in

market practice
professional standards
suppliers and distributors
46

New Challenges in PPC

From

Local or national
focus
Batch shipments
Low bid purchasing

Lengthy product
development

Standard products
Job specialization

To

Global focus
Just-in-time

Supply chain
partnering

Rapid product
development,
alliances
Mass customization
Empowered
employees, teams

47

Current Issues in PPC

Coordinate the relationships between mutually

supportive but separate organizations.
Optimizing global supplier, production, and
distribution networks.
Increased co-production of goods and services
Managing the customers experience during the
service encounter
Raising the awareness of operations as a
significant competitive weapon

48

The Future of Operations

Outsourcing everything
Smart factories
Talking inventory, automatic retrieval system
Industrial army of robots
Whats in the box
Mass customization
Personalized recommendation

49

Product Life Cycle

Introduction
Growth
Maturity
Decline

50

Products in Various Stages of

Life Cycle
Sales

Introduction

Growth

Maturity

Roller
Blades

Jet Ski

Decline

Boeing
727

Virtual
Reality
Time

51

Product Life Cycle

Introduction

Fine tuning

research
product development
process modification and enhancement
supplier development
New customer
Business Strategy: Promotion, market
penetration, price discount,

52

Product Life Cycle

Growth
Product design begins to stabilize
Effective forecasting of capacity becomes
necessary
Adding or enhancing capacity may be
necessary
Strategy: increase capacity

53

Product Life Cycle

Maturity
Competitors now established
High volume production may be needed
Improved cost control, reduction in options
Strategy: Quality as competitive advantage
Promotion: ?

54

Product Life Cycle

Decline
Unless product makes a special contribution,
must plan to terminate offering
Reduction, liquidation
Search for new business

55

Product Life Cycle, Sales,

Cost, and Profit

Sales, Cost & Profit .

Cost of
Development
& Manufacture

Sales Revenue

Profit
Cash flow

Loss

Time

Introduction

Growth

Maturity

Decline
56