MANUFACTURING PLANNING & CONTROL

1. RESOURCE PLANNING SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL MASTER PDN SCHEDULE Front End DETAILED CAPACITY PLANNING DETAILED MATERIAL PLANNING Simplified – The “Big” Picture E N T E R P R I S E R E S O U R S E P L A N N I N G S Y S T E M - E R P Engine MATERIAL & CAPACITY PLANS SHOP FLOOR SYSTEMS SUPPLIER SYSTEMS Back End

2. MPC CLASSIFICATION SCHEMA PROJECT SMALL BATCH – JOB SHOP LARGE BATCH PROCESSING (MRP) NUMBER OF SUBPARTS REPETITIVE (LINE) CONTINUOUS FLOW SECONDS MINUTES DAYS WEEKS MONTHS TIME BETWEEN SUCCESSIVE UNITS Examples: Oil, Food, Drugs, Watches, TVs, Trucks, Planes, Houses, Ships

3. Sources Force for Change Typical Response MANUFACTURING PLANNING & CONTROL Marketplace Dictates Company Strategy Shorter Product Life Cycles Time-based competition Supply Chain Partnerships Quality Requirements Technology Products Processes Systems Techniques Manufacturing Strategy Flexibility/responsiveness Reduced overhead costs Evolutionary Responses to Change Manufacturing Processes Automation Production cells Simplification MPC System MRP JIT Cross-company Linkages

4. (Based upon the Manufacturing Environment) Customer Order De-coupling WIP Parts & Matls Raw Material Finished goods Inventory Location Supplier Customer Order De-coupling Point Engineer to Order (ETO) Assemble to Order (ATO) Make-to-Order (MTO) Make-to-Stock (MTS) Environment

5. Strategic Planning (Business Planning) SALES AND OPERATIONS PLANNING (S&OP) Sales and Operations Planning (Volume) Marketing Planning Financial Planning Merges Aggregate Planning with Sales Involvement Resources Planning Demand Management Sales Plan Operations Plan Master Production Schedule (Mix) Rough-cut capacity planning Front End MPC Boundary

6. Scope of ERP Enterprise Resource Planning Enterprise planning Models Manufacturing and Logistics Manufacturing Planning and Control Sales & Operations Planning (Front End) Material & Capacity Planning (Engine) Material & Vendor Management (Back End) Enterprise performance measures Human Resource management Data warehouse Finance Report generation Sales & Marketing Transaction processing

7. SALES AND OPERATIONS PLANNING (S&OP) Sales and Operations Planning (Volume) Resources Planning Demand Management Master Production Schedule (MPS) Merges Aggregate Planning with Sales Involvement E N T E R P R I S E R E S O U R S E P L A N N I N G S Y S T E M - E R P Rough-cut capacity planning Front End Engine Detailed Material Planning (MRP)

8. RESOURCE PLANNING SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL MASTER PDN SCHEDULE Front End Routing file BOM Inventory Status DETAILED MATERIAL PLANNING (MRP) Materials Requirements Planning E N T E R P R I S E R E S O U R S E P L A N N I N G S Y S T E M - E R P TIME-PHASED REQUIREMENTS (MRP) RECORDS DETAILED CAPACITY PLANNING Engine MATERIAL & CAPACITY PLANS Back End SUPPLIER SYSTEMS SHOP FLOOR SYSTEMS

9. SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL Distribution Requirements Planning (DRP) CUSTOMERS MASTER PDN SCHEDULE Front End DETAILED MATERIAL PLANNING DRP LINKS TO MPC Engine VENDORS SUPPLIER SYSTEMS Back End Internal MPC Boundary

10. Strategic Planning (Business Planning) MANUFACTURING PLANNING & CONTROL Distribution Requirements Planning (DRP) Sales and Operations Planning (Volume) Distribution Requirements Planning (DRP) Master Production Schedule (Mix) CUSTOMERS VENDORS Manufacturing Requirements Planning E N T E R P R I S E R E S O U R S E P L A N N I N G S Y S T E M - E R P PHYSICAL DISTRIBUTION PHYSICAL SUPPLY TRANSFORMATION

11. SUPPLY CHAIN MANAGEMENT DISTRIBUTION REQUIREMENTS PLANNING Through manufacturing And distribution chain To Customer From Supplier Distribution Inventory Finished Factory Inventory Raw Material Inventory In-process Inventory Selling from Inventory customers suppliers Pro- curement orders MPS orders Shop orders Factory orders Distribution orders Customer orders

12. RESOURCE PLANNING SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL MASTER PDN SCHEDULE Front End DETAILED CAPACITY PLANNING DETAILED MATERIAL PLANNING With JIT Engine MATERIAL & CAPACITY PLANS SHOP FLOOR SYSTEMS SUPPLIER SYSTEMS Back End

13. Long Range RESOURCE PLANNING SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL ROUGH-CUT CAPACITY PLANNING MASTER PDN SCHEDULE Medium Range CAPACITY REQUIREMENTS PLANNING DETAILED MATERIAL PLANNING Hierarchy of Capacity Planning Short Range FINITE LOADING INPUT/OUTPUT ANALYSIS SHOP FLOOR SYSTEMS VENDOR SYSTEMS

14. RESOURCE PLANNING SALES & OPN PLANNING DEMAND MANAGEMENT MANUFACTURING PLANNING & CONTROL ROUGH-CUT CAPACITY PLANNING MASTER PDN SCHEDULE DETAILED CAPACITY PLANNING DETAILED MATERIAL PLANNING Hierarchy of Capacity Planning MATERIAL AND CAPACITYPLANS ORDER RELEASE PURCHASING PRODUCTION ACTIVITY CONTROL (PAC) SHOP FLOOR SCHEDULING AND CONTROL (SFC) VENDOR SCHEDULING AND FOLLOW-UP SYSTEMS

15. RAW MATL CUSTOMER LOGISTICS STORAGE STORAGE TRANSPORTATION TRANSPORTATION TRANSPORTATION PROCESSING CUSTOMER INTRODUCTION TO BUSINESS LOGISTICS (LMGT 1319) WAREHOUSING & DISTRIBUTION CTR MANAGEMENT (LMGT 1325) INTRODUCTION TO MATERIALS MANAGEMENT (LMGT 1321) PRODUCTION & OPERATIONS MANAGEMENT (LMGT 1331) MATERIALS REQUIREMENTS PLANNING (LMGT 1349)

16. SS = Ls2D + D2s2L high ROP = ROP = DL + Ls2D DL + Ls2D + D2s2L Demand Variability ROP = ROP = DL DL + D2s2L 0 Lead Time Variability low high

17. QUALITY • CUSTOMERS • RATE • SUPPLIERS • IN THREE • MAJOR • CATEGORIES • QUALITY • COST • TIME COST TIME

18. QUALITY 10 9 0 0 3 COST TIME 6 10 10 • LEGS ARE GRADUATED ON A SCALE OF 0-10 • CUSTOMERS RATE SUPPLIERS • BASED ON BUSINESS RELATED QUESTIONAIRE • (SURVEY)

19. QUALITY 10 0 COST TIME 10 10 THE GOAL 10s IN ALL CATEGORIES

20. Q - C Q - T C - Q C - T T - Q T - C THIS IS CALLED THE BUSINESS TRIAD QUALITY COST TIME QUALITY-COST-TIME ARE INVARIABLY TIED TOGETHER IN PRODUCTION