PRODUCTION PLANNING HIERARCHY

Assistant Professor Dr. Mahmoud Abbas Mahmoud

Industrial Engineering Branch
Department of Production Engineering and Metallurgy
University of Technology
Baghdad - Iraq
dr.mahmoudalnaimi@uotechnology.edu.iq
dr.mahmoudalnaimi@yahoo.com

2015 - 2016

Production Planning and Control

Dr. Mahmoud Abbas Mahmoud

2015 - 2016

4- PRODUCTION PLANNING HIERARCHY

Typically, the manufacturing organizations have three categories of
managerial planning activities whose names "strategic", "tactical", and
"operational" production planning. Strategic planning is clearly of "longrange" scope planning decisions. It is a responsibility of top management
so it is called "business planning". Tactical

planning is a "medium-

range" activity involving middle managements. Finally operational

planning, which involves "short-range" actions, and it is normally
executed by lower levels of management (factory operations managers).
Long-range (business plans) are necessary to develop facilities and
equipment, major suppliers, and production processes and become
constraints on the medium-range plan. Medium-range is "aggregate
plans" concerning with employment, aggregate inventory, utilities,
facility modifications, and material-supply contracts. These aggregate
plans impose constraints on the short-range production plans that follow.
So short-range is "Master Production Schedules" (MPS) for producing
finished goods or end items, which are used to derive production planning
and control systems. These systems develop short-range production
schedules of parts and assemblies, schedules of purchased materials,
shop-floor schedules, and workforce schedules. Figure (1) gives an
illustration of the planning activities.

Production Planning and Control

Dr. Mahmoud Abbas Mahmoud

Planning Horizon

2015 - 2016

Description

Long-Range

Business Planning

(1-5 Years Horizon)

Medium-Range
(3-12 Months Horizon)

Aggregate
Production
Planning

Top management make long-range plans

for (1)facilitates- plant locations, layouts,
size, and capacities; (2) major supplier
plans and
amount
of
vertical
integrations; (3) processing plans- new
production technology, new production
processes, new system of automations.

Middle management make plans for (1)

employmentlayoffs, hiring, recalls,
vacations,
overtime,
part-time
employees; (2) inventories; (3) utilities;
(4) facility modifications; (5) materialsupply contractors.

Phase I

Master Production
Scheduling
Short-Range
(1-90 Days Horizon)
Phase II

Production
Planning and
Control Systems

Factory operations managers make

plans for (1) production schedules of
parts and assemblies to be
manufactured; (2) schedules of
purchased materials; (3) shop floor
schedulesmachine
changeovers,
batch movements; (4) workforce

Figure (1) Production Planning Hierarchy

2