Chapter 1.

Manufacturing
Planning and Control

0. The Context for MPC

A. Globalization/Internationalization
Even small firms have customers around the world,
and many have foreign sources of supply as well, n
ot to mention large firms such as Dell, Solectron, W
al-Mart, etc.

B. The Role of the Customer from mass productio

n to mass customization
The need for product and process flexibility (and MP
C flexibility) to meet the relentless push for product
differentiation, faster response, lower inventory and
transaction costs.

0. The Context for MPC

C. The Impact of Information Technology
ERP systems provide the means for linking function
ally disparate, geographically dispersed, and cultura
lly different organizational units into a coherent syst
em.

Lean production
Lean organization
Lean enterprise
Lean supply chains

1. MPC System Defined

MPC system concerns planning and controlling the
manufacturing process (including materials, m
achines, people, and suppliers). Tasks to perfo
rm:

Plan capacity requirements and availability

Plan for materials to arrive on time, right quantity
Ensure utilization of capital equipment
Maintain appropriate inventory
Schedule production activities

Cost and benefits: like all investments, costs could be

high and payoffs could be quite handsome as well.

2. An MPC System Framework

A 3-phase model: Fig. 1.1
The need to match MPC with firms layout/ environm
ents:

Job shop
Cellular manufacturing
Flexible manufacturing systems
Assembly line
Just in time

Sales and operations

planning
Master production
scheduling

Detailed capacity
planning

Demand
management

Front End

Detailed material
planning
Engine
Material and
capacity plans

Shop-floor
systems

Supplier
systems

Back End

Manufacturing Planning and Control System

Enterprise Resource Planning (ERP) System

Resource
planning

Back End

MPC execution systems

Systems for detailed material
and capacity planning
Activities and systems for
overall direction setting

Engine

Front End

An MPC System Framework

Choosing a layout type

Layout selection = f (positioning strategy)
Process (functional) layout
Product (line/flow) layout
Hybrid (combination) layout (e.g., one work mu
ltiple machines (OWMM), group technology/cel
lular manufacturing (GT/CM), flexible manufact
uring systems (FMS)
Fixed-position layout

Number of subparts

MPC Classification Schema (Fig.1.2)

Project
MRP
Just-in-time
Repetitive
Flow
Seconds

Minutes

Days

Weeks

Time between successive units

Months

MPC Classification Schema

Flow (continuous productionchemical plants,
food, etc.)
Repetitive (longer production cyclesautomob
iles)
Just-in-Time (shorter production cyclesTVs,
personal computers)
MRP (management of complicated parts prod
uctairplanes)
Project (unique, long durationships).

MPC Classification Schema

What are the two factors in the classification?
Product complexity: number of subparts
Process complexity: nature of repetitiveness
(time between successive units)
All MPC systems are not the same. What affects
the complexity/design of an MPC?
Product and process complexity. e.g., in flow type of
production, materials management is simple.

3. Evolution of MPC Systems

Evolution of competitive priority/strategy:
cost, quality, time, flexibility
The MPC system must adapt to meet cha
nging company needs
Periodic MPC system audits compare syst
em responses to the requirements of the
marketplace

Concluding Principles
The framework for the MPC is general, and all 3 phases mu
st be performed, but specific applications must reflect partic
ular firm conditions and objectives.
In supply chain environments, the MPC must coordinate the
planning and control efforts.
MPC systems should support the strategy and tactics pursu
ed by the company.
Different manufacturing processes dictate the need for differ
ent MPC designs.

Concluding Principles
The MPC should evolve to meet changing requirements in t
he market, technology, products, and processes.
The MPC should be comprehensive in supporting the mana
gement of all manufacturing resources.
An effective MPC can contribute to competitive performance
by lowering costs and providing greater responsiveness to t
he market.
In firms that have an integrated ERP system and database, t
he MPC system should integrate with and support cross-fun
ctional planning through the ERP system.

Quiz Chapter 1
In the MPC process, capacity decisions (equipment, facili
ties, suppliers, etc.) are most likely to occur in what time
horizon?
In the MPC process, detailed scheduling decisions are m
ost likely to occur in what time horizon?
Master Production Scheduling (MPS) and Resource Plan
ning are a part of which MPC phase?
Measurement and Control are a part of which MPC phas
e?
Products that are part of a one-time production process
(e.g. bridges or aircraft carriers) would most likely use wh
ich form of MPC?