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Perhaps the most important aspect of the context for development and maintenance of a manufacturing planning and control system is the continual change in its competitive environment. Changes range from technological to political and strategic. Three key areas of influence on MPC system design are the degree of internationalization, the role of the customer in the system, and the increasing use of information technology.
Manufacturing Planning And Control Systems Vollmann.pdf
The increase in breadth and depth of internationalization of manufacturing continues apace. Growth in international markets, both demand and supply, has had a major impact on MPC system design and execution. Even small firms have customers around the world, and many have foreign sources of supply as well. The reach of national markets through trade blocs like NAFTA, the European Common Market, the Andean Market, and others will continue to expand. These markets expand the sources of demand and locations of suppliers for firms of all sizes. It is a competitive imperative to adapt MPC systems to this wide environment.
Internationalization has given rise to a whole new form of company. An expression from the 1980s, hollow corporation, has taken on a new meaning. The original concept had to do with a firm that had very little manufacturing and focused primarily on product design and marketing. But companies like Nike have taken this concept to a new level. Whole networks of manufacturing firms around the world have grown up to support the likes of such companies as Nike. The MPC systems necessary to support these supply chain networks are much more complex than those of the traditional manufacturing company.
These shifting requirements in international collaborations have given new meaning to the expression supply chains (sometimes called demand or value chains) or supply networks. As opportunities arise and conditions change, the members of a particular supply network will change with unpredictable timings. There are occasions when a firm will be both a supplier and a customer to the same firm, while supplying their competitors and their customers. These shifting networks have given rise to a very special need to have material planning and control systems that are transportable, international, transparent, and effective.
One response to the global need for coordination and communication has been the rapid deployment of information technology, particularly enterprise resource planning (ERP) systems. Recognizing the need for common definitions of data, compatible procedures for handling information, effective communications within and between firms, and a common means for accomplishing tasks, ERP systems have come to the forefront. These gigantic information systems built over a common database have provided the means for linking functionally disparate, geographically dispersed, and culturally different organizational units into a uniform system. The hope and promise of ERP systems is to provide common data, common procedures, and real-time data availability for coordinated decision making in globally dispersed organizations.
ERP systems need to be seen in the context of greater internationalization and more global optimization. Originally, MPC systems were designed to support individual factory operations. ERP allowed firms to move beyond the concept of lean manufacturing with its factory focus to lean organization with a business unit focus. Here, integration encompasses several factories as well as functions such as accounting, human resources, and sales. The new frontier is to move toward lean enterprise where integration is achieved across business units. This is particularly valuable when cumulative purchasing volumes are large or when responding to global customers such as Wal-Mart and Carrefour. But lean enterprise is not the end of the road. Lean supply chains focus on optimizing activities across company boundaries.
Figure 1.1 is a schematic of the general MPC system that would be used within a firm for planning and controlling its manufacturing operations. But linking customer and supplier firms in a supply chain requires coordinating the MPC activities between the firms. The model shown in Figure 1.1 is essentially what one will find as a key part of any packaged ERP system. The figure is divided into three parts or phases. The top third, or front end, is the set of activities and systems for overall direction setting. This phase establishes the overall company direction for manufacturing planning and control. Demand management encompasses forecasting customer/end product demand, order entry, order promising, accommodating interplant and intercompany demand, and spare parts requirements. In essence, demand management coordinates all activities of the business that place demands on manufacturing capacity.
Sales and operations planning balances the sales/marketing plans with available production resources. The result is an agreed-on company game plan that determines the manufacturing role in meeting company strategy. Increasingly, this activity is receiving more management attention as the need for coordination is recognized in progressive firms. The master production schedule (MPS) is the disaggregated version of the sales and operations plan. That is, it states which end items or product options manufacturing will build in the future. The MPS must support the sales and operations plan. Resource planning determines the capacity necessary to produce the required products now and in the future. In the long run this means bricks and mortar, while in the short run it means labor and machine hours. Resource planning provides the basis for matching manufacturing plans and capacity.
The middle third, or engine, in Figure 1.1 encompasses the set of MPC systems for detailed material and capacity planning. The master production schedule feeds directly into the detailed material planning module. Firms with a limited product range can specify rates of production for developing these plans. However, for firms producing a wide variety of products with many parts per product, detailed material planning can involve calculating requirements for thousands of parts and components, using a formal logic called material requirements planning (MRP). MRP determines (explodes) the period-by-period (time-phased) plans for all component parts and raw materials required to produce all the products in the MPS. This material plan can thereafter be utilized in the detailed capacity planning systems to compute labor or machine center capacity required to manufacture all the component parts.
In firms using MRP systems, execution of the detailed material and capacity plans involves detailed scheduling of machines and other work centers. This scheduling must reflect such routine events as starting and completing orders for parts and any problem conditions, such as breakdowns or absenteeism. These schedules are often available on a real-time basis from the ERP system database. Real-time data is particularly important in factories with complex manufacturing processes and/or customers demanding responsiveness to volume, design, or delivery schedule changes.
The three-phase framework for manufacturing planning and control is supported by widely available MPC systems and software, from master production scheduling to the back-end systems. This software is not only integrated to follow the framework, it is also linked to other business activities in the ERP systems of many firms. That means that the MPC systems provide inputs to the financial, distribution, marketing, and human resources systems that require the information.
MPC systems must also reflect the physical changes taking place on the factory floor. Outsourcing, contract manufacturing, and the hollowing out of the corporation dramatically affect MPC systems design. Moves from job shops to flow processes to cellular manufacturing approaches affect the MPC systems design as well. Providing information at the level where decisions are made in appropriate time frames has greatly augmented the use of computers on the factory floor and the speed of interaction between planning and execution.
In the middle of the figure we show a large application area for just-in-time systems. Using lean manufacturing approaches, many firms today try to move their processes from right to left in the figure. That is, they try to make processes more repetitive as opposed to unique in order to achieve the operational advantages of repetitive manufacturing (shorter production cycles, reduced lead times, lower inventories, and the like). JIT is shown as spanning a wide variety of products and processes. This MPC approach is increasingly being integrated with more traditional MRP-based systems. The goal is to achieve better MPC system performance and to reduce costs of maintaining the MPC system.
Figure 1.2 also shows material requirements planning as spanning a wide area. MRP is often the platform for ERP applications and is key to any MPC system involving management of a complicated parts situation. The majority of manufacturing firms have this sort of complexity, and MRP-based systems continue to be widely applied. For many firms, successful use of MRP is an important step in evolving their approaches to MPC. Once routine MRP operation is achieved, portions of the product and processes that can be executed with JIT methodologies can be selected. 2ff7e9595c
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