Manufacturing Management

The Environment:

Types of Companies:

• Basic producer (Manufacturer)
• Converter (Process)
• Fabricator

Methods of Production:

• Job Shop (Project based)
• Assembly Line
• Batch production
• Mass production (Continuous Production)
• Combination of above

Types of planning:

• Buy from outside
• Make within the company
• Make to stock (Manufacture in advance to compensate demand)
• Make to order (Manufacture as and when order comes)
• Make to assemble (Manufacture spares for assembly)
• Assemble to order (Assemble as and when order comes)

Concerns of Manufacturing Organization:

Costly Business:

• Material Cost- Investment in inventory
• Direct Material Cost
• Indirect Material Cost
• Cost of Machines – Machine Utilization
• Manpower cost – Operator efficiency
• Direct labor cost
• Indirect labor cost

A complex & Changing Product:

• Product enhancement – New technology, new material
• Engineering change control

A Competitive Business:

• Customer expects quality product at reasonable cost
• Less time to market
• Changing pattern of demand
• Less time for delivery

A changing environment:

• Pains of growth or recession
• Complexity in planning and scheduling of resources

Decentralized Production Planning:

• Problem in reconciling the requirement of sales
• Production and the financial interests.

An Information Explosion:

• Gathering and dissemination of information I the most difficult problem as information is voluminous, scattered & difficult to obtain.

Functions of manufacturing Management:

• Preparation of Master Production Plan
• Preparation of Master Production Schedule (MPS)
• Capacity Requirement Planning (CRP)
• Material Requirement Planning (MRP)
• Production Planning
• Shop Floor Control

Master Production Plan:

Objective:

• To achieve the budgeted turnover
• Optimum utilization of resources
• Smooth production process

Product-wise requirement during various periods

• Long range plan
• Short range plan

Inputs for Preparing Master Production Plan

• Order booking
• Demand forecast (Products, spares, etc.)

Demand Forecast

• Factors influencing demand forecast:
• Life cycle of product
• Product phase
• Number f products
• Forecast can be based on:
• Past data patters (future projection)
• Economic trends
• Competition
• Market trend

Master Production Schedule:

Objective:

• To provide feasible master schedule for production
• To provide basis for decision-making regarding
• Specific production dates
• Available capacity
• Total demand
• Lead time
• Inventory constraints
• The MPS is stated in terms of specific products that are to be produced in certain quantities by certain dates
• MPS specifies:
• Sizing and timing of production order for specific items
• The sequencing of individual jobs
• Allocation of resources to individual activities & operation.

Capacity Resource Planning (CRP):

Objective:

• To determine long-term & short term capacity needs.
• To mach the resources to demand
• To determine the acquisition of required resources

Long term capacity strategies:

• Following changes will revise he demand resource requirements:
• Development of new product lines
• Expansion of existing facilities
• Construction or phasing out of production plant
• Acquiring of resources
• Make or buy decision

Short term capacity strategies:

• Capacity planning for the short period to take care of fluctuation in demand during short term due to
• Seasonal factor
• Economic factor
• Following strategies can be used to cope up with fluctuation in demand
• Extra shift working, overtime
• Sub-contracting
• Hiring or firing of people
• Purchasing instead of manufacturing

Capacity planning:

• Capacity is the rate of output that can be expected from a given entity. It is the highest sustainable rate of output which can be achieved with current production mix, worker effort, plan and equipments (hrs, qty, etc…)
• Load is the total quantity or volume required to be processed through a given entity.
• Capacity management is the planning and control function which is link between the production plan and manufacturing resources.
• Rough-cut Capacity planning is the process of converting the production plan and/or the MPS into capacity need for the key resources.

Advantage of Capacity planning (CRP):

• Helps to simulate proposed production plan
• Helps to rescheduling the production plan to balance workload
• Identifies end-item to be rescheduled
• Identify rescheduled effects on all work-centers
• Reduces idle time and queue time.
• Reduce work-in-process (WIP) inventory
• More efficient use of machines and people

Material Requirement Planning (MRP)

MRP is a planning tool designed to provide visibility into the future to predict potential challenges. MRP is the best re-planning tool available because through the use of the speed of computer, it can re-plan and adjust priorities based on changes in the original plan.

Objective

• Inventory reduction
• No excess inventory
• No mismatch inventory
• No non-moving or dead stock
• To ensure availability of required material
• In right quantities
• At right time
• At right place
• To enhance customer satisfaction by realistic commitment
• To increase production efficiency
• Reduction in idle time, queue time
• Increase production capacity by better co-ordination among work-centers
• To help in providing faster response to changing condition
• Material shortages
• Machine breakdowns
• By forward planning, help supplier to reduce lead time and minimize production and inventory carrying cost.
• To help arrive at accurate cost of production.

MRP process:

• It relates the dependent requirements for the material and components comprising in end product to time periods know as “buckets” over a planned horizon on the basis of Master production Schedule (MPS)
• It is used to determine how much of each material needs to be purchase or item to be manufactured in the planning horizon to ensure that orders are fulfilled on time
• To accomplish this task MRP uses:
• Master production Schedule (MPS)
• Bill of material (BOM)
• On-hand quantity (Available stock)

· MRP provides requirement oriented operations for manufacturing parts and/or assemblies for the final product, which are very important to manufacturing firms.

Steps involved in MRP:

• Compute Gross requirement of dependent items based on MPS
• Add requirement of independent items to gross requirement (e.g. requirement of spare parts)
• Compute Net requirement of items by netting the gross requirement with that of Lead time
• Determine the Production lot
• Offset the production lots for lead time
• Separate out requirements of Purchased items and Manufactured item
• To calculate Cumulative Net Requirement use BOM
• Define product / Assembly / Component structure
• Parent-Child relationship
• Quantity of Child required per Parent
• Also define stage in assembly where the item is required.
• Creation of BOM
• New
• From Existing structure
• Explosion or Implosion of BOM

Production Planning:

• Production planning is the pre-determination of manufacturing resources such as material, machine, manpower, minutes & money for the production of good of the right quality, in right quantity and at the right time.
• It is the determination, acquisition and arrangement of all facilities necessary for future production of items.

Functions of Production Planning:

• Shop scheduling (Machine loading chart)
• Material Control (Material Requisition Note)
• Process Planning & Routing (Route Card, Process Sheet)
• Follow up of WIP

Shop Floor Control:

Objective:

• To control day-to-day production activity to achieve production targets.
• Work measurement (Efficiency & Productivity)
• Reduce Work-in-Process
• Improve utilization of production resources
• Collect cost, quality and maintenance related data.

Functions:

Work Order Management:

• Release of Work Order or Mfg, order
• Work order
• Material requisition note
• Route card
• Time ticket
• Move ticket
• Inspection order
• Process sheet
• To get required material & tools issued from stores
• To move material between two work-centers
• Stage inspection
• Prepare Material Rejection Note for rejected material
• Prepare Material Delivery Note for finished material

Work-in –Process Management:

• Tracking of W/O based in routing information
• Work Measurement
• With respect to labor efficiency
• With respect to productivity
• Yield reporting
• Rejection control
• Monitoring of returns from shop

Information Reports:

• Shift-wise labor efficiency
• Shift-wise production completion details
• List of completed Work Orders during the period
• List of pending Work Orders as on date
• Work order wise
• Finished item-wise
• Machine utilization for the period
• Down time analysis
• Analysis of rejections
• Due to process
• Due to operator
• Report of scrap generated
• Material Consumption analysis