Transcript Planning, Forecasting, and Scheduling

Forecasting, Planning and Scheduling
http://www.managementsupport.com
1
Outline




Forecasting
Planning
Scheduling
MRP & ERP
2
Strategy and Issues During a Product’s
Life
Introduction
Company Strategy/Issues
Best period to
increase market
share
R&D product
engineering critical
Growth
Maturity
Practical to change
price or quality image
Poor time to change image,
price, or quality
Competitive costs become
critical
Strengthen niche
Fax machines
CD-ROM
Color copiers
Cost control
critical
Defend market position
Drive-thru restaurants
Sales
Decline
3 1/2”
Floppy
disks
Station
wagons
Internet
HDTV
OM Strategy/Issues
Product design and
development critical
Frequent product and process
design changes
Short production runs
High production costs
Forecasting critical
Standardization
Product and process
reliability
Less rapid product
changes - more minor
changes
Competitive product
improvements and options
Increase capacity
Limited models
Shift toward product
focused
Attention to quality
Enhance distribution
Optimum capacity
Increasing stability of
process
Long production runs
Product improvement and
cost cutting
Little product
differentiation
Cost minimization
Over capacity in the
industry
Prune line to eliminate
items not returning good
margin
Reduce capacity
3
Forecasting Approaches
Qualitative Methods


Used when situation is vague
& little data exist
 New products
 New technology
Involves intuition, experience
 e.g., forecasting sales on
Internet
Quantitative Methods


Used when situation is
‘stable’ & historical data exist
 Existing products
 Current technology
Involves mathematical
techniques
 e.g., forecasting sales of
color televisions
4
Overview of Qualitative Methods

Jury of executive opinion


Delphi method


Panel of experts, queried iteratively
Sales force composite


Pool opinions of high-level executives, sometimes augment
by statistical models
Estimates from individual salespersons are reviewed for
reasonableness, then aggregated
Consumer Market Survey

Ask the customer
5
Relationships of the Aggregate Plan
Marketplace
and Demand
Demand
Forecasts,
orders
Product
Decisions
Process
Planning & Capacity
Decisions
Aggregate
Plan for
Production
Master
Production
Schedule, and MRP systems
Research and
Technology
Work Force
Raw Materials
Available
Inventory On
Hand
External
Capacity
Subcontractors
Detailed Work
Schedules
6
Choosing a Scheduling Method


Qualitative factors
 Number and variety of jobs
 Complexity of jobs
 Nature of operations
Quantitative criteria
 Average completion time
 Utilization (% of time facility is used)
 WIP inventory (average # jobs in system)
 Customer waiting time (average lateness)
7
Priority Rules for Dispatching Jobs
FCFS
First come, first served
The first job to arrive at a work center is processed first
EDD
SPT
LPT
CR
Earliest due date
The job with the earliest due date is processed first
Shortest processing time
The job with the shortest processing time is processed first
Longest processing time
The job with the longest processing time is processed first
Critical ratio
The ratio of time remaining to required work time remaining is
calculated, and jobs are scheduled in order of increasing ratio.
8
Inputs to the
Production Plan
Marketing
Customer
Demand
Production
Capacity
Inventory
Procurement
Supplier
Performance
Finance
Cash Flow
Aggregate
Production Plan
Management
Return on
Investment
Capital
Human
Resources
Manpower
Planning
Engineering
Design
Completion
9
MRP Benefits





Increased customer satisfaction due to meeting delivery
schedules
Faster response to market changes
Improved labor & equipment utilization
Better inventory planning & scheduling
Reduced inventory levels without reduced customer service
10
Distribution Resource Planning

DRP requires:
 Gross requirements, which are the same as expected
demand or sales forecasts
 Minimum levels of inventory to meet customer
service levels
 Accurate lead times
 Definition of the distribution structure
11