Advanced

Production Planning and Control

Course Plan (Rencana Pembelajaran)

Dr Niniet Indah Arvitrida

[email protected]

Department of Industrial and Systems Engineering

Institut Teknologi Sepuluh Nopember (ITS)

Instructors

 Prof Iwan Vanany

 Dr. Niniet Indah Arvitrida

2
 Course Description

Advanced Production Planning and Inventory Control

is an advanced course for master study level.
The course requires student not only applying but also designing
some models related to optimize the use of production resources
in order to satisfy customers’ demand.
The objective of this course is to give some advanced knowledge
and insights in PPIC to graduate students various concepts,
techniques, methods, and practical issues.
Students are also introduced to analyze and solve
comprehensive case studies in PPIC and its relations with the
supply chain

Course Learning Outcomes

Code Course Learning Outcomes
CLO1 Students are able to explain the roles of production planning and
inventory control among other functions in a manufacturing company
CLO2 Students are able to explain the framework of production planning and
inventory control from demand forecasting to production activity control
CLO3 Students are able to apply basic forecasting methods and measure
their accuracy
CLO4 Students are able to use methods / techniques to develop a set of
production plan comprehensively including aggregate production planning
(sales & operations planning), master production scheduling and material
requirement planning. Students also required to understand capacity planning
methods in different levels of decision.
CLO5 Students are able to use various techniques to control and manage
inventory
CLO6 Students are able to use techniques to control production activities
CLO7 Students are able to explain practical issues related to PPIC and its
relations with the supply chain
CLO8 Students are able to analyze and solve comprehensive case studies in
PPIC and its relations with the supply chain
4

4
 Overview of the scope

 Production Planning and Control deals with the whole

process of planning and controlling in a manufacturing
system in order to meet demand with the available
resources.
 There are a number of activities involved, including
 managing the flow of inbound materials,
 managing work in process,
 scheduling machines and workforce,
 prioritising orders,
 making capacity decisions, and
 coordinating demand from the customers.
 The objective of this course is to provide students with
concepts of planning and control aspects of
manufacturing systems
5

Schedule
Week Topic
1 Introduction: Production Systems and Inventory Management
2 Demand Forecasting (1)
3 Demand Forecasting (2)
4 Aggregate Production Planning (Sales and Operations Planning)
5 Master Production Scheduling
6 Material Requirements Planning: Concepts
Material Requirements Planning: Lot-sizing techniques (including
7
advanced models)
8 Mid-Exam (EBTS)
9 Capacity Planning: Resource Planning and Rough Cut Capacity Planning
10 Capacity Planning: Capacity Requirement Planning
11 Inventory Control and Management : Economic Order Quantity model
Inventory Control and Management : Models for known demand
12
(including advanced models)
Inventory Control and Management : Models for uncertain demand
13
(including advanced models)
14 Production Activity Control
15 CPIM certification-like Exam or Guest Lecturing or Case Study Discussion
16 Final Exam (EBAS)

6
 Evaluation
 NIA – 50%
 IV – 50%

Bookshelf
 Jacobs, F. R., Berry, W. L., Whybark, D. C., & Vollmann, T. E. (2011). Manufacturing
planning and control for supply chain management: McGraw-Hill.
 Arnold, J. T. (2011). Introduction to Materials Management, 5/e. Pearson Education
India.
 Nahmias, S., & Olsen, T. L. (2015). Production and operations analysis: Waveland
Press.
 Waters, D (2008), Inventory control and management, John Wiley & Sons
 Fogarty, D. W., Blackstone, J. H., and Hoffmann, T. R. (1991). Production and Inventory
Management 2nd Ed., South Western Publishing.
 Smith, S. B. (1994). Computer based production and inventory control: Prentice Hall
PTR.
 Chopra, S., Meindl, P., (2009) Supply chain Management: Strategy, Planning, and
Operation, New Jersey; Pearson Prentice Hall.
 Sipper, D., & Bulfin, R. L. (1997). Production: planning, control, and integration:
McGraw-Hill Science, Engineering & Mathematics.

8

8
 Please Note

 Lecturers’ slides are NOT designed as the main

reference.
 The information shown is incomplete and not peer-reviewed
 The slides are developed to help students to have a shortcut in
understanding the topic that is being discussed.

 For a complete learning, students MUST refer to the

textbooks that are used during the course.

10

10
 Production Planning and Control

Course # 1
Introduction

Dr Niniet Indah Arvitrida

Department of Industrial Engineering

Institut Teknologi Sepuluh Nopember (ITS)

11

Motivation

More
competitive
environment
Flexibility Speed

Innovation Efficiency

Company reputation (image) Adaptive

Agile
Lean
Sustainable Green
12

12
 Production and Operations Management

To create goods and services, all organizations perform three functions:

 Marketing  Which generates demand

 Production/operations  which creates the product
 Finance/accounting  which tracks how well the organization is
doing, pays the bills, and collect the money

Operations is one of the three functions that every organization performs.

13

13

MPC / PPC
(Manufacturing Planning and Control / Production
Planning and Control)

 The development of an effective MPC/PPC is the

basic key to achieve success for any manufacturing
company.
 MPC /PPC system needs to continuously adapt
and respond to changes in the company
environment, strategy, customer requirements,
particular problems, and new supply chain opportunities.

14

14
 The Evolution of Process Capabilities

 Volume (1920/30/40’s)

 Cost (1950/60’s)

 Quality (1970/80’s)

 Time (1980/1990’s)

 Flexibility (1990/2000’s)

 Mass customization (2000’s & beyond)

15

15

Production/Manufacturing

Production/manufacturing is the process of converting

raw materials or semi-finished products into finished
products that have value in the market place. This
process involves the contribution of labor, equipment,
energy, and information.

16

16
 The Production System

Raw materials
Energy Finished products
Production
Labor Scrap
Equipment
System
Waste
Information

17

17

Inventory

Inventory is both an input and output of the production

process. Inventory can be in the form of raw materials,
semi-finished, and finished products.

18

18
 The Inventory System

Supply Demand source

source

Inventory

19

19

The Production-Inventory System

Distribution
Suppliers and sales
Fabrication Assembly

Raw materials Component parts Finished goods

inventory inventory

20

20
 The Supply Chain

Assembly/
Manufacturing

1st tier Distribution

2nd tier suppliers suppliers centers
Retailers

21

21

The purpose of PPC

Production planning and control co-ordinates supply

and movement of materials and labor, ensures
economic and balanced utilization of machines
and equipment as well as other activities related with
production to achieve the desired manufacturing results
in terms of quantity, quality, time and place.

Production planning and inventory control is the subset of SCM

functions that focus on managing production operations and inventory
throughout the supply chain.

22

22
 There are three stages in PPC

 Planning : The choice from several alternatives of the

best utilizing the available resources to achieve the
desired objective .
 Operations: Performance in accordance with details set
out in production plan.
 Control: The monitoring of performance through a feed
back by comparing the results achieved with planned
targets so that performance can be improved. .

23

23

Examples of Decisions

24

24
 Examples of Decisions

 What should we produce, how much, and when

(forecasting)?
 How much can we produce (capacity planning)?
 How much do we have and how much do we
need (inventory management)?
 When should we produce (production planning
and scheduling)?

25

25

Example Performance Measures

26

26
 Examples of Performance Measures

 Cost (are products being created at minimum or

acceptable cost?)
 Quality (what are the specifications of the
products? What percentages of shipped products
meet specification?)
 Variety (how many types of products are - or
can be – simultaneously produced?)
 Service (how long does it take to fulfill a
customer order? how often are quoted lead times
met?) 27
27

27

Examples of Performance Measures

(continued…)

 Flexibility (how quickly can existing resources

be reconfigured to produce new products?)
 Worker satisfaction (are workers and managers
throughout the supply chain happy and
motivated?)
 Safety (are work environments safe for workers
and the surrounding community?)
 Environmental impact (how environmentally
friendly are the supply chain processes and the
products?) 28
28

28
 The scope

Resource Sales and operations Demand

Planning planning management

Master production
scheduling Front End

Detailed capacity Detailed material

planning planning
Engine
Material and
capacity plans

Shop-floor Supplier Back end

systems systems

29

29

Resource Sales and operations Demand

Planning planning management

Master production
scheduling Front End

Front End
Detailed capacity Detailed material
planning Set of activities
planningand systems for overall
direction setting (Demand Management,
Engine
Sales & Operations
Material andPlanning, Resource
Planning and MPS)
capacity plans

Shop-floor Supplier Back end

systems systems

30

30
 Resource Sales and operations Demand
Planning planning management
Engine

Enterprise Resource Planning (ERP) System

Systems
Masterfor detail material and
production
capacity planning.
scheduling Front End

Detailed capacity Detailed material

planning planning
Engine

Material and
capacity plans

Shop-floor Supplier Back end

systems systems

31

31

Resource Sales and operations Demand

Planning planning management
Enterprise Resource Planning (ERP) System

Master production
scheduling Front End

Back End
Detailed capacity Detailed material
MPC
planning execution systems
planning – Track
Engine
progress and collect data.
Material and
capacity plans

Shop-floor Supplier Back end

systems systems

32

32