ERP AND APPLICATION Lesson 3 By David Pun

TIME FENCES Planning time face Demand time face Planning Forecasting CPO Unrestricted (c) copyright 2005 Firm planned time face Production Preparation FPO Flexible By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK RO Order delivery Frozen 2

ORDERS • Computer Planned Orders (CPO) –suggested work orders – Created by the computer – Serve as a suggestion to the person who scheduling that a firm planned order on the material and/or production requirements – May be changed or deleted by the computer during subsequent MPS processing – Generate lower-level requirements via the BOM explosion process (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 3

ORDERS • Firm Planned Orders (FTO) – Master scheduler take control of the order – The order could not be changed on subsequent MPS processing – The order could only by changed by the scheduler – Can by used to override the normal lead time and requirements, this is a one time deviations from the standard without affect the master data (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 4

ORDERS • Firm Plan Order (FPO) – Although, computer logic cannot automatically change FPOs, the standard time-phased logic of master production scheduling and material requirements planning that calculates the projected available balance critiques the schedule of FPOs (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 5

ORDERS • Released Orders (ROs) – Work orders, purchase orders, etc (c) copyright 2005

TIME FENCES • Unrestricted – Future planning • Planned orders can be changed by the system logic itself • Computer is allowed to schedule, reschedule, or cancel orders as per the changes of the requirements (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 7

TIME FENCES • Flexible – Material Ordered Capacity in Place • Total demand is a combination of actual orders and forecasts • Change to schedule may adversely affect component schedules, capacity plans, customer deliveries, and cost • Master scheduler may change the MPS manually within the limits of established rescheduling rules (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 8

TIME FENCES • Frozen – Stabilize • Forecast is not included in total demand projected available inventory calculations • Change to MPS must be approved by an authority higher than master scheduler • Customer orders may be promised without the higher authority approval if there are quantities available to promise (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 9

MASTER PRODUCTION SCHEDULING • An anticipated build schedule for manufacturing end items or product options by quantity per planning period (the time buckets) • Listings of – Products and sub-assemblies – Quantity of individual item to be produced – When the items are ready for shipment (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 10

OBJECTIVES OF MASTER SCHEDULING • Develop data to drive detailed planning • Reconciles customer’s desires with plant, material, and vendor capabilities • Provide delivery schedule and evaluate the effects of changes (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 11

OBJECTIVES OF MASTER SCHEDULING • Coordinate plans and actions of all organization functions and to measure their performance • Authorize and control all resources • Schedule production and purchase orders (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 12

FUNCTIONS OF MPS • Short horizon – Bases for planning material requirements, production of components, order priorities, and short-term capacity requirements • RCCP check • Production smoothing • Netting – net requirements • Lot-sizing (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 13

FUNCTIONS OF MPS • Long horizon – Bases for estimating long-term demands on company resources • Plant • Equipment • Human resources • Warehousing • Capital (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 14

FREQUENCY OF MPS • Geared to the forecast cycle • Usually weekly (c) copyright

INPUTS TO MPS • • • Production plan Demand data Inventory status Planning data

PROJECTED AVAILABLE BALANCE (PAB) • Predicts what will be in inventory at a specific point of time PAB = On-hand balance + MPS – Customer orders (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 17

AVAILABLE TO PROMISE • Shows where new customer orders can be promised for delivery

ROLE OF THE MASTER SCHEDULER • Compare actual and forecasted demand suggest revisions to forecast and MPS • Covert forecasts and order-entry data into MPS • Correlate MPS with shipping and inventory budgets (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 19

ROLE OF THE MASTER SCHEDULER • Maintain MPS data files • Participate in MPS meetings, prepare agendas, anticipate problems, providing data for possible solutions, and bringing conflicts to the surface • Evaluate the impact of top-down inputs (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 20

ROLE OF THE MASTER SCHEDULER • Revise MPS when necessary • Develop and monitor

CHARACTERISTICS OF MASTER SCHEDULER • Experienced in production and inventory management • Good communicator • Good with numbers • Cool under pressure (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 22

CHARACTERISTICS OF MASTER SCHEDULER • Disciplined in maintaining data accuracy • Assertive to make things happen • Proactive and foresighted rather than firefighting • Flexible in approach (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 23

SYMPTOMS OF A MISMANAGED MPS • Overloaded or extensively front-loaded • Excessively short lead-times and frequent need for expediting • Excessive past due orders • Poor on-time delivery • Increased (mainly WIP) inventory (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 24

MEASUREMENT OF MPS • Validity • On-time deliveries • Hot lists versus schedule (c)

PERFORMANCE INDICATORS OF MPS • Capacity utilization rate • Accuracy and effectiveness of supplier communication • Inventory turnover ratio • Delivery performance (on-time percentages) (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 26

PERFORMANCE INDICATORS OF MPS • Deviations of actual production from the MPS • Conformance to the productions plan • Frequency of need for expediting (unplanned activities) (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 27

MRP Logic • Uses backward infinite scheduling to explode demands for making items through the bills and generate production schedule – Infinite resource capacity • Manufacturing order has a fixed lead time regardless of lost size, current production loads and available resource capacity – No material constraints (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 28

ADVANCE PLANNING SCHEDULER • Uses finite scheduling based on capacity and material constraints to synchronize activities in the supply chain – Comprehensive models of available resource capacity – Detailed routing information – Finite scheduling rules (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 29

ADVANCE PLANNING SCHEDULER • Schedules the start of an operation when all required materials and resources are available • Might generate schedules that do not meet due dates • High degree of complexity (c) copyright 2005 By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK 30

INFINITE AND FINITE CAPACITY Infinite capacity Over capacity Average capacity of work centre Delivery date S M T W T F S S Finite capacity Average capacity of work centre Delivery date S (c) copyright 2005 M T W T F S S By David Pun, MPA, MEC, MBA, BSc, ACEA, ATIHK Delay！ M 31