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POM 4530 ........MATERIALS AND PROCESS CONTROL...More

 

 

Ch 1 .....MATERIAL ........MANAGEMENT

Ch 5 CAPACITY ....REQUIREMENTS ....PLANNING.

chap 9 ....INVENTORY .......FUNDAMENTALS

Ch 2..... PRODUCTION ...PLANNING SYSTEMS

Ch 6 CAPACITY ....MANAGEMENT

Order Quantities

Ch 3 ......MASTER ......PRODUCTION ......SCHEDULING

Ch 7 Making The Plan.

CH 11... INDEPENDENT DEMAND ORDERING SYSTEMS.

Ch 4 .....MATERIAL ....REQUIREMENT PLANNING

 

CHAP 14 JUST IN TIME MANUFACTURING

Notes Below in above order.

Calculations used at end.

Chap 1 MATERIALS MGMT.

SUPPLY-PRODUCTION-DISTRIBUTION SYSTEM.

RAW-MFG-DISTRIBUTION. Conflicts in traditional systems include customer service, production costs, inventory costs, and distribution costs.

 

WHAT IS MATERIALS MGMT.

One dept that is responsible for flow of materials thru entire process and co. Maximize firms resources and provide required level of customer service. Cutting cost shows directly on profit statement.

 

MANUFACTURING SYSTEMS.

Flow manufacturing, intermittent and project mfg.

 

Summary:

Mfg creates wealth by adding value to goods.

 

CHAP 2 PRODUCTION PLANNING SYSTEM

good planning system asks. 1. What are we going to make. 2. What does it take to make it. 3. What do we have. 4. What do we need. ~priority and capacity.

 

MFG PLANNING AND CONTROL SYSTEM.

Strategic business plan, production plan, master production plan, material requirement plan, purchasing and production activity control. Each differs in purpose, planning horizon, level of detail, planning cycle. Each needs: priorities of, available capacity, how can differences be resolved ?

 

MFG RESOURCE PLANNING/ MRP II

closed loop mrp, problems at bottom are reflected at top.~ need to be. MRP alone is the material requirement plan.

 

MAKING THE PRODUCTION PLAN.

Based on market plan and available resources, the production plan sets the limits or levels of mfg for some time in the future. Mixes the capacity of factory with market and financial plans to achieve overall business plan. Product groups,basic strategies. Chase (hire/fire), level force, and sub-contracting. Hybrid to. Time horizon= 12 months / updates monthly or quarterly.

First step in mfg. Control and planning.

 

CHAP 3 MASTER PRODUCTION SCHEDULING

forms link with production planning and actually what will be made. Forms basis of capacity and resources needed. Drives the MRP, keeps priorities valid.

 

RELATIONSHIP TO PRODUCTION PLAN.

From family to single items,

 

DEVELOPING A MASTER PRODUCTION SCHEDULE.

Desire to maintain required customer level of service,make best use of resources,maintain required inventories, to do this:

make preliminary MPS, check that against available capacity, and resolve any differences. ROUGH CUT CAPACITY PLANNING comes in here.

 

PRODUCTION PLANNING,MASTER PRODUCTION SCHEDULING, AND SALES.

Production plan matches forecast with firm’s resources. Detail not critical, it is framework. MPS not meant to be rigid. Atp=avail to promise.

 

MPS is the plan for individual items. MPS must not under/over load,schedule correctly, keep inventories low, upkeep customer service, keep faith in planning system

 

CHAP 4 MATERIAL REQUIREMENT PLANNING

system to avoid missing parts. Dependent demand, independent demand.

Objectives of MRP= what to order/how much to order/ when to order/when to schedule delivery. Keep priorities current. MPS drives MRP.

Inputs= MPS / inventory records / bills of material.

 

BILLS OF MATERIAL

recipes, formula's , and part’s list to make product. It shows all needed to make one item. Each part has only one number and unique. Structure= product tree, parent component relationship, multilevel bill, multiple bill, single level bill. Indented bill, summarized parts list,planning bill. Where used and pegging used here. Uses for bills of material= product definition, engineering change control, service parts, planning, order entry, manufacturing, costing most of depts. will use this.

 

MATERIAL REQUIREMENTS PLANNING PROCESS.

planning and control take place for each component. purpose is to determine components needed, quantities needed, and due dates.

Exploding, offsetting, gross and net requirements, releasing orders,low level coding and netting.

low level netting=component might reside on more than one level, must know this and adjust. scheduled receipts=orders placed on mfg. and make a commitment to make or buy. Open orders are scheduled receipts on the MRP record and are the responsibility of purchasing and production activity control. Time buckets, planning horizon, action bucket is now.

 

USING THE MATERIAL REQUIREMENT PLAN

Planners do this act. 1/ Launch orders to purchasing, or mfg.

2/ reschedule due dates of open (existing orders) as required, 3/reconcile errors and find causes. 4/ solve critical material shortages by expediting or replanning. 5/ work with other planners, Master Prod. schedulers, production activity control, and purchasing to resolve problems. Planner works with 3 types of orders:

1/ planned 2/released 3/ firm. Exception orders: MRP notes to planners things that have come up: components which are needed and should be released. Orders which have problem with supplies, lead times which are not sufficient.

Transaction messages are the planners feedback to the MRP system so the system is updated and current.

 

Managing the MRP plan.

Priority/ bottom up planning=if it cannot be done , other adjustments must be made. System nervousness can be controlled by not adjusting to every single little variable.

 

CHAP 5 CAPACITY MGMT.

Capacity is the ability to do work. It is the rate of doing work.

DEFINITION OF CAPACITY.

Available capacity and required capacity. Capacity planning is to figure resources required for the work.

 

 

CHAP 11 INDEPENDENT DEMAND ORDERING SYSTEMS.

Rules for reordering. Order point system,periodic review system, material requirement planning

first two are independent, last one is dependent

 

ORDER POINT SYSTEM.

Order is released, O.P.=DDLT +SS, DDLT is demand during lead time. SS= safety stock.

DETERMINING SAFETY STOCK.

1. Variability of demand during lead time. 2. Frequency of reorder. 3.service level desired. 4. Lead time length. 5. Ability to forecast and,or control lead times. This is where normal distribution comes in with: MAD=mean absolute deviation. Safety stock is also calculated with normal distribution.~safety factor.

 

DETERMINING SERVICE LEVELS.

Back order costs/lost sales/lost customers.

DIFFERENT FORECAST AND LEAD-TIME INTERVALS.

Lead time=0, MAD is 0. Not a direct proportion. It is almost impossible to measure variation around lead times so some method is needed =MAD.

DETERMINING WHEN THE ORDER POINT IS REACHED.

Common is a two bin system, one will not be pulled until other is used up. Another system is a perpetual inventory record system. A continuous account of transactions as they occur. Computer reduce human error here.

Permanent information : part #, storage location, order pt., order quantity, lead time, safety stock, suppliers.

 

Variable information: quantities ordered:dates,order #’s and quantities.

Quantities received: same above.

Quantities issued: same as above.

Balance on hand.

Allocated: dates,order#,quantities.

Available balance.

Information depends on the company and circumstances.

 

PERIODIC REVIEW SYSTEM.

The quantity ordered when the time calls usually could use the EOQ model.

Target level or maximum- level inventory includes the demand during lead time , plus demand during review, plus safety stock.

DISTRIBUTION INVENTORY

all finished goods in all inventories. The objective is to maintain customer service levels while minimizing transportation costs. Unless delivered directly to customer, central supply is the demand on the factory. This distribution system is the factory’s customer.

PULL SYSTEM: Each distribution center orders from central supply, this reduces communication but has problems directly related to that.

 

PUSH SYSTEM: EACH CENTER is dependent on what central supply dictates, control is much better as well as I believe the bottom line.

 

Distribution supply system:

system forecasts when the various demands from centers will be made. The factory can plan for these numbers. Planned order releases from central supply become the forecast of demand for factory Master Production Schedule

 

 

CHAP 14 JUST IN TIME MANUFACTURING

 

JUST IN TIME PHILOSOPHY.

Many definations but most popular is the elimination of waste. Anything else but the minimum of resources needed for operations. No surplus, no safety stock, lead time at the least. If you can’t use it now, don’t make it now.

Adding value is not adding cost. Value starts in the marketplace.

Many things add cost and not---value = counting,storing,moving,shipping,searching and inspection.

 

WASTE

adds value or it is waste./ waste starts with mgmt.policies in response to the marketplace. The greater diversity, the more variables.

Component standardization= do this and still can have variety.

THE IDEAL PRODUCT MEETS THE NEED OF THE CUSTOMER, MAKES THE BEST USE OF MATERIAL, AND BE MANUFACTURED WITH THE LEAST WASTE. THIS IS ALSO THE LEAST COST.

 

Waste caused in manufacturing:

The process: least scrap.

/ methods = activities that do not add value should not be done.

/ movement = this does not add value.~poorly planned layouts.

/ product defects = all entities waste are added as each work station time is wasted.

/ waiting time = two kinds / operator and material. Ideally work would flow w/o wait.

/ overproduction = makes inventory which took resources and continues to use them in storage.

/ inventory = beside storage costs there are added cost in reworking a mistake, finding the cause of the mistake, and not having inventories is saving cost which will give customers a lower cost and more market share to the company.

 

 

JUST IN TIME ENVIRONMENT.

Many elements , not found in all but....

Flow mfg./ process flexibility / total quality mgmt / uninterrupted flow / supplier partnerships / total employee involvement.

 

FLOW MFG.

Repetitive manufacturing = machines close together, in sequence, constant rate, // machine specialization / little buildup of W.I.P., lead times are short, HOWEVER , flexibility is not available ~machines do one thing.

 

PROCESS FLEXIBILITY

Machine should be low cost and have 2 cheap ones instead or 1 expensive one. Flexible also./ quick change over/

1/ reduced EOQ model since set up time on orders are quick.

2/reduced lead time.... this reduces wait and queue times.

3/ reduced WIP inventories....frees up much space and least movement cost.

4/ improved quality...smaller batches give mistakes little time to be buried. Ez to fnd

5/ improved process and material flow. Inventories cause problems in processes since production takes helm.

 

Total quality control

defects are not made in the first place.= less scrap, less rework, less inventory, better on time production,timely deliveries, more happy customers.

Total preventive maintenance./ Uninterrupted flow = uniform plant loading and pull system MOST WELL KNOWN IS THE KAN-BAN PULL. Continuing....

A valid schedule is well planned.

THE COMPANY MAKES SOME OF ALL EVERY DAY = MIXED MODEL SCHEDULING.

 

Linearity= JIT achieving plan and nothing else. Concept of

 

Supplier partnerships:

not all on price but a ongoing relationship.

No need for inbound inspection, orders come in JIT, work with to improve all, SELLER gets : more work, plan more effectively, more competitive.

 

TOTAL EMPLOYEE INVOLEMEMT.

JIT can only be done with all in company. Workers are doing more duties.

 

MANUFACTURING PLANNING AND CONTROL IN A J.I.T. ENVIRONMENT.

 

What are we going to make.

What do we need to make it.

What do we have.

What must we get.

Forecasting:

major effect JIT has is on lead times. Shortened that is.

Production planning.JIT emphasizes relationships with suppliers.

 

MPS = JIT levels schedule based on capacity,and material flow.

Shorter lead times, JIT requires a stable schedule to operate. Weekly time buckets are used, usually.

 

MRP= time buckets a week here also, in pure JIT there is no inventory,

bills of material can be flattened in this JIT arena.

BOTH MRP AND JIT ARE BASED ON MATERIAL FLOW.

Many production schedules will work including:

1/ demand pattern unstable. 2/ custom engineering required. 3/ quality is unpredictable. 4/volumes are low and infrequent.

 

Capacity mgmt. Linearity, will actually increase this. Better meet schedules.

Inventory mgmt. Back flushing or post deduct= as items are made , the work in process is credited (parts in general) backwards as a built in inventory checker.

 

 

 

OM 4530 TEST MATHEMATICS

chap 1 intro

inventory turns = annual C.O.G. sold / average inventory in dollars.

Chap 2 production planning

Level production plan = total product + back orders + ending inventory - opening inventory.

Or total forecast + opening backlog - opening backlog.

Chap 3 MPS.

Available to promise = period 1 = on hand- customer orders before next MPS.

Period 2 = MPS sch. Receipt - customer orders due before next MPS.

Chap 5. Capacity.

Utilization = hours worked / available hours.

Efficiency = (std. Hrs of worked produced / hours actually worked) * 100.

Rated capacity = available time *utilization * efficiency.

Required capacity.

Setup time + run time. And Actual time * efficiency * utilization.

Chap 8 forecasting.

Exponential smoothing = (alpha * latest demand) + (1 - alpha)(previous forecast).

Seasonal Index = period average demand / aveage demand for all periods OR per.avg.dmd / deseasonalized dmd.

Seasonal forecasts = seasonal index * deseasonalized demand

deseasonalized demand = actual seasonal demand / seasonal index.

MAD = sum of absolute deviations / number of observations.

Tracking signal = sum of forecast errors / MAD.

Chap 9 Inventory fundamentals.

Transportation inventory = I=tA/365 t=time in days,A=annual demand.

Carrying costs = cost of capital % * storage cost %*risk cost %.

Cost of placing order.= fixed costs / number of orders) + variable costs.

Chap 10 order quantities.

EOQ= Q= sqrt(2AS/ic) A=annual demand,S=order cost in $,(I) carrying cost %,c = unit cost in dollars.

Non-instantaneous receipt=EOQ= sqrt(2AS/ic(1-d/p). .d=usage rate, p= production rate.

Use of EOQ when costs not known= Q=sqrt(2Asub dS) or K=(sqrt A subd)/N N= orders per year.

Period order quantity = EOQ/average weekly usage.

Chap 11 independent demand ordering systems.

Order point=DDLT+SS, DDLT= demand during lead time. SS = safety stock.

Average inventory=(Q/2) + SS Q= order quantity.

Average or mean = sum of x/n n = total number of data.

Mad= sum of absolute deviations/ number of observations. Remember 1MAD,2MAD,3MAD.

MAD for LT1= MAD for FI * sqrt (LT1/F1).

Target level or maximum level inventory. T=D(R+L)+SS. D=demand per unit time, L=lead time duration, R=review period duration, SS= safety stock.

ORDER QUANtity from above = Q=T-I. I = inventory on hand.

 

 

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