PLAN

1. THE BUSINESS PLAN

The business plan is a statement of the organization’s overall level of business activity for the

coming six to eighteen months, usually expressed in terms of outputs (in volume of sales) for its

various product groups, a set of individual products that share or consume common blocks of

capacity in the manufacturing process. It also specifies the overall inventory and backlog levels

that will be maintained during the planning period. The business plan is an agreement between

all functional areas—finance, production, marketing, engineering, R & D—about the level of

activity and the products they are committed to support. The business plan is not concerned with

all the details and specific timing of the actions for executing the plan. Instead, it determines a

feasible general posture for competing to achieve its major goals. The resulting plan guides the

lower-level, more details decisions.

2. AGGREGATE PRODUCTION (OUTPUT) PLANNING

The process of determining output levels of product groups over the coming six to eighteen

months on a weekly or monthly basis. It identifies the overall level of outputs in support of the

business plan. The plan recognizes the division’s existing fixed capacity and the company’s

overall policies for maintaining inventories and backlogs, employment stability and subcontracting.

3. AGGREGATE CAPACITY PLANNING

It is the process of testing the feasibility of aggregate output plans and evaluating overall capacity

utilisation. A statement of desired output is useful only if it is feasible. Thus, it addresses the

supply side of the firm’s ability to meet the demand. As for aggregate output plans, each plant,

facility, or division requires its own aggregate capacity plan. Capacity and output must be in

balance, as indicated by the arrow between them in Fig. 5.3. A capacity plan translates an output

plan into input terms, approximating how much of the division’s capacity will be consumed.

Although these basic capacities are fixed, management can manipulate the short-term capacities

by the ways they deploy their work force, by subcontracting, or by using multiple work shifts

to adjust the timing of overall outputs. As a result, the aggregate planning process balances output

levels, capacity constraints, and temporary capacity adjustments to meet demand and utilise

capacity at desired levels during the coming months. The resulting plan sets limits on the master

production schedule.

4. MASTER PRODUCTION SCHEDULING (MPS)

MPS is a schedule showing week by week how many of each product must be produced

according to customer orders and demand forecasts. Its purpose is to meet the demand for

individual products in the product group. This more detailed level of planning disaggregates the

product groups into individual products and indicates when they will be produced. The MPS is

an important link between marketing and production. It shows when incoming sales orders can

be scheduled into production, and when each shipment can be scheduled for delivery. It als

for material requirements planning. MRP provides information such as due dates for components

that are subsequently used for shop floor control. Once this information is available, it enables

managers to estimate the detailed requirements for each work centres.

7. CAPACITY REQUIREMENT PLANNING

Capacity requirement planning (CRP) is an iterative process of modifying the MPS or planned

resources to make capacity consistent with the production schedule. CRP is a companion process

used with MRP to identify in detail the capacity required to execute the material requirement

planning. At this level, more accurate comparisons of available and needed capacity for scheduled

workloads are possible.

8. SHOP FLOOR CONTROL

Shop floor control involves the activities that execute and control shop operations namely loading,

sequencing, detailed scheduling and expediting jobs in production. It coordinates the weekly and

daily activities that get jobs done. Individual jobs are assigned to machines and work centres

(loading), the sequence of processing the jobs for priority control is determined, start times and

job assignments for each stage of processing are decided (detailed scheduling ) and materials and

work flows from station to station are monitored and adjusted (expediting).

9. LOADING

Each job (customer order) may have its unique product specification and, hence, it is unique

through various work centres in the facility. As new job orders are released, they are assigned

or allocated among the work centres, thus establishing how much of a load each work centre

must carry during the coming planning period. This assignment is known as loading (sometimes

called shop loading as machine loading).

10. SEQUENCING

This stage establishes the priorities for jobs in the queues (waiting lines) at the work centres.

Priority sequencing specifies the order in which the waiting jobs are processed; it requires the

adoption of a priority sequencing rule.

11. DETAILED SCHEDULING

Detailed scheduling determines start times, finish times and work assignments for all jobs at each

work centre. Calendar times are specified when job orders, employees, and materials (inputs),

as well as job completion (outputs), should occur at each work centre. By estimating how long

each job will take to complete and when it is due, schedulers can establish start and finish dates

and develop the detailed schedule