We're going to talk a little bit about planning, and planning in the context of manufacturing, and controlling manufacturing systems.
When we talk about planning, the context here is that how we can make sure that what happens, before something needs to be manufactured. How can we make sure that the things that happened before makes what happens in the actual manufacturing as efficient as possible? And to do this we require planning. And planning, in this sense, is when we make decisions about future activities, and events.
We're going to talk about five different levels of planning, And the first one, called…
Here you plan on a strategic, very high level. The number of supply chain links, and nodes, and so on, that's the things you plan when you make a strategic network plan. And typically you revisit this plan every year so it's quite long-term planning. And the planning horizon that you plan for can stretch out to several years, actually. And the period length that you plan for is years, or perhaps if you're very detailed, as low as quarter. So you never look beyond a stretch of three months, for instance, in a strategic network plan.
Now the questions that you try to answer
When you make a strategic network plan, those are the big ones.
a) How many warehouses do we need?
b) How many manufacturing sites do we want?
c) How will we source our production?
d) Do we need new partnerships?
e) Do we need new suppliers, for instance?
f) What type of markets do we need to reach?
So these are the big strategic decisions. Has very little to do with the day-to-day operations, actually.
More to put the game board in place, so that you can then start manufacturing. Things that meet the strategic goals of the company.
2. Product group level
If we make furniture, for instance, we can plan for the group tables, or the group chairs, or something like that. And the planning horizon we have here is one to two years ahead. We are not looking beyond two years, 24 months ahead often. And the length of the period that we planned for is a quarter, or maybe down to single months. And we revisit this plan every quarter, or even every month to see OK,
a) Do we need to change anything?
b) Do we need to change our prognosis, and so on?
The things we are looking at here are related to the business concept of the company.
How much will we sell from a specific product group? For instance. And how much resources will we need in order to meet demand on a quite high level? We are not looking into details, we are looking at still high-level, but we are looking into resource need in production.
3. Mass production scheduling.
Here we plan for individual products within a specific product group, and the planning horizon here
is six to 12 months ahead. So we are getting closer to the detailed planning, but it's still not that detailed yet. But we will revisit this plan every month, or maybe every week. And the period length that we planned for is down to single weeks at most, or perhaps months. And master production scheduling is also called MPS. That’s sort of the official abbreviation of this. And here we look into when we need to produce certain products in order to meet demands.
How much do we need to produce during each of these months, or weeks, these planning periods, in order to meet the demands from the higher level of planning that we put up there?
4. Order planning,
So now we are pretty detailed actually.
Here we look at the items that comprise different products. The items that we need in order to produce,
For instance, a chair. Then we need four legs, and so on. And here we have the planning horizon one to six months, because here
a) We need to involve subcontractors.
b) We need to involve systems suppliers,
c) We need to involve other companies, and place orders so that people get the parts we need, when we need them.
So we are planning periods of weeks, or even days here.And this plan is monitored quite closely, weekly, or even daily revisiting because now we are getting close to putting actual resources to work, and that, as we all know, costs quite a lot of money. So we really need to know that we have the production plan in place.
So the things we need to look to here is
a) When will certain items be needed in production?
b) When do we need the legs?
Well we are going to assemble the chairs in week 24, and we need the legs, at latest, in week 23.So and this will then trigger orders of items, or production of items, so that we can assemble the chairs in our example. The correct week, so that we can meet the market demand.
Here we are planning single operations for single orders and single items. And the planning horizon is one to four weeks ahead. So we are not looking that much ahead, one month at the most. And we are revisiting this plan every day, because here we are down to individual operators, even individual machines, for individual tasks that need to be done, need to be performed. So the period length can go down to days, or hours, or even lower than that. It’s a very detailed type of operation. So we will look into when will a specific item be produced? And when will a specific item be needed to arrive from a sub supplier?
So we have an example here, from the furniture industry. On the strategic level, the strategic network panning, you might plan that OK we will sell tables for the next five years at least. This is broken down to the sales and operations planning. And there you say we will sell 3,000 tables in the first quarter of next year. And the master production scheduling, when you break this down further, say OK to be able to meet these 3,000 tables we need to produce
1,000 tables of type a, 1,500 of type b, and 500 of type c by the first quarter next year. Otherwise we cannot meet these demands.
We go down one level again, and to say to be able to produce according to this plan we need 4,000 table legs of type a 6,000 table legs of type b, 2,000 table legs of type c. Each table has four legs, of course. And the lowest level of the production activity control, now we are very close to actually producing the tables. We are saying type a will be produced in week 44 to 48,type b in 49 to 50, type c in week 51 to 52,over Christmas and New year’s, sorry guys. So this is a typical example of how a production can be planned ahead, using a number of different time perspectives, a number of different levels.
When we talk about planning, the context here is that how we can make sure that what happens, before something needs to be manufactured. How can we make sure that the things that happened before makes what happens in the actual manufacturing as efficient as possible? And to do this we require planning. And planning, in this sense, is when we make decisions about future activities, and events.
We're going to talk about five different levels of planning, And the first one, called…
Strategic network planning1. Strategic network planning, this is the one with least amount of detail.
Here you plan on a strategic, very high level. The number of supply chain links, and nodes, and so on, that's the things you plan when you make a strategic network plan. And typically you revisit this plan every year so it's quite long-term planning. And the planning horizon that you plan for can stretch out to several years, actually. And the period length that you plan for is years, or perhaps if you're very detailed, as low as quarter. So you never look beyond a stretch of three months, for instance, in a strategic network plan.
Now the questions that you try to answer
When you make a strategic network plan, those are the big ones.
a) How many warehouses do we need?
b) How many manufacturing sites do we want?
c) How will we source our production?
d) Do we need new partnerships?
e) Do we need new suppliers, for instance?
f) What type of markets do we need to reach?
So these are the big strategic decisions. Has very little to do with the day-to-day operations, actually.
More to put the game board in place, so that you can then start manufacturing. Things that meet the strategic goals of the company.
At the second level, and now were going down one level of detail, here we plan on the ...
Product group level
2. Product group level
If we make furniture, for instance, we can plan for the group tables, or the group chairs, or something like that. And the planning horizon we have here is one to two years ahead. We are not looking beyond two years, 24 months ahead often. And the length of the period that we planned for is a quarter, or maybe down to single months. And we revisit this plan every quarter, or even every month to see OK,
a) Do we need to change anything?
b) Do we need to change our prognosis, and so on?
The things we are looking at here are related to the business concept of the company.
How much will we sell from a specific product group? For instance. And how much resources will we need in order to meet demand on a quite high level? We are not looking into details, we are looking at still high-level, but we are looking into resource need in production.
Mass production schedulingThe third level, now were going down closer to the actual production planning.
3. Mass production scheduling.
Here we plan for individual products within a specific product group, and the planning horizon here
is six to 12 months ahead. So we are getting closer to the detailed planning, but it's still not that detailed yet. But we will revisit this plan every month, or maybe every week. And the period length that we planned for is down to single weeks at most, or perhaps months. And master production scheduling is also called MPS. That’s sort of the official abbreviation of this. And here we look into when we need to produce certain products in order to meet demands.
How much do we need to produce during each of these months, or weeks, these planning periods, in order to meet the demands from the higher level of planning that we put up there?
Order planningAnd then we go down to what we call
4. Order planning,
So now we are pretty detailed actually.
Here we look at the items that comprise different products. The items that we need in order to produce,
For instance, a chair. Then we need four legs, and so on. And here we have the planning horizon one to six months, because here
a) We need to involve subcontractors.
b) We need to involve systems suppliers,
c) We need to involve other companies, and place orders so that people get the parts we need, when we need them.
So we are planning periods of weeks, or even days here.And this plan is monitored quite closely, weekly, or even daily revisiting because now we are getting close to putting actual resources to work, and that, as we all know, costs quite a lot of money. So we really need to know that we have the production plan in place.
So the things we need to look to here is
a) When will certain items be needed in production?
b) When do we need the legs?
Well we are going to assemble the chairs in week 24, and we need the legs, at latest, in week 23.So and this will then trigger orders of items, or production of items, so that we can assemble the chairs in our example. The correct week, so that we can meet the market demand.
Production activity control5. Production activity control
Here we are planning single operations for single orders and single items. And the planning horizon is one to four weeks ahead. So we are not looking that much ahead, one month at the most. And we are revisiting this plan every day, because here we are down to individual operators, even individual machines, for individual tasks that need to be done, need to be performed. So the period length can go down to days, or hours, or even lower than that. It’s a very detailed type of operation. So we will look into when will a specific item be produced? And when will a specific item be needed to arrive from a sub supplier?
So we have an example here, from the furniture industry. On the strategic level, the strategic network panning, you might plan that OK we will sell tables for the next five years at least. This is broken down to the sales and operations planning. And there you say we will sell 3,000 tables in the first quarter of next year. And the master production scheduling, when you break this down further, say OK to be able to meet these 3,000 tables we need to produce
We go down one level again, and to say to be able to produce according to this plan we need 4,000 table legs of type a 6,000 table legs of type b, 2,000 table legs of type c. Each table has four legs, of course. And the lowest level of the production activity control, now we are very close to actually producing the tables. We are saying type a will be produced in week 44 to 48,type b in 49 to 50, type c in week 51 to 52,over Christmas and New year’s, sorry guys. So this is a typical example of how a production can be planned ahead, using a number of different time perspectives, a number of different levels.
