Manufacturing Planning &

Control
Evolution of Manufacturing Planning &
Control

MRP
MRP
Closed
Loop
MRPII ERP
Material Requirement
Planning
Manufacturing
Requirement Planning
Enterprise Resource
Planning
Material Requirement
Planning Closed Loop
MRPII Components
Business Planning
Sales & Operations
Planning
Master Scheduling
Capacity Check
(CRP)
Capacity Check
(RCCP)
Capacity Check
(RR)
Long Term
Planning
Medium Term
Planning
Material
Requirement
Planning
Demand
Management
Strategic Planning
MRPII
Business Plan
Business plan is a financial plan. It tells the story of the
company from a financial standpoint.
Some of the elements of a business plan are
Projected Sales
Projected Cost
Projected Profit
The business plan is a yearly plan



Master Schedule
Sales & Operations
Planning
Material
Requirement
Planning
Master Scheduling
Capacity Check
(CRP)
Capacity Check
(RCCP)
Resource Check
(RR)
Long Term
Planning
Medium Term
Planning
Demand
Management
Master Schedule
Material Requirement
Planning
Master Scheduling
- Demand Supply Balance
- Order Promising

Demand
Management

- Forecasting
- Forecast consumption


Rough Cut Capacity
Planning

- Capacity Check
Master Schedule
Material Requirement
Planning
Demand of material vs. supply of material
(PP translated to material vs. stock +
purchases)
Master Scheduling

- Demand Supply Balance
Total Demand vs. Supply (Stock + PP)

- Order Promising
Orders vs. Supply (Stock + PP)
Demand
Management

- Forecasting
- Forecast consumption

Rough Cut Capacity
Planning

- Capacity Check
Demand of capacity vs.
supply of capacity
(PP translated to load vs.
Available capacity)
Master Schedule
The MS achieves mainly 2 functions. These are
Demand Supply Balance
Balance Total Demand (Forecast & Orders) vs. Total Supply (Stock &
Production plan)
Technique used is the Projected Available Balance (PAB)
Order Promising
Compares orders with supply (stock & production plan) to see what can
be promised to the customer without changing the agreement (MS)
Technique used is the Available To Promise (ATP)



Master Schedule
The MPS has 2 main inputs & 2 controls
Input 1: Demand represented in the forecast, orders and total demand
Input 2: Supply represented in the initial stock and the production plan
Control 1: Projected Available Balance (PAB)
Control 2: Available To Promise (ATP)




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
100 100 100 100 100 100 100 100
Projected Available Balance (PAB)
80 120 150 150 100 0 -100 -100 -50
Available to Promise (ATP)
120 150 200 280 380 480 580 680
Control-1
Control-2
Demand
data
Prod data
Projected Available Balance

The Projected Available Balance (PAB) checks if the supply (stock
+ production plan) will be sufficient for the total demand
A negative balance means that supply is not in sync with demand




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
100 100 100 100 100 100 100 100
Projected Available Balance (PAB)
80 120 150 150 100 0 -100 -100 -50
Available to Promise (ATP)
120 150 200 280 380 480 580 680
Control-1
Control-2
Demand
data
Prod data
Available to Promise

The Available to Promise (ATP) answers the question: Can a new
customer order be delivered in the requested period?
ATP represents the remaining quantity of the agreement that can
be sold.




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
100 100 100 100 100 100 100 100
Projected Available Balance (PAB)
80 120 150 150 100 0 -100 -100 -50
Available to Promise (ATP)
120 150 200 280 380 480 580 680
Control-1
Control-2
Demand
data
Prod data
Available to Promise
ATP lets the sales people work on an agreement on future
remaining stock rather than on current stock (in the case of MTS).
ATP lets the sales people work on an agreement on future
remaining capacity rather than on current remaining capacity (in the
case of MTO).




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
100 100 100 100 100 100 100 100
Projected Available Balance (PAB)
80 120 150 150 100 0 -100 -100 -50
Available to Promise (ATP)
120 150 200 280 380 480 580 680
Control-1
Control-2
Demand
data
Prod data
Available to Promise

The Available to Promise (ATP) in the case where there are no
production plan in some time zones.
The available to promise with look ahead solves this problem.




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
200 350 100 100 100
Projected Available Balance (PAB)
80 220 150 50 200 0 -100 -100 -50
Available to Promise (ATP)
100 100 100 430 430 530 630 730
Control-1
Control-2
Demand
data
Prod data
Forecast Consumption & Total Demand

Total demand = Orders + Unconsumed Forecast
Unconsumed forecast will be

Forecast consumption per channel is important in order to capture
the demand right and thus adjust the production plan. Forecast
consumption allows to readjust the forecast per channel and thus
calculate the unconsumed forecast (remaining forecast)
Forecast consumption per channel can help us make the ATP in a
more flexible way (read the article)




Forecast Consumption & Its relation to
ATP

The Available to Promise (ATP) answers the question: Can a new
customer order be delivered in the requested period?
A negative balance means that supply is not in sync with demand




Past 1 2 3 4 5 6 7 8
Forecast
50 50 100 150 200 200 100 50
Orders
60 70 50 20 0 0 0 0
Total Demand
60 70 100 150 200 200 100 50
Production Plan
100 100 100 100 100 100 100 100
Projected Available Balance (PAB)
80 120 150 150 100 0 -100 -100 -50
Available to Promise (ATP)
120 150 200 280 380 480 580 680
Control-1
Control-2
Demand
data
Prod data
Rough Cut Capacity Planning (RCCP)

RCCP checks whether the production plan (MPS) suggested in the
Master schedule can be achieved or not.
It compares the load versus the available capacity per time zone
per work center.
RCCP helps develop a feasible MPS from a preliminary MPS
(develop an MPS which is not overstated).
The first step is to translate the PP (MPS) into a load plan. This is
done by multiplying the MPS by a resource bill




Rough Cut Capacity Planning (RCCP)

RCCP checks whether the production plan (MPS) suggested in the
Master schedule can be achieved or not.
It compares the load versus the available capacity per time zone
per work center.
The first step is to translate the PP (MPS) into a load plan. This is
done by multiplying the MPS by a resource bill



Rough Cut Capacity
Planning

- Capacity Check
Demand of capacity vs.
supply of capacity
(PP translated to load vs.
Available capacity)
Item
1 2 3 4 5 6 7 8
Item 01
50 50 100 150 200 200 100
Item 02
60 70 50 20 0 0 0
Item 03
60 70 100 150 200 200 100
Item 04
100 100 100 100 100 100 100
Rough Cut Capacity Planning (RCCP)

Capacity
Required
Capacity
Available