24 Agg_Prod_Plan - Aggregate Production Planning Aggregate...

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Aggregate Production Planning
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Aggregate Planning is Long Term FORECASTING Marketing Parameters Personnel Plan CAPACITY/FACILITY PLANNING WORKFORCE PLANNING Product/Process Parameters Labor Policies Capacity Plan AGGREGATE PLANNING Aggregate Plan Strategy Work Schedule WIP/QUOTA SETTING DEMAND MANAGEMENT SEQUENCING & SCHEDULING Customer Demands Master Production Schedule SHOP FLOOR CONTROL WIP Position Tactics REAL-TIME SIMULATION PRODUCTION TRACKING Work Forecast Control
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Aggregate Plan Aggregate Plan: A statement of a company’s production rates, workforce levels, and inventory holding based on estimates of customer requirements and capacity limitations Aggregate Plan: A statement of a company’s production rates, workforce levels , and inventory holding based on estimates of customer requirements and capacity limitations Service Industry Staffing Plan Regarding staffs and labor related factors Service Industry Staffing Plan Regarding staffs and labor related factors Manufacturing Industry Production Plan Regarding production rates and inventory Manufacturing Industry Production Plan Regarding production rates and inventory
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Aggregate Plan – Outputs subcontracted Units or dollars subcontracted Workforce Adjustment Size of Workforce and Workforce Adjustment (in units or $) Production per month (in units or $) Levels Inventory Levels Aggregate plan stockout Units or dollars Of Backlogs, backorders , or stockout Reactive Alternatives Complementary Products Complementary Products Competitive Pricing Competitive Pricing Aggressive Alternatives
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Examples of Capacity Adjustment to Meet Demand 1. Producing at a constant rate and using inventory to absorb fluctuations in demand 2. Hiring and firing workers to match demand 3. Maintaining resources for high demand levels 4. Increase or decrease working hours (overtime and undertime) 5. Subcontracting work to other firms 6. Using part-time workers 7. Providing the service or product at a later time period (backordering) Demand Uni ts Time
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Basic Aggregation Cotton Shirts Men’s Women’s Boy’s Girl’s Style A Style B Style C Week1 Week2 Week3 Week4 Week5 Level of Aggregation - product - time
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Pure Strategy What are pros / cons of these strategies? Level Production Production Demand Units Time Chase Demand Production Demand Units Time
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Anticipation Inventory Pure APP Planning Strategies Time U n i t s Demand Production
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Balance Supply & Demand Intermediate Term (3-18 months) APP = Competitive Advantage: Consider a beer manufacturer Production of certain brands in specific plants High volume & low variety/plant Labor requirements Meticulous cleaning between batches Inventory Capacity Goal: High facility utilization Why?
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Production Stages Raw Material Selection QA Delivery Brewing: (Milling to Aging) Packaging Distribution Temp-controlled delivery Storage Resource limitations at each stage Scheduling Challenges????
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Hierarchical Planning Annual demand by
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