Planning vs Scheduling
PhD. Eng. Gheorghita Mazareanu
Supply Chain Business Models
Supply-production-distribution system
Manufacturing strategy and lead time
Manufacturing is complex. Some firms make a few different products, whereas others make many products.
However, each uses a variety of processes, machinery, equipment, labor skills, and material.
To be profitable, a firm must organize all these factors to make the right goods at the right time at top quality and do so
as economically as possible.
It is a complex problem, and it is essential to have a good planning and control system.
A good planning system must answer four questions:
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?
These are questions of priority and capacity.
Priority relates to what products are needed, how many are needed, and when
they are needed. The marketplace establishes the priorities. Manufacturing is responsible for devising plans to satisfy
the market demand if possible.
Capacity is the capability of manufacturing to produce goods and services.
Eventually it depends on the resources of the company—the machinery, labor, and financial resources, and the
availability of material from suppliers. In the short run, capacity is the quantity of work that labor and equipment can
perform in a given period.
The Production Plan
Given the objectives set by the strategic business plan, production management is
concerned with the following:
• The quantities of each product group that must be produced in each period.
• The desired inventory levels.
• The resources of equipment, labor, and material needed in each period.
• The availability of the resources needed.
The Master Production Schedule
The master production schedule (MPS) is a plan for the production of individual end items. It breaks down the
production plan to show, for each period, the quantity of each end item to be made.
Inputs to the MPS are the production plan, the forecast for individual end items, sales orders, inventories, and
existing capacity.
The level of detail for the MPS is higher than for the production plan.
Whereas the production plan was based upon families of products (tricycles), the master production schedule is
developed for individual end items (each model of tricycle). The planning horizon usually extends from 3 to 18
months but primarily depends on the purchasing and manufacturing lead times.
Manufacturing resource planning (MRP II)
Amalgamated Nut Crackers, Inc., makes a family of nut crackers.
The most popular model is the walnut, and the sales department has prepared a 6-week forecast.
The opening inventory is 50 dozen (dozen is the unit used for planning).
As master planner, you must prepare an MPS. The nutcrackers are made in lots of 100 dozen.
The Material Requirements Plan
The material requirements plan (MRP) is a plan for the production and purchase of the components used in making the
items in the master production schedule.
It shows the quantities needed and when manufacturing intends to make or use them.
Purchasing and production activity control use the MRP to decide the purchase or manufacture of specific items.
The level of detail is high. The material requirements plan establishes when the components and parts are needed to
make each end item.
The planning horizon is at least as long as the combined purchase and manufacturing lead times. As with the master
production schedule, it usually extends from 3 to 18 months.
The job of the MRP is to produce the right components at the right time so that the MPS can be maintained.
The MRP depends on accurate bills of material and on accurate inventory records. Bills of material can be created in
many ways, but one department (or individual) must be responsible for them. Inventory records are indispensable to
the MRP, and the MRP is only as good as the inventory records.
The MRP exploding and offsetting processes outlined in this book are largely done by the computer. The logic used is
repetitive and, while error prone when done by individuals, can be accomplished well by computer. Good MRP
practice is achieved by planners being able to work with the system.
The MRP process uses the bill of materials that lists components used to make a product, the lead time to make or
obtain those components, and the existing inventory of those components to calculate a series of planned order
releases to obtain or make components to meet future product needs.
Capacity Management
At each level in the manufacturing planning and control system, the
priority plan must be tested against the available resources and capacity
of the manufacturing system.
The basic process is one of calculating the capacity needed to
manufacture the priority plan and of finding methods to make that
capacity available. There can be no valid, workable production plan unless
this is done. If the capacity cannot be made available when needed, then
the plans must be changed.
Determining the capacity required, comparing it to available capacity, and
making adjustments (or changing plans) must occur at all levels of the
manufacturing planning and control system.
Over several years, machinery, equipment, and plants can be added to or
taken away from manufacturing. However, in the time spans involved
from production planning to production activity control, these kinds of
changes cannot be made. Some changes, such as changing the number of
shifts, working overtime, subcontracting the
work, and so on, can be accomplished in these time spans.
The objective of scheduling is to meet delivery dates and to make the best use of manufacturing resources. It involves
establishing start and finish dates for each operation required to complete an item. To develop a reliable schedule, the
planner must have information on routing, required and available capacity, competing jobs, and manufacturing lead
times (MLT) at each work center involved.
Scheduling Techniques
There are many techniques to schedule shop orders through a plant, but all of them require an understanding of forward
and backward scheduling as well as finite and infinite loading.
Forward scheduling assumes that material procurement and operation scheduling for a component start when the order
is received, whatever the due date, and that operations are scheduled forward from this date. The result is completion
before the due date, which usually results in a buildup of inventory. This method is used to decide the earliest delivery
date for a product.
Forward scheduling is used to calculate how long it will take to complete a task.
The technique is used for purposes such as developing promise dates for customers or figuring out whether an order
behind schedule can be caught up.
Backward scheduling The last operation on the routing is scheduled first and is scheduled for completion at the due
date. Previous operations are scheduled back from the last operation. This schedules items to be available as needed and
is the same logic as used in the MRP system.
Work-in-process inventory is reduced, but because there is little slack time in the system, customer service may suffer.
Backward scheduling is used to determine when an order must be started.
Backward scheduling is common in industry because it reduces inventory.
Advanced Planning and Scheduling (APS)
