Computer Integrated Manufacturing and

Robotics
(IPPC-307)
Computer Aided Production Planning and Control

Dr. Bikash Kumar

Assistant Professor, IPE Department
National Institute of Technology Jalandhar
Email: kumarb@nitj.ac.in

DR. B. R. AMBEDKAR
NATIONAL INSTITUTE OF TECHNOLOGY
JALANDHAR
(An Institute of National Importance, established by MHRD)
Syllabus

• Computer Aided Process, Production Planning and Control:

Computer integrated production management system,
Variant & Generative methods of CAPP, aggregate planning,
master production schedule, shop floor control, materials
requirement planning, capacity planning, manufacturing
resource planning and enterprise resource planning.

Dr. Bikash Kumar 2

Process Planning

• The product design is the plan for the product and its
components and subassemblies.
• A manufacturing plan is needed to convert the product
design into a physical entity.
• The activity of developing such a plan is called process
planning.
• It is the bridge between product design and manufacturing.
• Process planning involves determining the sequence of
processing and assembly steps that must be accomplished
to make the product.

Dr. Bikash Kumar 3

Contd…

• Process planning is concerned with the technical details:

✓ The engineering and technological issues of how to make
the product and its parts.
✓ What types of equipment and tooling are required to
fabricate the parts and assemble the product?
• Production planning is concerned with the logistics issues
of making the product:
✓ Ordering the materials and obtaining the resources
required to make the product in sufficient quantities to
satisfy demand.

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Scope of Process Planning
• Interpretation of design drawings. First, the planner must analyze the part
or product design (materials, dimensions, tolerances, surface finishes, etc.).
• Choice of processes and sequence. The process planner must select which
processes and their sequence are required, and prepare a brief description
of all processing steps.
• Choice of equipment. must develop plans that utilize existing equipment in
the plant. Otherwise, the company must purchase the component or invest
in new equipment.
• Choice of tools, dies, molds, fixtures, and gages. must decide what tooling is
required for each processing step. The actual design and fabrication of these
tools is usually delegated to a tool design department and tool room, or an
outside vendor specializing in that type of tooling.
• Analysis of methods. Workplace layout, small tools, hoists for lifting heavy
parts, even in some cases hand and body motions must be specified for
manual operations.
• Choice of cutting tools and cutting conditions. These must be specified for
machining operations, often with reference to standard handbook
recommendations. Similar decisions about process and equipment settings
must be made for processes other than machining.
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Process Planning for Parts

• For individual parts, the processing sequence is documented

on a form called a route sheet (some companies call it an
operation sheet).
• Just as engineering drawings are used to specify the
product design, route sheets are used to specify the
process plan.
• They are counterparts, one for product design, the other for
manufacturing.

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Contd…

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Processing sequence

• A typical processing sequence to fabricate an individual part

consists of
1. A basic process,
2. Secondary processes,
3. Property-enhancing operations, and
4. Finishing operations.

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Contd…

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Process Planning for Assemblies

• Process planning for assembly involves development of

assembly instructions similar to the list of work elements

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Make or Buy Decision

• An important question that arises in process planning is

whether a given part should be produced in the company’s
own factory or purchased from an outside vendor.
• If the company does not possess the equipment or expertise
in the particular manufacturing processes required to make
the part, then the answer is obvious: The part must be
purchased because there is no internal alternative.
• However, in many cases, the part could either be made
internally using existing equipment or purchased externally
from a vendor that possesses similar manufacturing
capability.

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Example: Make or Buy Cost Decision

• The quoted price for a certain part is $20.00 per unit for 100
units.
• The part can be produced in the company’s own plant for
$28.00.
• The cost components of making the part are as follows:
Unit raw material cost = $8.00 per unit
Direct labor cost = $6.00 per unit
Labor overhead at 150% = $9.00 per unit
Equipment fixed cost = $5.00 per unit
Total = $28.00 per unit

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Solution
• Consider the possible impact on plant operations if the quote is
accepted.
• Equipment fixed cost of $5.00 is an allocated cost based on an
investment that was already made.
• The labor overhead cost of $9.00 consists of factory space, utility,
and labor costs that remain even if the part is purchased.
• In addition, there are the costs of purchasing and receiving
inspection.
• By this reasoning, a buy decision is not a good decision because
it might cost the company $20.00 + $5.00 + $9.00 = $34.00 per
unit (not including purchasing and receiving inspection)
• If the equipment can be used to produce other parts for which
the in-house costs are less than the corresponding outside
quotes, then a buy decision is a good decision.
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Factors in the Make or Buy Decision
How do part costs This must be considered the most important factor in the make or buy decision.
compare? However, the cost comparison is not always clear
Is the process available If the equipment and technical expertise for a given process are not available
in-house? internally, then purchasing is the obvious decision.
What is the total Lower quantities favor the buy decision.
production quantity and Longer product life tends to favor the make decision.
anticipated product life?
Is the component a Standard catalog items (e.g., hardware items such as bolts, screws, nuts, etc. are
standard item? produced economically by suppliers specializing in those products. favor a
purchase decision on these standard parts.
Is the supplier reliable? A vendor that misses a delivery on a critical component can cause a shutdown at
the company’s final assembly plant. Suppliers with proven delivery and quality
records are favored over suppliers with lesser records.
Is the company’s plant In peak demand periods, the company may be forced to augment its own plant
already operating at full capacity by purchasing a portion of the required production from outside
capacity? vendors.
Does the company need Companies sometimes purchase parts from outside vendors to maintain an
an alternative supply alternative source to their own production plants. for example, as a safeguard
source? against a strike at the company’s parts production plant.
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APPROACHES TO PROCESS PLANNING

• There are basically two approaches to process planning

which are as follows :
1. Manual experience-based process planning, and
2. Computer-aided process planning method.

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Manual Experience-based Process Planning

• Feasibility of process planning is dependent on

many upstream factors (design and availability of
machine tools).
• Downstream manufacturing activities such as
scheduling and machine tool allocation are also
influenced by such process plan.
• Therefore, in order to generate a proper process
plan, the process planner must have sufficient
knowledge and experience.

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Difficulties in Manual Process Planning
• Following difficulties are associated with manual
experienced based process planning method :
✓ Different process planners have different experiences,
skills, and knowledge of the available processes in the
plant.
✓ Leads to variations and inconsistencies in the process
plans
✓ It is time consuming over a period of time, plan developed
are not consistent.
✓ Another problem is that the shop-trained people who are
familiar with the details of machining and other processes
are gradually retiring and will be unavailable in the future
to do process planning.
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COMPUTER AIDED PROCESS PLANNING

• Computer Aided Process Planning (CAPP) is a means to

automatically develop the process plan from the geometric
image of the component.
• It helps determine the processing steps required to make a
part
• The key to development of such CAPP Systems is to
structure the data concerning part design, manufacturing
facilities and capabilities into categories and logical
relationships.
• Fully integrate CAD and CAM

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Framework for Computer Aided Process
Planning

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Benefits of CAPP
• Process rationalization and standardization. Automated process
planning leads to more logical and consistent process plans than
manual process planning. Standard plans tend to result in lower
manufacturing costs and higher product quality.
• Increased productivity of process planners. The systematic approach
and the availability of standard process plans in the data files permit
more work to be accomplished by the process planners.
• Reduced lead time for process planning. Process planners working
with a CAPP system can provide route sheets in a shorter lead time
compared to manual preparation.
• Improved legibility. Computer-prepared route sheets are neater and
easier to read than manually prepared route sheets.
• Incorporation of other application programs. The CAPP program can
be interfaced with other application programs, such as cost
estimation.

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Approaches to CAPP
• Two basic approaches:
✓ Variant
✓ Generative
• The variant approach uses a file of standard process plans to
retrieve the best plan in the file after reviewing the design.
• The plan can then be revised manually if it is not totally
appropriate.
• The generative approach to CAPP starts with the product design
specifications and can generate a detailed process plan complete
with machine settings.
• CAPP systems use design algorithms, a file of machine
characteristics, and decision logic to build the plans.
• Expert systems are based on decision rules and have been used
in some generative CAPP systems.

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Variant Approach

• Also called retrieval approach

• In the variant process planning approach, a process plan for
a new part is created by recalling, identifying and retrieving
an existing plan for a similar part making necessary
modifications for the new part.
• Uses a Group Technology (GT) code to select a generic
process plan from the existing master process plans
developed for each part family and edits to suit the
requirement of the part.
• Commonly implemented with GT coding system.
• The parts are segmented into groups based on similarity and
each group has a master plan.
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4 steps in variant CAPP
• Define the coding scheme: Adopt existing coding or
classification schemes to label parts for the purpose of
classification
• Group the parts into part families: Group the parts into part
families using coding scheme selected earlier based commonality
of part features.
• Develop a standard process plan: develop a standard process
plan for each part family based on the common features of the
part types. The process plan can be used for every part type
within the family with suitable modifications.
• Retrieve and modify the standard plan: When a new part enters
the system, it is assigned to a part family based on the coding
and classification scheme. Then the corresponding standard
process plan is retrieved and modified to accommodate the
unique features of the new parts.
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General procedure for using variant CAPP

New part design

Preparatory Stage
Derive GT code no for
part

Search part family file for Select coding system &

Part family file
GT Code No. form part families

Retrieve standard process Prepare standard process

Standard process plan file
plan plan for part families

Edit existing or write a

new plan

Other application
Process plan formatter
program

Process plan (Route

sheet)

Dr. Bikash Kumar 24

Example

NEW PART

PROCESS PLANS ON FILE

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Contd…

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Contd…

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Pros of variant approach

• Once a standard plan has been selected, the computer

generates a variety of components that can be planned.
• Since the process for the existing product is already
available with the computer, we have to feed only the
variations, and the computer can compute and give the full
process details.
• Comparatively simple programming and installation
(compared with generative systems) are required to
implement a planning system.
• The system is easy to understand, and the planner has
better control of the final plan.
• It is easy to learn and easy to use.
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Cons of variant approach

• The components to be planned are limited to similar

components previously planned.
• Experienced process planners are still required to modify
the standard plan for the specific component.
• Variant planning cannot be used in an entirely automated
manufacturing system without additional process planning.

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Generative Approach

• A process plan is created from scratch for each component

without human intervention.
• Designed to automatically create process information to
develop the process plan for a part
• These systems contain the logic to use manufacturing
databases and suitable part-description schemes generate a
process plan for a particular part.
• In the generative approach, process plans are generated by
means of decision logic, formulas, technology algorithms,
and geometry based data to perform uniquely the many
processing decisions for converting a part from raw material
to a finished state.
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Diagram of Generative Process Plan

Geometric
definition M/C
from CAD specification
& capability
Part interrogation
Feature extraction
Feature recognition Knowledge Acquisition

Interface System
Selection of Process

Final Selection of M/C tool

Process Knowledge base
Plan Operations and Time
calculations

Dr. Bikash Kumar 32

Contd…

• There are two major components of a generative process

planning system.
✓ A geometry based coding scheme
✓ Process knowledge in the form of decision logic and data

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Geometry based coding scheme

• The objective is to define all geometric features related

surfaces together with feature dimensions, locations,
tolerances and the surface finish desired on the features.
• The level of detail is much greater in a generative system
than a variant system.
• Such details as rough and finished states of the parts and
• Process capability of machine tools to transform these parts
to the desired states are provided

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Process knowledge in the form of decision logic
and data
• Process knowledge in the form of decision logic and data are
used for matching of part geometry requirement with the
manufacturing capabilities.
• All steps related to process planning are automatically carried
out.
1. Include process selection, machine tools, tools, jigs and fixture,
materials, inspection equipment and sequencing of operations.
2. Setup and machining times are calculated.
3. Operation instruction sheets are generated to help the
operators run the machines in the case of manual operations.
4. If the machines are numerically controlled, the NC codes are
automatically generated.
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Basis of process knowledge method
• Manufacturing knowledge is the backbone of process planning
is not a one time activity but a recurring dynamic phenomena.
• Furthermore the sources of manufacturing knowledge are many
and diverse, such as the experience of manufacturing personnel;
handbooks; suppliers of major machine tools, tools, jigs or
fixtures, materials and inspection equipments and customers.
• To use this wide spectrum of knowledge, it is necessary to
develop a good knowledge structure to help provide a common
denominator for understanding manufacturing information,
ensuring its clarity and providing a framework for future
modifications.
• Tools available for this purpose are flowcharts, decision trees,
decision tables etc.
Dr. Bikash Kumar 36
Decision Tables

• Decision tables provide a convenient way to document

manufacturing knowledge.
• They are principle elements of all decision table-based
process planning systems.
• The elements of a decision table are conditions, actions,
and rules.
• They are organized in the form of an allocation matrix
where the conditions state the goal we want to achieve and
the actions state the operations we have to perform.
• The rules formed by entry values according to the
experience of experts, establish the relation between
conditions and actions.
Dr. Bikash Kumar 37
Contd…

• A table of rows and columns, separated into four

quadrants
• Conditions
• Condition alternatives
• Actions to be taken
• Rules for executing the actions

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Developing Decision Tables
• Determine conditions that affect the decision
• Determine possible actions that can be taken
• Determine condition alternatives for each condition
• Calculate the maximum number of columns in the decision
table
• Fill in the condition alternatives
• Complete table by inserting an X where rules suggest
actions
• Combine rules where it is apparent
• Check for impossible situations
• Rearrange to make more understandable

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Problem statement to be solved with decision
table
• Consider the problem of selection of lathe and grinding
machine for job involving turning or grinding operations.
Data on the conditions such as lot size, diameter, surface
finish, and tolerance desired are available. They are
compiled in the form of a decision table as shown in Table.
Make a machine selection recommendation if
a) The lot size of the job is 70 units; diameter is relatively small; the surface
roughness desired is 30 µm; and the tolerance range required is ±0.003 in.
b) The lot size of the job is less than 10 units; diameter is relatively small; the
surface roughness desired is 45 µm; and the tolerance range required is
±0.004 in.
c) The lot size is greater than 50 units; diameter is relatively small; surface
roughness is 20 µm; and tolerance is less than 0.0008 in.

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Checking for Completeness and Accuracy

• Four main problems

• Incompleteness
• Impossible situations
• Contradictions
• Redundancy

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Checking the decision table for inadvertent
contradictions and redundancy is important

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Contd…

Generative approach to CAPP

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Pros of generative approach

• The computer can generate consistent process plans rapidly.

• New components can be planned as easily as existing
components.
• The computer can integrate the planning with an automated
manufacturing facility to provide detailed control
information.

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Variant or Generative, Which to Use?
• A variant system is better for manufacturing setting where similar
parts are manufactured repetitively.
• Because parts are similar, Group Technology can easily be
implemented and shows quick and significant return on investment
(ROI).
• Because similar parts are produced repetitively, process plan can be
retrieved, slightly modified and used, without going through too much
trouble.
• Generative process planning is better suited for a manufacturing
environment in which part does not exhibit too much similarity and
new part are introduced on a regular basis.
• In this case, benefits cannot be gained from Group Technology due to
dissimilarity of parts.
• Because, new parts are regularly introduced, historical data does not
have too much value to the process planner.
• However, aforementioned approach is a rough guideline for selecting
the appropriate CAPP approach.
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Hybrid CAPP System
• The hybrid system can be characterised as an advanced
application of retrieval type CAPP with additional features of
generative type CAPP.
• The hybrid system can be implemented in the following three
ways:
✓ The generative mode can be used to create a process plan from
scratch to the maximum extent possible, and then the variant
mode can be used to fill in the remaining details.
✓ The variant mode can be used to retrieve the general process
plan, and then the generative mode can be used to modify it.
✓ For complicated part features, the generative mode can be
used, while for simple and moderate part features, the variant
mode can be used.
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Some of the Variant and Generative CAPP
Systems

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Production Planning and Control Systems

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Production Planning and Control
• Focus on production rates and inventory holdings based on
the varying customer requirements and capacity limitations.
• Concerned with the logistics problems that are encountered
in manufacturing:
✓ Managing the details of what and how many products to
produce and when
✓ Obtaining the raw materials, parts, and resources to
produce those products
• PPC solves these logistics problems by managing
information.
• Computers are essential for processing the tremendous
amounts of data involved

Dr. Bikash Kumar 49

Contd…
• Planning and control in PPC must themselves be integrated
functions.
• It is insufficient to plan production if there is no control of the
factory resources to achieve the plan.
• It is ineffective to control production if there is no plan with
which to compare factory progress.
• Both planning and control must be accomplished, and they must
be coordinated with each other and with other functions
• Production planning consists of
1. Deciding which products to make, in what quantities, and
when they should be completed;
2. Scheduling the delivery and/or production of the parts and
products; and
3. Planning the manpower and equipment resources needed to
accomplish the production plan.
Dr. Bikash Kumar 50
Activities within the scope of production
planning
• Aggregate production planning. involves planning the
production output levels for major product lines produced
by the firm.
• Master production planning. The aggregate production plan
must be converted into a Master Production Schedule (MPS)
which is a specific plan of the quantities to be produced of
individual models within each product line.
• Material requirements planning (MRP). MRP is a planning
technique, usually implemented by computer, that
translates the MPS of end products into a detailed schedule
for the raw materials and parts used in those end products.
• Capacity planning. This is concerned with determining the
labor and equipment resources needed to achieve the
master schedule.
Dr. Bikash Kumar 51
Contd…

• Production planning activities divide into two stages:

1. Aggregate planning, which results in the MPS, and
2. Detailed planning, which includes MRP and capacity
planning.
• Aggregate planning involves planning six months or more
into the future
• Detailed planning is concerned with the shorter term (weeks
to months).

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Systems of production control

• Shop Floor Control compare the actual progress and status

of production orders in the factory with the production
plans (MPS and MRP schedule).
• Inventory Control includes a variety of techniques for
managing the inventory of a firm.
• Manufacturing Resource Planning Also known as MRP II,
manufacturing resource planning combines MRP and
capacity planning, as well as shop floor control and other
functions related to PPC.
• Enterprise Resource Planning Abbreviated ERP, this is an
extension of MRP II that includes all of the functions of the
organization, including those unrelated to manufacturing.
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Components of the production planning and
control system

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Activities in a modern PPC system

Activities in a production planning and

control system (shaded in the diagram)
and their relationships with other
functions in the firm and outside.

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Aggregate Production Planning
• Aggregate planning is a high-level corporate planning activity.
• The aggregate production plan indicates production output
levels for the major product lines of the company.
• The aggregate plan must be coordinated with the plans of the
sales and marketing departments.
• Because the aggregate production plan includes products that
are currently in production, it must also consider the present
and future inventory levels of those products and their
component parts.
• Because new products currently being developed will also be
included in the aggregate plan, the marketing plans and
promotions for current products and new products must be
reconciled against the total capacity resources available to the
company.
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Various inputs from different functional
components for aggregate planning

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Objectives considered by the aggregate planning
team
• Maximise profits and minimise costs: overall goal
• Maximise customer service: improving delivery time and
on-time delivery performance but additional workforce,
machine capacity and inventory levels.
• Minimise inventory
• Maximise utilisation of plant equipment
• Minimise changes in production environment: require a lot
of adjustments

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Master Production Schedule
• Anticipated build schedule for those items assigned to the
master schedule.
• Represents what the company plans to produce expressed
in specific configurations, quantities and dates.
• The production quantities of the major product lines listed
in the aggregate plan must be converted into a very
specific schedule of individual products, known as the
Master Production Schedule (MPS), or master schedule for
short.
• It is a list of the products to be manufactured, when they
should be completed and delivered, and in what quantities.
• A hypothetical MPS for a narrow product set is presented in
Figure
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Contd…

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Contd…

• Products included in the MPS divide into three categories:

1. Firm customer orders,
2. Forecasted demand, and
3. Spare parts

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Contd…
• Proportions in each category vary for different companies,
and in some cases one or more categories are omitted.
• In the case of customer orders for specific products, the
company is usually obligated to deliver the item by a
particular date that has been promised by the sales
department.
• In the second category, production output quantities are
based on statistical forecasting techniques applied to
previous demand patterns, estimates by the sales staff, and
other sources.
• The third category consists of repair parts that either will be
stocked in the company’s service department or sent
directly to the customer.

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Example

• Consider the inputs for an MPS as shown in Table. The

forecast for the first 5 plan periods is 5 units while for the
last 3 periods, is 21.

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Contd…

• To develop the preliminary MPS divide the total forecast

into equal amounts in the plan periods.
• Total demand = 88 units
• Production per plan period =Total forecast / Number of plan
periods = 88/8=11
• Fill the MPS column with 11 as shown in Table
Available = Inventory on hand + MPS – Forecast

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Contd…

However, in cases where the economic lot size exists for manufacture then the MPS will have
to be calculated differently. For example, if 30 is the economic lot size then the total
production is divided into 3 economic lots and then distributed as shown in Table

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Product Planning Horizon

The Product Planning Horizon shows the timing, lead times and
steps in the manufacturing process to assure that the end item is
manufactured correctly and on-time.

Fabrication Assembly
Lead Time
Procurement Sub-assembly
Lead Time Assembly
Fabrication Lead Time
Sub-assembly
Procurement
Lead Time

1 2 3 4 5 6 7 8 9 10

Cumulative Lead Time - the sum of the lead times that sequential
phases of a process require.
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Assembly Time Charts
Assembly Time Charts show the material order points needed to meet
scheduled availability of the end item
Procurement of
raw material D Fabrication
of part E
Procurement of Subassembly A
raw material F Final assembly
Procurement
of part C and inspection
Procurement of
part H
Procurement of Fabrication Subassembly B
raw material I of part G

1 2 3 4 5 6 7 8 9 10 11
Material D, F and I must be ordered at the beginning of week 2 to meet a
delivery at the beginning of week 12
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Material Requirements Planning (MRP)

• Computational technique that converts the master

schedule for end products into a detailed schedule for the
raw materials and components used.
• Identifies the quantities of each raw material and
component item.
• Also indicates when each item must be ordered and
delivered to meet the master schedule for final products.
• A method of inventory control
• An effective tool for minimizing unnecessary inventory
investment and a useful technique in production scheduling
and purchasing of materials.

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Contd…

• The distinction between independent demand and

dependent demand is important in MRP.

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Contd…

Independent Demand
A
Dependent Demand

B(4) C(2)

D(2) E(1) D(3) F(2)

Independent demand is uncertain

Dependent demand is certain
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Contd…

• Once the delivery schedule for end products is established,

the requirements for components and raw materials can be
directly calculated.

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Example

• For example, even though demand for a given model of

automobile each month can only be forecasted, once the
quantity is established and production is scheduled, it is
known that five tires will be needed to deliver the car (don’t
forget the spare).
• MRP is the appropriate technique for determining quantities
of dependent demand items.
• These items constitute the inventory of manufacturing: raw
materials, work-in-process (WIP), component parts, and
subassemblies.
• That is why MRP is such a powerful technique in the
planning and control of manufacturing inventories.
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MRP Inputs & Outputs
Changes
Master Order releases
Schedule Planned-order
schedules
Primary
reports
Bill of MRP System
Materials
Exception reports
Planning reports
Performance-
control
Inventory Inventory reports Secondary
File Transactions reports

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Structure of an material requirements planning
system

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Bill of Materials (BOM)

• The Bill of Materials (BOM) is a listing of all of the raw

materials, parts, subassemblies, and assemblies needed to
produce one unit of an end product.
• It is used to compute the raw material and component
requirements for end products listed in the master
schedule.
• The Bill of Materials File contains all Bill of Materials for
each end product the company produces.
• A Product Structure Tree - a visual depiction of the
requirements in a bill of materials, where all components
are listed by levels.

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Bill of Materials – Chair Example

Back Supports

Cross Bar
Side Rails

Seat
Legs
Cross Bar

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Product Structure Tree - Chair Example

Chair

Leg Assembly Seat Back Assembly

Legs (2) Cross Bar Side Rails (2) Cross Bar Back Supports (3)

Dr. Bikash Kumar 77

Product Structure Tree - Chair Example

Example 1: Use the information presented below to answer the

following? Determine the quantities of B, C, D, E and F to complete one
X. Determine the quantities of each of these components to produce
200 X’s.
Level
0 X

1 B(2) C
B-2 B - 400
C-1 C - 200
2 D(3) E D - 3x2 = 6 D - 1200 E(2) F(2)
E - 4x3x2+1x2+2 = 28 E - 5600

3 E(4)
F-2 F - 400

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Inventory record file
• Referred as the item master file in a computerized inventory system.
• The types of data contained in the inventory record are divided into
three segments:
1. Item master data. provides the item’s identification (part number)
and other data about the part such as order quantity and lead times.
2. Inventory status. gives a time-phased record of inventory status. In
MRP, it is important to know not only the current level of inventory,
but also any future changes that will occur against the inventory.
Therefore, the inventory status segment lists the gross requirements
for the item, scheduled receipts, on-hand status, and planned order
releases.
3. Subsidiary data. provides subsidiary data such as purchase orders,
scrap or rejects, and engineering changes.

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Contd…

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How MRP Works?

• The MRP processor operates on data contained in the MPS,

the BOM file, and the inventory record file.
• The master schedule specifies the period-by-period list of
final products required, the BOM defines what materials
and components are needed for each product, and the
inventory record file gives the current and future inventory
status of each product, component, and material.
• The MRP processor computes how many of each
component and raw material are needed each period by
“exploding” the end product requirements into successively
lower levels in the product structure.

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MRP Outputs

Outputs include Primary & Secondary Reports and Inventory

transactions.
Primary Reports
• Planned Orders - amount and timing of future orders
• Order Releases - authorizing the execution of planned orders
• Changes - to planned orders, including revisions of due dates
or order quantities and cancellations of orders
Secondary Reports
• Performance control reports - evaluate system operations
including deviations from plans and cost information
• Planning reports - data assessing future material requirements
• Exception reports - data on any major discrepancies

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MRP Benefits

1. Reduction in inventory,
2. Quicker response to changes in demand than is possible
with a manual requirements planning system,
3. Reduced setup and product changeover costs,
4. Better machine utilization,
5. Improved capacity to respond to changes in the master
schedule

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CAPACITY PLANNING

• Consists of determining what

labor and equipment
resources are required to
meet the current MPS as well
as long-term future
production needs of the firm.
• Also identifies the limitations
of the available production
resources to prevent the
planning of an unrealistic
Three stages of capacity planning: (1)
master schedule. resource requirements planning (RRP), (2)
• Accomplished in three stages rough-cut capacity planning (RCCP), and (3)
capacity requirements planning (CRP).

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Contd…

Develop a tentative Use MRP to

master production simulate material
schedule requirements

Convert material Revise tentative

requirements to master production
resource requirements schedule

No
Can
Is shop capacity be
capacity No changed to meet
adequate? requirements

Yes Yes

Firm up a portion Change

of the MPS capacity

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Contd…

• Possible capacity adjustments can be divided into short-

term adjustments and long-term adjustments.
• Capacity adjustments for the short term include the
following:
• Employment levels. can be increased or decreased
• Temporary workers
• Work shifts. can be increased or decreased.
• Labor hours.
• Subcontracting. This involves the letting of jobs to other
shops during busy periods, or the taking in of extra work
during slack periods.
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Contd…

• Capacity planning adjustments for the long term include

changes in production capacity that generally require long
lead times. These adjustments include the following actions:
• New equipment. This involves investing in more machines
or more productive machines to meet increased future
production requirements
• New plants. Building a new factory represents a major
investment for the company.
• Purchasing existing plants from other companies.
• Acquiring existing companies.
• Closing plants. that will not be needed in the future.
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SHOP FLOOR CONTROL

• Shop Floor Control (SFC) is the set of activities in production

control that are concerned with releasing production orders
to the factory, monitoring and controlling the progress of the
orders through the various work centers, and acquiring
current information on the status of the orders.
• A typical SFC system consists of three phases:
1. Order release,
2. Order scheduling, and
3. Order progress

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Three phases in a shop floor control system

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Order Release
• Provides the documentation needed to process a production
order through the factory.
• The collection of documents is sometimes called the shop
packet.
• It typically includes
1. The route sheet, which documents the process plan for the
item to be produced,
2. Material requisitions to draw the necessary raw materials
from inventory,
3. Job cards to report direct labor time devoted to the order and
to indicate progress of the order through the factory,
4. Move tickets to authorize the material handling personnel to
transport parts between work centers in the factory
5. The parts list, if required for assembly jobs.

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Contd…

• The order release phase is driven by two inputs, as indicated

in Figure

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Order Scheduling

• Follows directly from the order release phase and assigns

the production orders to the various work centers in the
plant.
• In effect, order scheduling executes the dispatching function
in PPC.
• The order scheduling phase prepares a dispatch list that
indicates which production orders should be accomplished
at the various work centers.
• It also provides information about relative priorities of the
different jobs, for example, by showing due dates for each
job.

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Contd…

• The order scheduling phase in shop floor control is intended

to solve two problems in production control:
1. Machine or shop loading: Allocating orders to work
centers
2. Job sequencing: involves determining the sequence in
which the jobs will be processed through a given work
center

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Contd…
• Some of the dispatching rules used to establish priorities for
production orders in the plant include:
✓ First-come-first served. Jobs are processed in the order in
which they arrive at the machine. One might argue that this
rule is the most fair.
✓ Earliest due date. Orders with earlier due dates are given
higher priorities.
✓ Shortest processing time. Orders with shorter processing times
are given higher priorities.
✓ Least slack time. Slack time is defined as the difference
between the time remaining until due date and the process
time remaining. Orders with the least slack in their schedule are
given higher priorities.
✓ Critical ratio. The critical ratio is defined as the ratio of the time
remaining until due date divided by the process time remaining.
Orders with the lowest critical ratio are given higher priorities.
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Order Progress
• Monitors the status of the various orders in the plant, work-
in-process, and other measures that indicate the progress of
production.
• The function of the order progress phase is to provide
information that is useful in managing the factory.
• The information presented to production management is
often summarized in the form of reports, such as the
following:
• Work order status reports. indicate the status of production
orders includes the current work center where each order is
located, processing hours remaining before completion of
each order, whether each job is on time or behind schedule,
and the priority level of each order.

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Contd…

• Progress reports. used to report performance of the shop

during a certain time period (e.g., a week or month in the
master schedule). It provides information on how many
orders were completed during the period, how many orders
should have been completed during the period but were
not, and so forth.
• Exception reports. An exception report identifies deviations
from the production schedule (e.g., overdue jobs) and
similar nonconformities.

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Factory Data Collection System

• The factory data collection system serves as an input to the

order progress phase in shop floor control
• It is also an input to priority control, which affects order
scheduling.
• Examples of the types of data on factory operations
collected by the FDC system include:
✓ Piece counts completed at each work center
✓ Scrapped parts and parts needing rework
✓ Operations completed in the routing sequence for each order
✓ Direct labor time expended on each order
✓ Machine downtime.

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Manufacturing Resource Planning (MRP II)

• Manufacturing resource planning evolved from material

requirements planning in the 1980s.
• It came to be abbreviated MRP II to distinguish it from the
original abbreviation and to indicate that it was second
generation, that is, more than just a material planning
system.
• Manufacturing Resource Planning (abbreviated as MRP II),
or closed-loop MRP, is an integrated production information
system that synchronises all aspects of the business.
• Thus, while planning for production, the total manufacturing
resources are taken into account.

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Contd…

• Manufacturing resource planning can be defined as a

computer-based system for planning, scheduling, and
controlling the materials, resources, and supporting
activities needed to meet the master production schedule.
• MRP II is a closed-loop system that integrates and
coordinates the major functions of the business involved in
production.
• This means that MRP II incorporates feedback of data on
various aspects of operating performance so that corrective
action can be taken in a timely manner

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Contd…

• This means that it involves the interconnected activities of

all the following:
✓ Business planning
✓ Production planning
✓ Capacity planning
✓ Master production scheduling
✓ Resource requirement planning
✓ Material requirement planning
✓ Capacity requirement planning
✓ Production activity control
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Contd…

• MRP II can be considered to consist of three major modules,

1. Material requirements planning, or MRP,
2. Capacity planning, and
3. Shop floor control

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Contd…
Master production
schedule
Business
Material requirements Feedback
Plan
planning

Marketing Financial Capacity requirements

Plan Plan planning

No
Feasible?
Production Yes
Plan
Purchase Work
orders orders

No Shop floor
Feasible? Inventory
control

Yes
Manufacture

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ENTERPRISE RESOURCE PLANNING (ERP)

• Enterprise resource planning (ERP) is a computer software

system that organizes and integrates all of the business
functions and associated data of an organization through a
single, central database.
• The functions include sales, marketing, purchasing, design,
production, distribution, finance, human resources, and
more.
• In the software of an ERP system, these business functions
are organized into modules, each focused on a different
function or group of functions within the organization.

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Contd…

• The modules are integrated through the ERP framework to

accomplish transactions that may affect several functional
areas.
• Figure shows how an ERP system might be organized into
software modules for a manufacturing firm.

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