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Manufactur ing ty po logies 

Project

manufacturing

Variety /

Complexity

Volume

Lot / Batch /

Intermittent

manufacturing

Line /

Repetitive

manufacturing

Continuous

process

The choice of the manufacturing system

depends on various circumstances but it

must meet two objectives :

• Come up to customers’ satisfaction

• Be cost effective

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Character ist ics o f Interm ittent manufactu r ing 

Project

manufacturing

Variety /

Complexity

Volume

Lot / Batch /

Intermittent

manufacturing

Line /

Repetitive

manufacturing

Continuous

process

• Long manufacturing lead time

• Large work-in-progress

• Discontinuous flow of materials

• General purpose machines

• Process layout

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Whatever the manufacturing typology, companies have to

implement a manufacturing planning and control system. Its

purpose is to respond to customers’ requirements by

managing efficiently the flow of material, the utilisation of

people and equipment, and by managing the performance ofthe suppliers

 A good planning and control system must answer four basic

questions: what are we going to make ? What does it take to

make it ? What do we already have ? What must we get andwhen ?

This fully integrated planning and control system is called

Manufacturing Resources Planning (MRP2)

Manufactur ing Planning & Control System 

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MRP2 is a Manufacturing Planning and Control System

concerned with planning and controlling all aspects of

manufacturing, including managing materials, scheduling

machines and people, and coordinating suppliers and key

customers MRP2 objective is to balance demand with supply

Demand refers to the products that the organization is being

asked to provide, expressed in customer orders, sales

forecasts, distribution center replenishment, interplanttransfer 

Supply refers to the resources available to meet that

demand: materials, manpower, machinery, suppliers and

their capacity, testing, storage space, money

Manu factur ing Resou rces Planning (MRP2) 

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Manu factur ing Resou rces Planning (MRP2) 

• Contract between manufacturing andsales

• List of all demands for end items andspare parts

• It represents what the company plans toproduce expressed in specificconfigurations, quantities, and dates

• Stabilize manufacturing• Express the Strategic Business Plan for

manufacturing• Plan sales by families• Define inventory level and customer

service level

• Schedule the load by operation• Smooth the workload• Evaluate the effectiveness of

production operations

• It makes recommendations to releasereplenishment orders for material

• Compare needs to available resources• Propose a time-phased planning• Plan priorities

• Express the company policy• Define market share by families of

products• Identify new technologies•  All company’s departments are

concerned

5 years and more

1 year and more

Minimum : Supply +Manufacturing Lead

Times

Bill of materialexplosion from MasterProduction Schedule

1 day to 1 week 

Yearly

Monthly

Weekly

UPDATEHORIZONOBJECTIVES AND

CONTENTSSEQUENCE

STRATEGIC

BUSINESS PLAN

SALES AND

OPERATIONS

PLANNING

MASTER

PRODUCTION

SCHEDULE

MATERIAL

REQUIREMENT

PLANNING

PRODUCTION

ACTIVITY

CONTROL

Weekly  – Daily

Daily  – Hourly

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Manu factur ing Resou rces Planning (MRP2) 

Demand

Management

Capacity RequirementPlanning

Resource

(Requirement) PlanningSales & Operations

Planning

Master Production

Schedule

Production Activity

ControlPurchasing

Material RequirementPlanning

Strategic Business

Plan

Input/Output control &

Operations sequencing

Rough Cut Capacity

Planning

Check feasibility through

resources availability

check

Check feasibility through

resources availability

check

Check feasibility through

resources availability

check

Control, monitor and report

SBP drives

S&OP

S&OP constrains SBP

when inconsistencies

S&OP drives

MPS

MPS constrains S&OP

when inconsistencies

MPS drives

MRP

MRP constrains MPS

when inconsistencies

Step by step

planning

Step by step

capacity check 

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 At each level, there are three questions: What are the priorities?

What capacity is available?

How can differences be resolved?

These are questions for reconciling demand with supply:

MRP2 is a way to ensure the organization will always be

able to deliver to its commitments and will not commit if it is

not capable

Manu factur ing Resou rces Planning (MRP2) 

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Master Plann ing Scope 

Master Planning encompasses: Demand management

Sales and Operations Planning and Resource Requirement Planning

Master Production Scheduling and Rough Cut Capacity Planning

Demand

management

Capacity Requirement

Planning

Resource

(Requirement) PlanningSales & Operations

Planning

Master ProductionSchedule

Production Activity

ControlPurchasing

Material Requirement

Planning

Strategic BusinessPlan

Input/Output control &

Operations sequencing

Rough Cut CapacityPlanning

Master Planning scope

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Master Plann ing object ives 

Purposes of Master Planning are:

To ensure integration and implementation of the

business, sales, marketing, engineering, finance and

manufacturing plans

To manage inventory and backlog to a position desired bythe company’s executive team

To commit to products’ deliveries and feel confident about

the ability to fulfil these commitments

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Demand management 

Demand management is the function of recognizing and

managing all forms of demand

Demand management is a gateway module in

manufacturing planning and control, providing the link to themarketplace, sister plants, warehouses, and other sources of

demand (service parts, intra-company demand,…)

Marketplace(customers and other

demand sources)

Demand

management 

Sales and

Operations

Planning 

Resource

Planning

Rough-Cut

Capacity

Planning 

Master

Production

Scheduling 

Manufacturing Planning

and Control boundary

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Sales & Operat ions Plann ing and Resou rces

Requ irement Plann ing 

Sales and Operations Planning is the process for

determining levels of production based on product groups.

The objective is to develop a plan which integrates the

various functional planning efforts in a company.

The sales and operations plan links strategic goals to

production and coordinates marketing plan, financial plan,

operations plan and human resources plan

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Sales & Operat ions Plann ing and Resou rces

Requ irement Plann ing 

Resources Requirement Planning encompasses long-range

planning of facilities. Involved is the translation of extended

operations plans into capacity requirements, usually on a

gross or aggregate basis

The need is to plan capacity that requires top management

approval. The horizon must be as long as it takes to make

major changes such as invest in new machines, anticipatepeople take on,…

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Example of S&O meet ing too l 

Products family   Inventorytarget

Month J A S O N D J F M A M J J A S O N D J F M A M J J A S

Sales Plan

Planned

Actual

Difference

Production Plan

Planned

Actual

Difference

Inventory

Planned

Actual

Difference

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Inputs to Master Schedul ing Process 

Production Plan

Forecasts

Orders from customers

 Additional independent demand (eg: spare parts) Inventory levels

Capacity constraints

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Rough Cut Capaci ty Plann ing 

Rough Cut Capacity Planning checks whether critical

resources are available to support the Master Schedule

Critical resources are not only machines or direct labor.They can also be:

Process engineering skills

People and specific control devices involved in First

 Article Inspection process Quality organization involved in accepting non-conform

items by concessions

Suppliers that have a specific know-how