Mr. Tim Loar Manager, Production Planning Ross Products Division of Abbott Laboratories
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1 Session 9 Master Production Scheduling http:// www.pom.edu/mpc/lectures_in_manufacturing_planning.htm lecture session 8 Mr. Tim Loar Manager, Production Planning Ross Products Division of Abbott Laboratories
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Session 9 Master Production Scheduling http://www.pom.edu/mpc/lectures_in_manufacturing_planning.htm lecture session 8. Mr. Tim Loar Manager, Production Planning Ross Products Division of Abbott Laboratories. Agenda. Ross/Abbott background Operations structure at Ross - PowerPoint PPT Presentation
Transcript of Mr. Tim Loar Manager, Production Planning Ross Products Division of Abbott Laboratories
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Session 9Master Production Schedulinghttp://www.pom.edu/mpc/lectures_in_manufacturing_planning.htm
lecture session 8
Mr. Tim LoarManager, Production Planning
Ross Products Division of Abbott Laboratories
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Agenda
• Ross/Abbott background
• Operations structure at Ross
• Production planning: theory
• Production drivers
• Production planning: reality
• Inventory Management
• Conclusion
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Ross Productions Division: Primary Focus
• Nutritionals– Infant formula– Adult nutritionals
• Pharmaceuticals– Growth area
• Feeding devices– Pumps and sets
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Ross Products Division: Manufacturing
• Five manufacturing plants– Produce 888 sku’s– 27 different mfg. lines
• Third party manufacturers– For expertise/capabilities don’t have in-house– Product 674 sku’s– 33 different mfg. lines
• 87% of Ross sales produced in Ross Plants
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Ross Products Division: Operations
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Ross Products Division: Production Planning
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Production Planning: Theory
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Production Planning: Theory
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Ross Products Division: Production Drivers
• Forecasting
• Customer service
• Inventory days-on-hand
• Plant SVP (stnd. value of production)
• Warehouse space
• Sales history
• Mfg. lead times
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Daily Case Shipments Report
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Aggregate Forecast Accuracy
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Forecast Accuracy – September, xxxx
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Production Planning: Reality
• Ongoing products– Compiling the “realistic” forecast
• Monthly meetings with Marketing• Sku by sku review• Agree to forecast for next 6-12 months• (2 financial plans look out further, up to 18 months)
Marketing forecast Forecast administrator Finance
Operations forecast
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Production Planning: Reality
• New products/Promotions– Strong reliance on Marketing/Sales
• No history for a forecast base• Consumer research
– Bi-weekly/monthly promotions meetings• Review planned promotions• Understand demand impact on promotion item and
cannibalization of other sku’s
Marketing forecast Forecast administrator Finance
Operations forecast
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Production Planning: Reality
• MPS generation: most trouble-free portion– Base Accounting system is 17 years old– MPS module is 10 years old
• Numerous limitations
• Driven by forecasts and target levels
Bill-of-Material Forecasting system
MPS
Production Plan by plant/TPM
Plan passed to plants
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Production Planning: Reality
• Tough decisions– Production trade-offs
• Limited capacity• Long commodity lead times• Management anxiety over backorders potential in
competitive environment• Overall game plan• High levels of MPS interaction/“what-ifs”
Reality…
Plant fills product
Product is incubated
Product is released
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MPS Planning Horizon Detail
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Production Planning: Reality
• Tough decisions– prioritization
• Which customer base has biggest impact• When to contact the customer• Which unaffected products can survive a period of neglect?
– Fallout• Daily attention to detail put on hold
Plant fills product
Product is incubated
Product is released
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Production Planning: Reality
• Developing recovery game plan– True RPD team effort
• Must be a team player• Supply chain perspective• What’s best for entire organization
…not Production Planning, not Purchasing, etc.
– MPS is the tool to facilitate trade-off decisions• Foundation for recovery projections
Plant fills product
Product is incubated
Product is released
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Production Planning: Reality
• Performance measures– Production to Schedule
• +/- 2% to frozen schedule• Reported monthly
– Batch Release Tracking• % of on-time releases• Reported monthly
– Batch Delivery Performance• Based on one week frozen schedule
Plant fills product
Product is incubated
Product is released
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Production Planning: Reality
• Very close interaction with MPS– Logistics manages inventory by DC/warehouse site– Logistics utilizes MPS to determine deployment plan
• For example, short supply out West:– Move product from the East (high trans. $’s)
– Evaluate MPS (& finite plant schedule) to determine next production run and product release timing
Product is deployed
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Production Planning: Reality
• Biggest daily impact on MPS management– Variance to forecasted sales– Pull production forward for oversells– Push production out for undersells
Orders Received
Sales results feedBack into MPS
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Inventory Management and MPS
• The focus is on DOH• Two budget processes per year
– MPS generates projected inventory value• Based on established target levels
– Forms basis for inventory investment accountability– MPS used to assure compliance with the inventory plan
Inventory Plan MPS
Production plan by plant/TPM
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Inventory Management and MPS (continued)
• MPS-related issues with inventory plan– Tendency is to want to keep lines running– MPS data allows for monitoring of adherence to plan– Production must move with sales to forecast
variances– MPS keeps planner appraised of variances to
inventory target levels based on sales results
Inventory Plan MPS
Production plan by plant/TPM
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Inventory Management Tools
• Data Warehouse– Comparisons of actuals vs. projections– Comparisons of current future projections to plan– Variance detail down to sku level– …or aggregated up for an entire line
Inventory Plan MPS
Production plan by plant/TPM
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DOH By Year (1989 – 2002 Plan)Ross Products Division
