Planning of manufacturing includes the planning of
purchasing, receiving, cost estimating, forecasting, and labor requirements in
accordance with the production schedule. It also includes planning for the
production capacity to meet the required schedule.
Within the IPPD approach to integrated product
development, manufacturing planning begins during the preliminary design phase
with a twofold purpose. First, as design tradeoffs are made, early manufacturing
planning can assist in identifying the design concepts that can most readily and
economically meet the desired production schedule. Secondly, as the design
matures, manufacturing planning can assist in identifying long-lead production
needs and material requirements.
Manufacturing planning tools range from very simple
spreadsheets to more sophisticated tools such as Material Requirements Planning
(MRP), Manufacturing Resource Planning (MRP II), and Enterprise Resource
Planning (ERP). Depending on their scope and complexity, such tools can provide
assistance in planning anything from the requirements to support the workload of
a portion of a manufacturing cell in a production facility to planning the
resource requirements of the entire enterprise. Spreadsheet approaches can be
developed in-house or purchased as packages from a number of vendors. MRP, MRP
II, and ERP are more sophisticated tools for which brief descriptions are
presented in the following paragraphs.
MRP is used to determine the material requirements based
on the production schedule and the specific bills of materials for the products.
This technique is focused on the planning of materials needed to support
production based on production quantities. It was developed as an approach to
assist in the management of production and a method for determining appropriate
inventory levels and controlling that inventory. MRP can be used to develop
plans for ordering parts and material based on a company's current production
requirements and for developing the forecasted demand for a product under
development. By using MRP to determine and maintain inventory levels necessary
to meet the current demand for a product, insufficient or surplus inventory
levels can be avoided and reduced costs can be achieved.
MRP II is an extension of MRP that combines inventory
control with production control. It provides a tool for manufacturing planning
that begins to tie together many of the elements of the entire enterprise.
However, unlike ERP which is described below, MRP II is not one integrated
planning system for the enterprise. Rather, it is focused on manufacturing and
requires that all the business planning of the enterprise be based on the same
production forecasts. MRP II addresses the material, physical and labor
requirements to support the production schedule. It expands upon MRP by
integrating other business functions within a company, including sales,
marketing, financial planning, engineering and purchasing, with the
manufacturing planning process. Use of this tool ensures that all business units
involved in the manufacturing process are kept abreast of current production
requirements, purchase plans, and customer demand. MRP II can also include
simulation tools that provide the capability to conduct "what if" scenarios
related to manufacturing planning. The information output from MRP II systems
may be combined with other financial planning tools within an organization for
decision-making and strategic planning purposes.
ERP encompasses all the planning of the enterprise
associated with a product, a series of products, or all products. In addition to
those items covered in MRP II, ERP extends planning to all the other areas of
the enterprise. This tool provides the capability to connect all business units
within a company to a single computer system as a means of improving the
communication and exchange of information. As companies become more global and
decentralized, the need exists to develop individual manufacturing plans for
multiple sites. ERP provides a means for distribution resource planning, which
means determining when and at what location within the enterprise inventory
levels should be increased or put on-hold due to changes in demand. This
information can then be instantly communicated throughout the company. ERP
accomplishes these objectives by providing a single tool that integrates all
functions and resources within a company to merge business planning activities
and objectives with its operational and manufacturing processes.
Manufacturing planning tools such as these can be used to
improve the manufacturing planning process and overall strategic planning within
an organization. Some of the benefits to be gained from adopting such tools and
techniques include reduced costs, improved responsiveness to customers' needs
and to market changes, and an improved product development process.
Boothe, R.S., Haynes, P. J., & Helms, M. M. (1991, Autumn). Rethinking the Manufacturing Focus:
An Overlooked Strategic Tool. SAM Advanced Management Journal.
Brooks, R. B. (1987). Integrating JIT and MRP II. International American Production and Inventory Control Society (APICS) Conference.
Forger, G. (1997, March). Take Control of Your Shop Floor with Manufacturing Execution Systems. Modern Materials Handling.
Giebels, M. M. T., Kals, H. J. J., & Zijm, W. H. M. (1998). Concurrent Manufacturing Planning
and Control. Manufacturing Systems. Ljubljana: Faculty Press International.
Kessler, J. (1991, March). MRP II: In the Midst of a Continuing Evolution. Industrial Engineering.
Orlicky, J. (1975). Material Requirements Planning. New York: McGraw-Hill.
Smith, J. J. (1994). Theory of Constraints and MRP II: From Theory to Results. Illinois: Bradley University.