CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 1. Production, Planning and Control (PPC) Systems. This module covers: • An introduction to Production, Planning and Control. • Guidelines on Sales and Operations Planning (S&OP) and Aggregate Planning. • Definition of Demand Management and three types of demand forecast techniques. • How Master Production Scheduling (MPS) is tracked and measured. • An introduction in using the Materials Requirements Planning (MRP) to identify resource risks and mitigate impact on deliverables. 2. The video you are about to see is a narrative by Manufacturing Branch Chief of DCMA Quality Assurance, Mr. Jackson, discussing what Phase 1 of the course means for the students. 1 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 3. Module 2’s Terminal Learning Objective Module 2 contains 5 lessons: • Lesson 1: Introduction to Production, Planning, and Control (PPC) • Lesson 2: Sales and Operations Planning (S&OP) and Aggregate Planning • Lesson 3: Demand Management • Lesson 4: Master Production Scheduling (MPS) • Lesson 5: Introduction to Materials Requirements Planning (MRP) 4. Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems. 5. Lesson objectives. Upon completion of this lesson, you should be able to: • Contrast the role of PPC systems across strategic, tactical, and operational timeframes. • Describe PPC processes and activities across strategic, tactical, and operational timeframes. • Differentiate between the different levels of a PPC System. • Categorize typical PPC responses to changes in technology, products, processes, or strategy for a given scenario. 2 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 6. Lesson topics: This lesson will cover the following topics: • The PPC System • PPC System Framework • PPC Classification System • PPC Response to Change 7. Understanding the PPC processes empowers you to evaluate how effectively a company is implementing these practices. Consequently, you will be able to consider the use of PPC processes when determining the likelihood of the company fulfilling its contracts. 8. How does Production, Planning, and Control (PPC) help a manufacturing organization successfully fulfill its contracts? . 9. Topic 1: The PPC System 3 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 10. Major components of a PPC system framework. The PPC System is made up of the front end, the engine, and the back end. 11. Production Planning and Control (PPC) System. The PPC system is a methodology designed to manage the flow of materials, the utilization of people and equipment (i.e., capacity), and to coordinate suppliers and customers (i.e., supply chain). It also assists with routings, dispatching, and planning. The PPC system provides information to help businesses match supply needs with demand Input. 4 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 12. The role of PPC in the context of strategic planning: PPC system provides information on: • Capacity needed to meet future market demands; this includes: o Machines, equipment, and facilities o Human-resource size and capabilities o Technology o Geographic locations • Long lead times required to secure capacity, raw materials, and other resources. RELATE the role of PPC in the context of strategic planning to the case study. REFERENCE the Toyota: Demand Chain Management case study introduction (pages 1- 2) and the Overseas Planning Cycle (pages 7- 8). 5 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 13. The role of PPC in the context of tactical planning: The PPC system matches supply and demand regarding product mix and volume. • Helps in planning appropriate logistical solutions. • Provides customer facing employees with information on correct product quantities and location to meet market needs. • Aids in planning capacity to determine employment levels, budgets, overtime, subcontracting needs, etc. RELATE the role of PPC in the context of tactical planning to the case study. REFERENCE the Toyota: Demand Chain Management case study’s Domestic Distribution section (pages 2-5) and the Overseas Planning Cycle (pages 7-8). 14. The role of PPC in the context of operational planning: PPC system provides a detailed schedule of resources to meet customer requirements. • Schedules time, people, material, equipment and facilities. • Ensures personnel are properly tasked. • Tracks use of resources and results of execution through the use of appropriate metrics. • Supports problem-solving. 6 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 15. File: CME130_M2_L1_E1_Exercise_FINAL.docx 16. Example for exercise. 17. Instructions 18. Topic 2: PPC System Framework 7 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 19. The four components of the front end of a PPC framework: Front end pieces are considered customer facing. They examine sales and marketing data, information from manufacturing concerning what available capacity is available to handle more customer orders, and how the manufacturing area is being loaded over the time horizon being considered so that marketing and sales don’t over sell the business’ capabilities to meet customer demand. The decisions made in the front end must align with the business’ overall strategy and goals when taking advantage of new or emerging opportunities. Input is received from: • Resource Planning • Sales and Operations Planning • Demand Management During the Front End S&OP process, an aggregate plan is created to cover the time horizon of interest. This plan presents information in product families – it is very high level. Output from the PPC process: The transition document between the Front End and the Engine is the Master Production Schedule (MPS). This document provides the master schedulers with detailed end item information on the anticipated build schedule based on the aggregate plan created during the S&OP session. • 8 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 20. The role of Demand Management: Coordinates marketing and sales activities that place demand on manufacturing capacity and processes. Encompasses: • Forecasting customer end-item demand • Coordinating marketing initiatives and activity • Aligning sales activity • Order promising • Accommodating interplant and intercompany demand • Spare-parts requirements RELATE the role of demand management to the case study. REFERENCE the Toyota: Demand Chain Management case study’s Overseas Planning Cycle section (pages 7-10). 21. The role of Resource Planning. Provides a “10,000 foot” view in determining capacity necessary to produce products for the period being reviewed • Strategic: brick and mortar facility requirements, virtual requirements • Tactical: addition and/or disposal of machines and equipment • Operational: labor and machine hours 9 Defense Acquisition University Student Guide CME130 Surveillance Implications of Manufacturing and Subcontractor Management Module 2 Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Lesson 1: Introduction to Production, Planning, and Control (PPC) Systems Content Student Notes 22. The role of Sales and Operations Planning (S&OP):S&OP is a decision-making process where executive level management regularly meets and reviews projections for demand, supply and the resulting financial impact. Decisions are made in alignment with corporate goals