Aggregate Planning and JIT - Week 5

planning horizons

operational, tactical, strategic

operational decisions (up to3 months)

short-range plans: job assignments, ordering, job scheduling, dispatching

tactical decisions (up to 2 years)

intermediate-range plans: sales planning, production planning and budgeting, setting employment, subcontracting levels

strategic decisions (up to 5 years)

long-range plans: R&D, new product plans, capital expenses, facility location

Aggregate planning Goals

meet demand, use capacity efficiently, minimise cost, meet inventory policy

AP strategies

change capacity - inventory levels, varying work force, subcontracting, using part-time workers; change demand - influencing demand, backordering during high demand periods; Mixed strategy

Just-in-Time

supplies end components are pulled through the system to arrive where and when are needed; attacks waste; exposes problems and bottlenecks; Lean production is its western implementation

7 wastes of JIT

overproducing, waiting, transportation, inefficient processing, inventory, unnecessary motion, product defects

push system (MRP)

material is pushed into downstream workstations, regardless of whether resources are available; make-to-stock

pull system (JIT)

material is pulled to a workstation just as it is need; make-to-order

Results of JIT

queue and delay reduction: speeds throughput, frees assets; quality improvement, cost reductions, rework reduction, variability reductions in the workplace