Over the last 40 years, the role of computers in the production planning process has changed dramatically. In the 1970's, a calculator was considered a high-priced luxury item, and business mainframe programs were stored on cards. Today, every production planner has a personal computer with more processing capability than the mainframes of the past. Advances in computer hardware and software have enabled production planning processes to operate more efficiently and effectively than ever before.
Enterprise Resource Planning (ERP)
In the 1990's, ERP (enterprise resource planning) systems gained in popularity. ERP systems, such as SAP and Oracle, provided a "massive software achitecture" to support key business functions such as finance, accounting, materials management and production control. Specific to production control, users now have the ability to access all their key data within a single source. Inventory, forecast, customer orders, bills of materials, manufacturing routers, planning parameters and mrp output all reside within the ERP system and are readily accessible to production planners.
Automation of Repetitive Processes
ERP software, combined with increased hardware processing speeds have enabled companies to automate repetitive processes. Where 20 years ago employees had to manually calculate production requirements for each item to determine what to produce, computer software now nets forecast and orders against inventory and schedules to project future inventory balances. Calculating how much stock is "available to promise" is now instantly updated as each sales order is processed. MRP (material requirement planning) processes explode bills of materials against production plans to determine what raw materials must be purchased to support the production schedule. In the past, these calculations were performed manually. Today, computers have reduced processing time, allowing production planners to focus on data analysis rather than data collection.
Along with automating repetitive processes and calculations, computers generate recommended schedules and purchases to planners. The key output of an MRP system is a set of planned orders. Planned orders are calculated within the production and inventory parameters maintained by the planner and represent a view of what items and quantities need to be produced or purchased to fulfill demand. Utilizing system-generated planned orders allows a planner to quickly and easily identify what is needed and also allows the planner to manage a larger number of products than if the planning process were peformed manually. Another tool used by production planning to recommend solutions is advanced planning and scheduling (APS). APS software works to optimize schedules within capacity constraints. Optimization logic can focus on order fulfillment, inventory investment, production cost control or any combination of the three. The complex Monte Carlo simulation logic used in most APS software would be nearly imposisble for users to re-create manually.
Another important aspect of MRP and APS software is the provision of exception-based planning. For example, a company that offers more than 5,000 products to its customer base has requirements for a fraction of those products at any given time. For a planner to review all 5,000 products daily would be nearly impossible. If a planner spends only five seconds on each item, it would take seven hours to review all 5,000 products. Exception-based planning tools, such as MRP and APS, allow production planners to review only the items where action is needed, while ignoring the items with no requirements.
- "Production and Inventory Management"; Donald Fogarty, CFPIM, John Blackstone Jr, CFPIM, Thomas Hoffmann, CFPIM; 1991
- Topbits.com; "ERP"
- DemandSolutions.com; "Advanced Planning and Scheduling"
- Photo Credit Ryan McVay/Photodisc/Getty Images
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