Manufacturing Process Industry

Planning typically is done in phases. Long-range aggregate supply demand balances are used to strategically determine the utilization of existing capacity and whether new capacity needs to be authorized. Once a year, capital plans are reviewed for new products and adjustments to capacity for existing products. The decisions made during this planning step provide the available capacity and the basic structure of the supply chain.

Operational planning is another name for scheduling. In the context of the previous planning steps, operational planning characterizes the conversion of a plan that can change, without penalty, to a schedule in which money will start to be spent.

Defining the planning constants was not very important prior to this step. However, the objective must stay in clear focus. That objective is a Quality schedule, so that everything comes together just at the right time. There is a real tradeoff between detail and accuracy. By definition, the more detailed, the less accurate. If a raw material needs to be ordered months ahead then the level of detail required may just be by week. All calculations could then be done on a weekly basis. The exact delivery date could be firmed up later. The point is to reserve a given quantity of material within a specific period. This is a good MRP application.

It wouldn't make sense to call a vendor up every week to change the exact date of delivery. Plus or minus a week doesn't matter to them more than one month ahead of time. Operational planning covers the range of commitments—where loose plans are com­municated to when specific schedules (to the day or even hour) are conveyed.

Thus far the role of scheduling has been defined. From some of this discussion there is a degree of inference made about its importance. Did you get it? MRP II will double-book the sched­ule. Some customers are not going to get what they wanted on time unless some push planning is applied. There is much more at stake. Push planning is only one aspect of scheduling.