Intended learning outcomes: Present the concept for planning & control. Explain different concepts of planning & control in dependency upon the features facility layout and product variety concept.
A concept for planning & control is made up of particular types of business processes and business methods for order planning and fulfillment.
Recent decades saw the development of different concepts of planning & control in supply chains. Each was developed in a particular area and so represents to a certain degree a model for a branch of industry. Some of the concepts arose in powerful industries, such as the automobile or machine industry. The concepts were systemized and given brand names.
- The MRP II concept (manufacturing resource planning) [note 412] originated in North America in the late 1960s. See [Wigh95] and [VoBe18]. MRP II was developed in branches of industry having clearly convergent product structures, such as for the construction of big machines and in the automobile and aircraft industries. Three temporal ranges of planning & control (short, medium, and long range) were basic to the MRP II concept that quite early on went beyond matters of production. Further development of the concept led to the ERP (enterprise resources planning) concept in order to include all areas of a company. See Chapter 5.
- The Japanese just-in-time concept, today also known as lean/JIT (lean production), aimed at improving the flow of goods. Marketed in the late 1970s as a contrasting alternative to the MRP II concept, the lean/JIT concept has also turned out to be
generally valid and fundamental to planning & control in ERP when delivery becomes a targeted company priority. The Kanban technique, often linked with lean/JIT, however, is applicable — along with other simple techniques for repetitive manufacturing — only to standard products or product families with very few variants. The lean/JIT concept and all these techniques form an important extension to the MRP II concept and its techniques. See Chapter 6.
The details of resource management developed by the MRP II / ERP concept remain fundamentally valid in the extended concepts below. These extensions differ from the MRP II / ERP concept mainly in the modeling of logistics business objects and, accordingly, in order configuration, order processing, and order coordination in all temporal ranges of planning.
- The variant-oriented concept originated particularly in Europe in the late 1970s. It was developed in connection with the product variety concept of product family, with one-of-a-kind production and production without order repetition. It is a necessary extension of previous concepts. See Chapter 7. Depending on the product variety concept, different characteristics of planning & control arise often and typically together. See here also Figure 4.4.5.2.
- In the late 1980s, the processor-oriented concept was developed in North America for process industries. This concept extended MRP II, but it has not yet found complete systematization. It comes with the term process flow scheduling. Besides techniques for continuous production and campaign concepts (to handle high setup costs), the processor-oriented concept considers divergent product structures, a phenomenon that was not covered adequately by earlier concepts. See Chapter 8.
Figure 4.5.3.1 summarizes the different concepts. It is interesting to see that they, again, can be shown in dependency upon the two characteristic features of planning & control in supply chains that were already showcased in Figure 4.5.1.1, that is, facility layout and product variety concept. The colored areas indicate the areas of application of the underlying basic MRP II concept and the extended concepts mentioned above.
Fig. 4.5.3.1 Different concepts of planning & control in dependency upon the features facility layout and product variety concept.
A rough-cut comparison of Figure 4.5.3.1 with Figure 4.5.1.1 shows that the different concepts for planning & control — in a first approximation — can be applied to the production types in the following way:
- The MRP II / ERP concepts are well suited to batch production for all facility layouts with the exception of continuous production.
- The lean/JIT concept applies to nearly all production types. It is a prerequisite for mass customization and repetitive manufacturing. However, the Kanban technique and other simple techniques for repetitive manufacturing often linked with Lean/JIT are applicable only to standard products or product families with few variants.
- The variant-oriented concept applies to batch production and all facility layouts designed for single items or small batches. It is a prerequisite for one-of-a-kind production and mass customization.
- The processor-oriented concept applies to continuous or (discontinuous) high-volume line production, in particular to mass production.
By the way: The process categories in the SCOR model are differentiated according to the production environment (refer to Figure 1.1.8.3 and to the definitions in Section 4.4.3). According to Figure 4.4.5.2, there is a close correlation between the two features production environment and product variety concept. Therefore, the same characteristic feature that now allows differentiation among the various concepts of planning & control already differentiates process categories of the SCOR model.
Course section 4.5: Subsections and their intended learning outcomes
4.5 Branches, Production Types, and Concepts for Planning & Control
Intended learning outcomes: Describe branches of industry in dependency upon two characteristic features, "volume versus variety". Explain in detail production types and concepts for planning & control. Disclose selecting an appropriate branch model, production type, and concept for planning & control.
4.5.1 Branches of Industry in Dependency upon Characteristic Features
Intended learning outcomes: Produce an overview on branches of industry. Explain different branches in dependency upon the two features facility layout and product variety concept.
4.5.2 Production Types
Intended learning outcomes: Produce an overview on production types. Explain the different kinds of facility layouts seen — from a systems capabilities viewpoint — as production types together with other production types.
4.5.3 Concepts for Planning & Control
Intended learning outcomes: Present the concept for planning & control. Explain different concepts of planning & control in dependency upon the features facility layout and product variety concept.
4.5.4 Selecting an Appropriate Branch Model, Production Type, and Concept for Planning & Control
Intended learning outcomes: Identify the concept of branch model in logistics and operations management. Explain why it is not possible to identify a branch model simply with a specific production type and a specific concept of planning & control.
