Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

5.7.4 Scenario: Master Planning Case —  Introduction and Sales Plan

Intended learning outcomes: Present the case study — company and products, as well as the sales plan.

On the basis of a long-term sales plan of a company in the wood industry, your task — with regard to resource management — will be to work out various variants of the production plan and inventory plan as well as the resulting procurement plan.

The case: The Planing Co. manufactures wood paneling in many different variants. Variants occur, of course, in the dimensions, but also in the profiled edges and the wood finishes. The company offers panels in both natural wood and in painted finishes. The Planing Co. has only one timber supplier, Forest Clear Co. in Finland.

As manager of the Planing Co., you are faced with the task of producing a master schedule for one year in preparation for a management meeting tomorrow morning. You are expected to provide information on capacity load and, in addition, on the quantities of raw material to be procured from your timber supplier.

Your job is to do the planning only for the four most important final products in Planing Co.’s varied product assortment. These four products are shown in Figure below and fall into two product segments: painted finish panels (panel “tradition”) or natural wood panels (bio panel).

Fig.        Final products requiring master planning.

These panels, already precut to size, are planed down to specific profiled panels at a number of processing centers. As Figure shows, during the planing process there is a material loss of 3 mm to the width and of 2 mm to the height of a precut panel.

Fig.        Profiled edge of a finished panel.

The Planing Co. has machines to plane down the precut panels to specific profiled panels for a total of 2.7 million square meters of precut panels per year. The capacity unit, which comprises several machines, is given as square meters of material to be planed. You can assume that the same amount of material is processed every month.

You will base your master planning on available data in the cumulative sales plan for the next 12 months (see Figure

Fig.        Sales plan for the next 12 months.

Continuation in next subsection (5.7.4b).

Course section 5.7: Subsections and their intended learning outcomes

  • 5.7 Scenarios and Exercises

    Intended learning outcomes: Disclose master scheduling for product variants. Calculate the quantity available-to-promise (ATP). Examine an example of the theory of constraints. Elaborate the master planning case.

  • 5.7.1 Exercise: Master Scheduling and Product Variants

    Intended learning outcomes: Determine the degree of overplanning of the number of variants in in the master production schedule (MPS).

  • 5.7.2 Exercise: Available-to-Promise (ATP)

    Intended learning outcomes: Calculate the quantity available-to-promise (ATP), whereupon the master production schedule as well as a list of customers’ orders that have already been promised are given.

  • 5.7.3 Exercise: Theory of Constraints

    Intended learning outcomes: Explain an example of the theory of constraints, whereupon you produce two products, which use the machine capacity of three machines with a certain load. Identify and speed up the bottleneck.