Manufacturing planning and control approaches: market alignment and performance

Olhager, Jan; Selldin, Erik

doi:10.1080/00207540600635250

Cited by 42 publications

(43 citation statements)

References 25 publications

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“…The practical managerial implication is that markets with high-volume, standardised products, few variants, and short lead times should be planned and controlled by level, MTS, rate-based, and JIT/lean-type approaches, whereas markets with low-volume, highly customised products, wide product range, and long lead times should be planned and controlled using chase, MTO, time-phased, and MRP-type approaches. Olhager and Selldin (2007) tested this model empirically and found that the choice of approaches at the MPS and S&OP levels has a significant mediating role for operational performance. S&OP fundamentally concerns volume planning, while the MPS is concerned with product mix planning.…”

Section: Erp and Sales And Operations Planningmentioning

confidence: 99%

Evolution of operations planning and control: from production to supply chains

Olhager

2013

International Journal of Production Research

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The focus of operations planning and control for manufacturing firms has expanded successively over the last 50 years. New principles, techniques, and systems have emerged that have allowed for new approaches. The perspective for planning and control has expanded from internal production operations to supply chain operations linking suppliers, manufacturers, and customers. In this paper, we take a historical perspective identifying the key trends and focus shifts in the evolution of planning and control, from shop floor control through material requirements planning (MRP), master production scheduling (MPS), and sales and operations planning (S&OP) to supply chain planning (SCP).Keywords: manufacturing; master production scheduling; material requirements planning; operations management; production activity control; sales and operations planning; shop floor control; supply chain planning IntroductionManufacturing firms have always sought ways to improve their competitiveness. During the first half of the twentieth century, internal manufacturing efficiency on the shop floor was largely sufficient for successful operations. However with increasing competition, companies have been forced to find new ways to improve their operations and to look beyond the walls of the factory. Today, firms need to be competitive in many areas, such as quality, delivery, cost efficiency, and flexibility, and must therefore plan and control their operations accordingly. The planning and control task has become more complex -lead times are shorter, product life cycles are shorter, bottlenecks must be utilised more efficiently, etc.There are many contributing factors to the evolution of operations planning and control. Over the last 50 years we have witnessed how new concepts and approaches have emerged and been implemented in manufacturing firms, some more successfully than others. The developments in information and communication technologies (ICT) have facilitated the gradual improvement of computer-based systems for operations planning and control. Rondeau and Litteral (2001) and Jacobs and Weston (2007) provide historical perspectives focusing on the software systems for manufacturing planning and control, discussing reorder point (ROP) systems, material requirements planning (MRP) systems, manufacturing resource planning (MRP II) systems, and enterprise resource planning (ERP) systems. However, neither sales and operations planning (S&OP) nor supply chains are discussed in these two reviews. Here, we provide an updated and broader perspective on the evolution of operations planning and control.In this paper, we take a historical perspective and review the evolution of operations planning control over the last 50 years. This time period can be, in principle, divided into five decades with different characteristics. We first review each decade and then discuss the evolutionary pattern over the last 50 years with respect to planning and control focus, planning concepts, systems design, and improvement focus. In particular, we highlig...

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Section: Erp and Sales And Operations Planningmentioning

confidence: 99%

Evolution of operations planning and control: from production to supply chains

Olhager

2013

International Journal of Production Research

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“…S&OP is mainly located at tactical level in the hierarchy of planning. However, when this process deals with scenario management, risk assessment (Wallace & Stahl, 2008) or the expansion of capacity (Olhager, et al, 2001) (Olhager & Selldin, 2007) , it has extensions towards the strategic level (Olhager & Rudberg, 2002) (Wallace & Stahl, 2008) (Alexander, 2013).…”

Section: Definition and Scopementioning

confidence: 99%

A Framework for Sales and Operations Planning in Process Industries

Noroozi¹

2014

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This thesis studies Sales and Operations Planning (S&OP) in process industries. S&OP is a planning process which has a role of balancing demand and supply at an aggregate level. S&OP has traditionally been considered as a generic process meaning that it is independent from the context of the industry in which it is implemented. Process industries do; however, have specific characteristics which affect their planning and control processes, including S&OP. Therefore, the aim in this thesis is to reconcile these two contradictory stances and furthermore investigate how the specific properties in process industries should be included into an S&OP framework. Such a differentiated framework aims to support process industries to design/implement their S&OP process based on their unique requirements in relation to their markets, products and processes while it also takes into account the specific characteristics regarding the continuous production. Consequently, the process industries would realize the expected benefits from S&OP process to a greater extent.The study starts with a literature review on S&OP in process industries in order to build the knowledge foundation for subsequent studies. The results show that the underlying difference between process industries and discrete industries is the object continuity which affects the selection of production processes including resources. Thus, process industries are often hybrids in the sense that their production processes include both continuous production, when the transformed object (material) is continuous, and discrete production when the object (material) turns into discrete products after the discretization point. In other words, process industries deploy both continuous production and discrete production while discrete industries use only discrete production. The specific characteristics of process industries are actually related to the continuous production part and influence the planning processes as well. As the result of this study, the continuous production characteristics that can affect the S&OP process are identified.In the continuation of the thesis and in order to provide a typology for planning and control purposes, the object type (continuous and discrete) is combined with two other dimensions i.e. mode type (onetime, intermittent and continuous) and driver type (customer order driven and forecast driven) into a planning and control typology. The mode type addresses the repetitivity of the flow and the driver type takes into account the trigger of the flow. Each dimension has a transition point -i.e. the discretization point for the object type, mode interface point for the mode type and customer order decoupling point for the driver typeand represents a hybrid situation since different production environments are required before and after each transition point. The typology aims to illustrate how each dimension affects the planning and control issues as well as how the dimensions are interrelated and how this combination influence the manage...

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“…Grimson and Pyke (2007) offered a five-stage framework for helping improve the effectiveness of S&OP processes with close linkages to overall company strategy. Olhager and Selldin (2007) used a survey-based design to analyze the interrelationships between manufacturing planning and control approaches at different levels and operational performance given market requirements. According to Wallace (1999), S&OP focuses on aggregate volumes and product families.…”

Section: Strategic Direction and Production Planning And Control Systemsmentioning

confidence: 99%

Optimal product/customer mix selection as a strategic tool for cross-functional integration

Figueiredo

Mayerle

Donato

2011

JOSCM

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Cross-functional integration is a necessity as operations become ever more important for the formulation and implementation of overall company strategy. Despite the abundance of theoretical studies extolling the advisability of smooth intra-company interfacing, the operations strategy literature has not been as prolific regarding tools to increase this desired integration. This paper develops an uncomplicated multi-period analytical model that helps increase coordination of the engineering, purchasing, marketing, and sales areas among themselves and with manufacturing by focusing on the overall company objective of maximizing contribution to profits. The paper begins describing the theoretical underpinnings of production and operations processes as they relate to the strategy of the firm, presents the model, and then expands its scope to include interfaces with other functional areas of the firm. The methodology is based on a two-stage multi-period optimization model for aggregate production planning encompassing component supply management and final assembly. This methodology expands the concept of Sales and Operations Planning (S&OP) through a linear programming model that uses cost and profit contribution data to select the optimal product and customer mix. The sensitivity of results to costing and pricing data leads to increased cross-functional coordination. An illustrative application improving the medium-term operations strategy of a Brazilian OEM manufacturer is presented.

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Manufacturing planning and control approaches: market alignment and performance

Cited by 42 publications

References 25 publications

Evolution of operations planning and control: from production to supply chains

Evolution of operations planning and control: from production to supply chains

A Framework for Sales and Operations Planning in Process Industries

Optimal product/customer mix selection as a strategic tool for cross-functional integration

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