WHO DRIVES THE COMPANY?

The time periods used are months and quarters, the monthly periods must go out as far as is needed by the master production schedule which would include the family groups cumulative lead time plus whatever batching periods are required for the parts within that family. From that point out the plan is then created in quarters and the horizon must continue to allow changes to the resources which are needed by the products included in the plan. 
 

This meeting is established to run the business, it is important that the right people are part of the team. It is the top decision maker and his first line plus the master scheduler. In a smaller company, it would be the MD and his team. The master scheduler is present as he is the link man between this plan and the master production schedule and he is often used to provide alternatives for the executive to discuss. The agenda of this meeting would be the key factors that affect the business and could include: the orders currently on hand; the current inventory levels for raw materials; work in progress and finished goods; a comparison between the actual and target levels. Verification by marketing/sales on the likelihood of their original forecast still being applicable. Is the MPS being shipped out on time, as if it is, then the customers are being kept happy. Is each department performing? Manufacturing should be measured against on time deliveries to schedule, marketing/sales against actual sales to forecast, etc. Are we meeting the service level we planned for? Is the new product launch going according to plan? 

It should be noted that this is only a typical agenda. Each company must establish what is important to their business. For this meeting to succeed is requires the "boss man" and his first line to sit down and agree on what is important within their company and to ensure that these requirements are being met. 

When first starting production planning, it is essential that the concepts for this meeting are thrashed out between the parties involved. The first item to agree on is the agenda and to get the different measurements resolved. Then the methods and policies to be used in running the meeting need to be established. It must be realised that this will become the key management meeting of the organisation, it becomes a report back meeting on what has happened, and an immediate planning meeting of what is to happen. When a company first starts production planning, many problems are experienced. Probably the most important one is that the MD and the management team don't really understand why all of a sudden this meeting is necessary. It must be realised that when you use an MRPII system you work with neat numbers, and the “slop” is taken out of the system. All the material that was there for just in case, is no longer there, so the business needs to be driven by realistic practical numbers which need to be reviewed on a monthly basis. 

It is the MD's job to ensure that this meeting is recognised as the meeting for running the business, therefore absenteeism is not accepted .

As can be seen, this concept of sales and operations planning puts the control of the business back into the hands of the company management. It is they that must make the decisions on which all further calculations are made. It is this plan which the master scheduler uses to create that detailed plan for manufacturing. This means that everybody else in the company and all the calculations made are based on the master production schedule which has been created to meet the demands of the production plan. This way the whole business is coordinated to meet the company's objectives. 

It is interesting to note that some companies do not do production planning on their main MRPII system, but handle it outside of the system on a P.C. Graphics can be used to present the results and there is generally standard software currently available to meet this need. In summary, if you want your MRPII system to give the return and benefits that were identified when you justified your system, then Sales and Operations Planning is the element which could well be missing. It is this approach which is essential if you want to reach "A" class status.