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ITLS5250 Chap.2 Manufacturing, Planning and Just-in-Time

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Chapter 2 of 5 · ITLS5250

Manufacturing, Planning and Just-in-Time

Manufacturing approaches differ by how much work occurs before a customer order, and production plans differ by horizon and aggregation. This chapter links aggregate planning, the master schedule, material requirements and daily control, then compares level, chase and hybrid capacity responses.

Its Just-in-Time section treats low inventory as the result of reliable processes, short setups and disciplined problem solving rather than as an isolated target.

In this chapter

What this chapter covers

  • 01

    Manufacturing approach continuum

  • 02

    Customer-order boundary

  • 03

    Aggregate production planning

  • 04

    Master scheduling and MRP

  • 05

    Level, chase and hybrid strategies

  • 06

    Functional coordination

  • 07

    Lean waste and flow

  • 08

    Just-in-Time prerequisites and risk

Worked example · free

Choose a capacity plan for a seasonal producer

Q [5 marks]. AskSia-authored practice. A furniture producer faces one predictable seasonal peak. Skilled-worker hiring is slow, finished products are inexpensive to store, and late delivery damages retailer relationships. Recommend a level, chase or hybrid plan. The study marks are not an official University mark allocation.
The arrows move from broad capacity commitments to finished-item timing, component requirements and daily control, so every lower plan must reconcile upward.The arrows move from broad capacity commitments to finished-item timing, component requirements and daily control, so every lower plan must reconcile upward. Aggregate plan: families, capacity, horizon Master schedule: finished items and timing MRP: components and releases Daily sequencing and control
The arrows move from broad capacity commitments to finished-item timing, component requirements and daily control, so every lower plan must reconcile upward.
  • 1Identify the binding constraint: skilled capacity cannot be added or removed quickly.
  • 1Recognise that low storage cost makes pre-building selected finished products feasible.
  • 1Protect the service promise because late delivery has a stated relationship cost.
  • 1Use a mainly level plan with inventory built before the peak and limited overtime for residual variation.
  • 1Monitor forecast error because excessive pre-building creates exposure if the peak is weaker than expected.
A hybrid dominated by level production fits the evidence. Stable skilled capacity produces ahead of the peak, inexpensive inventory absorbs much of the timing difference, and limited overtime handles uncertainty. Pure chase is impractical because labour is inflexible; a rigid level plan could overbuild if the seasonal forecast is wrong.
Sia tip — State which cost or constraint makes level, chase or hybrid preferable; do not choose from the demand shape alone.
Glossary

Key terms

Aggregate Plan
A medium-horizon balance of broad demand with workforce, output, inventory and backlog capacity.
Master Schedule
A time-phased statement of which finished items are planned and when they are required.
Material Requirements Planning
A system that translates finished-item plans into component quantities and planned release dates.
Level Production
A strategy that keeps output comparatively stable and absorbs demand variation through inventory or backlog.
Chase Production
A strategy that changes production capacity so output follows demand more closely.
Just-in-Time
A flow approach that provides items close to use while exposing waste, delay and process weakness.
FAQ

Manufacturing, Planning and Just-in-Time FAQ

How do manufacturing approaches differ?

They differ mainly in where the customer-order decoupling point sits. Make-to-stock completes more work before the order, assemble-to-order postpones configuration, and make-to-order or engineer-to-order postpones progressively more production and design.

What is the difference between aggregate planning and scheduling?

Aggregate planning balances product-family demand and capacity over a medium horizon. Scheduling works at a detailed operational level, assigning specific jobs to resources and time slots. The detailed plan must reconcile with the higher-level capacity commitment.

Why can promotions reduce profit?

A promotion may shift rather than create demand, especially through forward buying. If it lands in a peak period, overtime, backlog, shortage or displaced full-margin sales can exceed the extra contribution. Evaluate the combined functional result.

Does Just-in-Time mean removing every buffer?

No. Smaller buffers are sustainable when quality, setup time, demand visibility, supply reliability and problem solving can support them. Strategic inventory may remain justified at a critical node where disruption consequences are large.

How do I evaluate a level plan against a chase plan?

Compare workforce adjustment, overtime, inventory, backlog, lost service and capacity constraints across the planning horizon. Level output absorbs timing through stock or backlog, while chase output adjusts capacity. A hybrid is defensible when one resource stays stable and another handles the remaining variation.

Study strategy

Exam move

Practise the planning hierarchy as a downward explanation: aggregate plan, master schedule, material requirements and detailed control. For each manufacturing approach, mark which inventory exists before the order and what the customer must wait for afterward. On aggregate-planning scenarios, list seasonality, hiring and firing cost, overtime, storage, backlog and service constraints before choosing level, chase or hybrid.

For Just-in-Time, use a readiness checklist rather than repeating benefits. Name the waste being removed, the process condition required and the failure mode if that condition is missing. End each answer with a monitoring trigger such as supplier reliability, forecast deterioration or a shorter customer lead-time promise.

Practise translating one plan into the next: explain how a family-level capacity decision constrains finished-item timing, component releases and daily sequencing. Use promotion scenarios to distinguish extra demand from forward buying and to join sales revenue with overtime, inventory and lost-service effects.

For lean questions, write two columns headed process improvement and protection against variability; decide which buffer can shrink only after its underlying cause is controlled. A good final review alternates manufacturing-boundary questions with capacity-plan questions so similar words do not blur distinct decisions.

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