CHAPTER 15
Resource Planning
Lecture Outline
• Material Requirements Planning (MRP)
• Capacity Requirements Planning (CRP)
• Enterprise Resource Planning (ERP)
• Customer Relationship Management (CRM)
• Supply Chain Management (SCM)
• Product Lifecycle Management (PLM)
Dr. Loomba
Class Notes
Chapter 15
15-1
Resource
Planning
for
Manufacturing
Material Requirements Planning (MRP)
• Computerized inventory control and production
planning system
• When to use MRP?
• Dependent demand items
• Discrete demand items
• Complex products
• Job shop production
• Assemble-to-order environments
Dr. Loomba
Class Notes
Chapter 15
15-2
Demand Characteristics
Independent demand
Dependent demand
100 x 1 =
100 tabletops
100 x 4 = 400 table legs
100 tables
Continuous demand
Discrete demand
400 –
300 –
No. of tables
No. of tabless
400 –
200 –
100 –
1
2
3
Week
4
300 –
200 –
100 –
5
M T W Th F
M T W Th F
Dependent vs. Independent Demand
Item
Demand
Source
Material
Type
Method of
E ti ti
Estimating
Demand
Planning
Method
Dr. Loomba
Materials With
Materials With
Independent Demand Dependent Demand
Company Customers
Parent Items
Finished Goods
WIP & Raw Materials
Forecast & Booked
Customer Orders
Calculated
EOQ & ROP
MRP
Class Notes
Chapter 15
15-3
MRP Overview
Authorized
A
th i d
master
production
schedule
Inventory
transactions
Inventory
records
Other
sources of
demand
MRP
explosion
Engineering
and process
designs
Bills of
materials
Material
requirements
plan
Material
Requirements
Planning
Product
structure
file
Master
production
schedule
Material
requirements
planning
Item
master
file
Planned
order
releases
Work
orders
Dr. Loomba
Class Notes
Purchase
orders
Rescheduling
notices
Chapter 15
15-4
MRP Inputs and Outputs
• Inputs
• Master production
schedule
• Product structure file
• Item master file
• Outputs
• Planned order releases
• Work
W k orders
d
• Purchase orders
• Rescheduling notices
Master Production Schedule (MPS)
It is an extension of aggregate plan. It specifies
productions
d ti
exactly
tl iin ffollowing
ll i tterms:
•
i.
ii.
iii.
what (stated in terms of individual end-items)
when (stated in weeks, days, or even hours) and
how much (quantity)
Aggregate Plan
(Product Groups)
MPS
(Specific End Items)
Dr. Loomba
Class Notes
Chapter 15
15-5
Master Production Schedule
• Drives MRP process with a schedule of finished
products
p
• Quantities represent production not demand
• Quantities may consist of a combination of
customer orders and demand forecasts
• Quantities represent what needs to be produced,
not what can be produced
• Quantities represent end items that may or may
not be finished products
Product Structure File
Dr. Loomba
Class Notes
Chapter 15
15-6
Typical Focus of the Master Production
Schedule
Make to Order
(Process Focus)
Number of end
items
Assemble to
Order or
Forecast
Stock to Forecast
(Repetitive)
(Product Focus)
Schedule finished
product
Typical focus
of the master
production
schedule
Schedule modules
Schedule
orders
Number of
inputs
Examples:
Print shop
Machine shop
Fine dining
restaurant
Motorcycles
Autos, TVs
Fast-food
restaurant
Steel, Beer,
Bread Light
bulbs, Paper
Types of Time Fences
• Demand Time Fence
•
No schedule changes allowed within this time fence
fence.
This fence is also referred to as frozen.
• Planning Time Fence
• This fences allows for changes. Typically can be divided into two parts:
Specific changes allowed within product groups
as long as parts are available.
Flexible: Significant variation allowed as long as overall capacity
requirements remain at the same levels.
• Moderately Firm:
•
Dr. Loomba
Class Notes
Chapter 15
15-7
Master Production Schedule
MPS ITEM
Pencil Case
Clipboard
Lapboard
Lapdesk
1
2
125
85
75
0
125
95
120
50
PERIOD
3
4
125
120
47
0
5
125
100
20
50
125
100
17
0
Product Structure
Clipboard
Top clip (1)
Bottom clip (1)
Pivot (1)
Finished clipboard
Pressboard (1)
Copyright 2011 John Wiley & Sons, Inc.
Dr. Loomba
Class Notes
Spring (1)
Rivets ((2))
15-16
Chapter 15
15-8
Product Structure Tree
Level 0
Clipboard
Pressboard
(1)
Top Clip
(1)
Clip Ass’y
(1)
Bottom Clip
(1)
Rivets
(2)
Pivot
(1)
Level 1
Spring
(1)
Level 2
Multilevel Indented BOM
LEVEL
0----1----2---2---2---2--1---1---
Dr. Loomba
ITEM
Clipboard
Clip Assembly
Top Clip
Bottom Clip
Pivot
Spring
Rivet
Press Board
Class Notes
UNIT OF MEASURE
QUANTITY
ea
ea
ea
ea
ea
ea
ea
ea
1
1
1
1
1
1
2
1
Chapter 15
15-9
Bill-of-Material
• List of components & quantities needed to make product
• Provides product structure tree
•
Parents: Items above g
given level;; Children: Items below given
g
level
• Shows low-level coding
•
Lowest level in structure item occurs; Top level is 0; next level is 1 etc.
Product structure for “Awesome” (A)
A
Level
0
BOM Example
B(2) Std. 12” Speaker kit
1
E(2)
2
E(2)
F(2)
Packing box and installation kit
of wire, bolts, and screws
D(2)
3
Std. 12” Speaker kit w/ ampampbooster
C(3)
G(1)
Std. 12” Speaker
booster assembly
D(2)
Amp--booster
Amp
12” Speaker
12” Speaker
BOM Example
Product structure for “Awesome” (A)
A
Level
0
E(2)
2
3
C(3) Std. 12” Speaker kit w/
B(2) Std. 12” Speaker kit
1
F(2) Std. 12” Speaker
E(2)
Packing box and
installation kit of wire,
bolts, and screws
D(2)
amp
a
ampp-booste
booster
booster assembly
G(1)
D(2)
Amp--booster
Amp
12” Speaker
Part B:
Part C:
Part E:
Part F:
Part D:
Part G:
Dr. Loomba
12” Speaker
2 x number of As =
3 x number of As =
2 x number of Bs
+ 2 x number of Cs =
2 x number of Cs =
2 x number of Bs
+ 2 x number of Fs =
1 x number of Fs =
Class Notes
(2)(50) =
(3)(50) =
100
150
(2)(100) + (2)(150) =
(2)(150) =
500
300
(2)(100) + (2)(300) =
(1)(300) =
800
300
Chapter 15
15-10
Time-Phased Product Structure
Must have D and E
completed here so
production can
begin on B
Start production of D
1 week
D
2 weeks to
produce
B
2 weeks
E
A
2 weeks
1 week
E
1 week
2 weeks
G
C
3 weeks
F
1 week
D
|
|
|
|
|
|
|
|
1
2
3
4
5
6
7
8
Time in weeks
Specialized BOMs
• Phantom bills
• Transient subassemblies
• Never stocked
• Immediately consumed in next stage
• K-bills
• Group small, loose parts under pseudo-item number
• Reduces paperwork, processing time, and file space
Dr. Loomba
Class Notes
Chapter 15
15-11
Specialized BOMs
• Modular bills
• Product assembled from major subassemblies and
customer options
• Modular bill kept for each major subassembly
• Simplifies forecasting and planning
• X10 automobile example
• 3 x 8 x 3 x 8 x 4 = 2,304 configurations
• 3 + 8 + 3 + 8 + 4 = 26 modular bills
Modular BOMs
X10
Automobile
Engines
(1 of 3)
Exterior color
(1 of 8)
Interior
(1 of 3)
Body
(1 of 4)
4-Cylinder (.40)
Bright red (.10)
Leather (.20)
Grey (.10)
Sports coupe (.20)
6-Cylinder (.50)
White linen (.10)
Tweed (.40)
Light blue (.10)
Two-door (.20)
8-Cylinder (.10)
Sulphur yellow (.10)
Plush (.40)
Neon orange (.10)
Dr. Loomba
Interior color
(1 of 8)
Rose (.10)
Four-door (.30)
Off-white (.20)
Station wagon (.30)
Metallic blue (.10)
Cool green (.10)
Emerald green (.10)
Black (.20)
Jet black (.20)
Brown (.10)
Champagne (.20)
B/W checked (.10)
Class Notes
Chapter 15
15-12
Time-phased Bills
• An assembly chart shown against a time scale
Time-phased Bills
• Forward scheduling
•
start at today‘s
today s date and schedule forward to determine the earliest date
the job can be finished. If each item takes one period to complete, the
clipboards can be finished in three periods
• Backward scheduling
•
Dr. Loomba
start at the due date and schedule backwards to determine when to
begin work. If an order for clipboards is due by period three, we should
start production now
Class Notes
Chapter 15
15-13
Item Master File
DESCRIPTION
Item
Pressboard
Item no.
It
7341
Item type
Purch
Product/sales class
Comp
Value class
B
Buyer/planner
RSR
Vendor/drawing
07142
Phantom code
N
Unit price/cost
1.25
Pegging
Y
LLC
1
INVENTORY POLICY
Lead time
A
Annual
l demand
d
d
Holding cost
Ordering/setup cost
Safety stock
Reorder point
EOQ
Minimum order qty
Maximum order qty
Multiple order qty
Policy code
1
5000
1
50
0
39
316
100
500
1
3
Item Master File
PHYSICAL INVENTORY
On hand
150
Location
W142
On order
100
Allocated
75
Cycle
3
Last count
9/5
Difference
-2
USAGE/SALES
YTD usage/sales 1100
MTD usage/sales
75
YTD receipts
1200
MTD receipts
0
Last receipt
8/25
Last issue
10/5
CODES
Cost acct.
Routing
Engr
Dr. Loomba
Class Notes
Chapter 15
00754
00326
07142
15-14
MRP Processes
• Exploding the bill of material
• Netting out the inventory
• Netting
• the process of subtracting on-hand quantities and
scheduled receipts from gross requirements to produce
net requirements
• Lot sizing
•
determining the quantities in which items are usually made or
purchased
• Time-phasing requirements
MRP Matrix
Dr. Loomba
Class Notes
Chapter 15
15-15
MRP
Master Production Schedule
Clipboard
Lapdesk
1
2
3
85
0
95
60
120
0
4
100
60
5
100
0
Item Master File
On hand
On order
(sch receipt)
LLC
Lot size
Lead time
CLIPBOARD
25
175 (Period 1)
LAPDESK
20
0
PRESSBOARD
150
0
0
L4L
1
0
Mult 50
1
1
Min 100
1
MRP
Product Structure Record
Clipboard
Pressboard
(1)
Level 0
Clip Ass’y
(1)
Rivets
(2)
Level 1
Lapdesk
p
Pressboard
(2)
Dr. Loomba
Trim
(3’)
Class Notes
Level 0
Beanbag
(1)
Glue
(4 oz)
Chapter 15
Level 1
15-16
MRP - 1
ITEM: CLIPBOARD
LOT SIZE: L4L
LLC: 0
LT: 1
Gross Requirements
Scheduled Receipts
Projected on Hand
PERIOD
1
2
85
95
3
4
5
120
100
100
3
4
5
120
100
100
175
25
Net Requirements
Planned Order Receipts
Planned Order Releases
MRP - 2
ITEM: CLIPBOARD
LOT SIZE: L4L
LLC: 0
LT: 1
Gross Requirements
Scheduled Receipts
Projected on Hand
PERIOD
1
2
85
95
175
25
Net Requirements
115
0
Planned Order Receipts
Planned Order Releases
(25 + 175) = 200 units available
(200 - 85) = 115 on hand at the end of Period 1
Dr. Loomba
Class Notes
Chapter 15
15-17
MRP - 3
ITEM: CLIPBOARD
LOT SIZE: L4L
LLC: 0
LT: 1
Gross Requirements
Scheduled Receipts
Projected on Hand
PERIOD
1
2
85
95
3
4
5
120
100
100
3
4
5
120
100
100
175
25
115
20
0
0
Net Requirements
Planned Order Receipts
Planned Order Releases
115 units available
(115 - 85) = 20 on hand at the end of Period 2
MRP - 4
ITEM: CLIPBOARD
LOT SIZE: L4L
LLC: 0
1
2
Gross Requirements
85
95
Scheduled Receipts
175
Projected on Hand
LT: 1
PERIOD
25
Net Requirements
115
20
0
0
0
100
Planned Order Receipts
Planned Order Releases
100
100
20 units available
(20 - 120) = -100 — 100 additional Clipboards are required
Order must be placed in Period 2 to be received in Period 3
Dr. Loomba
Class Notes
Chapter 15
15-18
MRP - 5
ITEM: CLIPBOARD
LOT SIZE: L4L
LLC: 0
LT: 1
Gross Requirements
Scheduled Receipts
Projected on Hand
PERIOD
1
2
3
4
5
85
95
120
100
100
115
20
0
0
0
0
0
175
25
Net Requirements
Planned Order Receipts
Planned Order Releases
100
100
100
100
100
100
100
100
100
Following the same logic Gross Requirements in Periods 4 and 5
develop Net Requirements, Planned Order Receipts, and Planned
Order Releases
MRP - 6
ITEM: LAPDESK
LOT SIZE: MULT 50
LLC: 0
LT: 1
Gross Requirements
PERIOD
1
2
0
60
3
4
0
60
5
0
Scheduled Receipts
Projected on Hand
20
Net Requirements
Planned Order Receipts
Planned Order Releases
Dr. Loomba
Class Notes
Chapter 15
15-19
MRP - 7
ITEM: LAPDESK
LOT SIZE: MULT 50
LLC: 0
LT: 1
PERIOD
1
Gross Requirements
2
3
4
5
0
60
0
60
0
20
10
10
0
0
Scheduled Receipts
Projected on Hand
20
Net Requirements
0
Planned Order Receipts
Planned Order Releases
40
50
50
50
50
50
Following the same logic, the Lapdesk MRP matrix is
completed as shown
MRP - 8
ITEM: CLIPBOARD
LLC: 0
LOT SIZE: L4L
LT: 1
Planned Order Releases
ITEM: LAPDESK
LOT SIZE: MULT 50
LLC: 0
LT: 1
Planned Order Releases
ITEM: PRESSBOARD
LOT SIZE: MIN 100
Gross Requirements
Scheduled Receipts
Projected on Hand
Net Requirements
Planned Order Receipts
Planned Order Releases
Dr. Loomba
1
PERIOD
2
3
4
100
100
100
1
2
50
LLC: 0
LT: 1
1
PERIOD
3
5
4
5
4
5
50
2
PERIOD
3
150
Class Notes
Chapter 15
15-20
MRP – 9
ITEM: CLIPBOARD
LLC: 0
LOT SIZE: L4L
LT: 1
Planned Order Releases
ITEM: LAPDESK
LOT SIZE: MULT 50
1
PERIOD
3
4
100
100
2
PERIOD
3
x1
LLC: 0
LT: 1
1
Planned Order Releases
ITEM: PRESSBOARD
LOT SIZE: MIN 100
2
100
50
LLC: 0
LT: 1
Gross Requirements
Scheduled Receipts
Projected on Hand
Net Requirements
Planned Order Receipts
Planned Order Releases
x1
x1
4
5
5
50
x2
x2
5
1
2
PERIOD
3
4
100
100
200
100
1
PERIOD
2
3
4
100
100
100
0
150
MRP – 10
ITEM: CLIPBOARD
LLC: 0
LOT SIZE: L4L
LT: 1
Planned Order Releases
ITEM: LAPDESK
LOT SIZE: MULT 50
x1
LLC: 0
LT: 1
1
Planned Order Releases
ITEM: PRESSBOARD
LOT SIZE: MIN 100
Gross Requirements
Scheduled Receipts
Projected on Hand
Net Requirements
Planned Order Receipts
Planned Order Releases
Dr. Loomba
2
50
LLC: 0
LT: 1
150
Class Notes
x1
x1
4
5
4
5
50
x2
x2
PERIOD
3
1
2
PERIOD
3
100
100
200
100
50
50
50
100
150
0
150
150
100
0
100
100
100
5
Chapter 15
0
15-21
MRP - 11
Planned Order Report
ITEM
PERIOD
1
Clipboard
Lapdesk
Pressboard
50
100
2
3
4
100
100
50
100
100
150
5
Lot Sizing in MRP Systems
• Lot-for-lot ordering policy
• Fixed-size lot ordering policy
• Minimum order quantities
• Maximum order quantities
• Multiple order quantities
• Economic order quantity
• Periodic order quantity
Dr. Loomba
Class Notes
Chapter 15
15-22
Advanced Lot Sizing Rules: L4L
Total cost of L4L = (4 X $60) + (0 X $1) = $240
Advanced Lot Sizing Rules: EOQ
EO Q
2(30)(60
60
1
minimum order quantity
Total cost of EOQ = (2 X $60) + [(10 + 50 + 40) X $1)] = $220
Dr. Loomba
Class Notes
Chapter 15
15-23
Advanced Lot Sizing Rules: POQ
POQ Q / d 60 / 30 2 periods worth of requirements
Total cost of POQ = (2 X $60) + [(20 + 40) X $1] = $180
Planned Order Report
Item
On hand
On order
Allocated
#2740
100
200
50
Date
Lead time
Lot size
Safety stock
DATE
ORDER NO.
GROSS REQS.
9-26
9-30
10-01
10-08
10-10
10-15
10-23
10-27
AL 4416
AL 4174
GR 6470
SR 7542
CO 4471
GR 6471
GR 6471
GR 6473
25
25
50
Key: AL = allocated
CO = customer order
PO = purchase order
Dr. Loomba
SCHEDULED
RECEIPTS
200
75
50
25
50
PROJECTED
ON HAND
50
25
0
- 50
150
75
25
0
- 50
9 - 25 - 05
2 weeks
200
50
ACTION
Expedite SR 10-01
Release PO 10-13
WO = work order
SR = scheduled receipt
GR = gross requirement
Class Notes
Chapter 15
15-24
MRP Action Report
Current date 9-25-08
ITEM DATE
#2740
#3616
#2412
#3427
#2516
#2740
#3666
10 08
10-08
10-09
10-10
10-15
10-20
10-27
10-31
ORDER NO. QTY.
7542
200
7648
100
200
50
ACTION
Expedite
Move forward
Move forward
Move backward
De-expedite
Release
Release
SR
PO
PO
PO
SR
PO
WO
10 01
10-01
10-07
10-05
10-25
10-30
10-13
10-24
Capacity Requirements Planning (CRP)
• Creates a load profile
• Identifies under
under-loads
loads and over
over-loads
loads
• Inputs
• Planned order releases
• Routing file
• Open orders file
Dr. Loomba
Class Notes
Chapter 15
15-25
CRP
MRP planned
order
releases
Routing
file
Capacity
requirements
planning
Open
orders
file
Load profile for
each process
Calculating Capacity
• Maximum capability to produce
• Rated Capacity
• Theoretical output that could be attained if a process were
operating at full speed without interruption, exceptions, or
downtime
• Effective Capacity
• Takes into account the efficiency with which a particular product
or customer can be processed and the utilization of the
scheduled hours or work
Effective Daily Capacity = (no. of machines or workers) x
(hours per shift) x (no. of shifts) x (utilization) x ( efficiency)
Dr. Loomba
Class Notes
Chapter 15
15-26
Calculating Capacity
• Utilization
• Percent of available time spent working
• Efficiency
• How well a machine or worker performs compared to a standard
output level
• Load
• Standard hours of work assigned to a facility
• Load Percent
• Ratio of load to capacity
load
Load Percent =
x 100%
capacity
Load Profiles
• Graphical comparison of load versus capacity
• Leveling underloaded conditions:
• Acquire more work
• Pull work ahead that is scheduled for later time periods
• Reduce normal capacity
• Load leveling
• Process of balancing underloads and overloads
Dr. Loomba
Class Notes
Chapter 15
15-27
Reducing Over-load Conditions
•
•
•
•
•
•
•
•
Eliminate unnecessary requirements
Reroute jobs to alternative machines, workers,
or work centers
Split lots between two or more machines
Increase normal capacity
Subcontract
Increase efficiency of the operation
Push work back to later time periods
Revise master schedule
Copy Courier
• Two high-speed copiers that can be operated by one
•
•
•
•
•
•
•
operator.
2 shifts p
per day
y
8 hours/shift , 5 days/week.
No breaks during the day
30 minutes for lunch or dinner
Machine service time = 30 minutes at the beginning of
each shift
Machine efficiency = 90%.
Capacity
• 2 copiers * 2 shifts * 8 hrs/day * 7/8 utilization * .90 efficiency =
1512 minutes/day
Dr. Loomba
Class Notes
Chapter 15
15-28
Copy Courier
Job
10
20
30
40
50
No. of
Copies
500
1000
5000
4500
2000
000
Setup Time
(min)
5.2
10.6
3.4
11.2
15.3
53
Run Time
(min/unit)
0.08
0.10
0.12
0.14
0.10
0
0
Load Calculations
Job
10
20
30
40
50
Dr. Loomba
Setup + Run x No. Copies
5 2 + (500 X 0
5.2
0.08)
08)
10.6 + (1000 X 0.10)
3.4 + (5000 X 0.12)
11.2 + (4500 X 0.14)
15.3 + (2000 X 0.10)
Class Notes
Job Time
= 45
45.20
20
= 110.60
= 603.40
= 641.20
= 215.30
1,615.70
,
min
Chapter 15
15-29
Loading
Capacity
2 copiers * 2 shifts * 8 hrs/day * 7/8 utilization * .90 efficiency
= 1512 minutes/day
Load percent = 1615.70/1512 = 1.068 X 100% = 106.8%
Overloaded by 6.8%.
Extends working day by approximately 36 minutes
Load percent = 99%.
Increase efficiency to 97%.
Hours of capacity
y
Initial Load Profile
120 –
110 –
100 –
90 –
80 –
70 –
60 –
50 –
40 –
30 –
20 –
10 –
0–
Normal
capacity
1
2
3
4
5
6
Time (weeks)
Dr. Loomba
Class Notes
Chapter 15
15-30
Hours of capacity
y
Adjusted Load Profile
120 –
110 –
100 –
90 –
80 –
70 –
60 –
50 –
40 –
30 –
20 –
10 –
0–
Pull ahead
Overtime
1
Work
an
extra
shift
Push back
3
4
2
Push back
Normal
capacity
5
6
Time (weeks)
Relaxing MRP Assumptions
• Material is not always the most constraining
resource
• Lead times can vary
• Not every transaction needs to be recorded
• Shop floor may require a more sophisticated
scheduling system
• Scheduling
g in advance may
y not be appropriate
pp p
for on-demand production.
Dr. Loomba
Class Notes
Chapter 15
15-31
Enterprise Resource Planning (ERP)
• Software that organizes and manages a
company’s business processes by
• sharing
h i iinformation
f
ti across ffunctional
ti
l areas
• integrating business processes
• facilitating customer interaction
• providing benefit to global companies
Organizational Data Flows
Dr. Loomba
Class Notes
Chapter 15
15-32
ERP’s Central Database
Selected Enterprise Software Vendors
Dr. Loomba
Class Notes
Chapter 15
15-33
ERP Implementation
• Analyze business processes
• Choose modules to implement
• Which processes have the biggest impact on customer
relations?
• Which process would benefit the most from integration?
• Which processes should be standardized?
• Align level of sophistication
• Finalize delivery and access
• Link with external partners
Customer Relationship Management (CRM)
• Software that
• Plans and executes business processes
• Involves customer interaction
• Changes focus from managing products to managing customers
• Analyzes point-of-sale data for patterns used to predict future
behavior
Dr. Loomba
Class Notes
Chapter 15
15-34
Supply Chain Management
• Software that plans and executes business
processes related to supply chains
• Includes
• Supply chain planning
• Supply chain execution
• Supplier relationship management
• Distinctions between ERP and SCM are becoming
i
increasingly
i l bl
blurred
d
Product Lifecycle Management (PLM)
• Software that
• Incorporates new product design and development and product life
cycle
y
management
g
• Integrates customers and suppliers in the design process though
the entire product life cycle
Dr. Loomba
Class Notes
Chapter 15
15-35
ERP and Software Systems
Connectivity
• Application programming interfaces (APIs)
• give other programs well-defined ways of speaking
to them
• Enterprise Application Integration (EAI)
solutions
• EDI is being replaced by XML, business
language of Internet
• Service-oriented
S i
i t d architecture
hit t
(SOA)
• collection of “services” that communicate with each
other within software or between software
Dr. Loomba
Class Notes
Chapter 15
15-36
CHAPTER 16
Lean Systems
Lecture Outline
• Basic Elements of Lean Production
• Benefits of Lean Production
• Implementing Lean Production
• Lean Services
• Leaning the Supply Chain
• Lean Six Sigma
• Lean and the Environment
• Value Stream Mapping
Dr. Loomba
Class Notes
Chapter 16
16-1
Lean Production
• Lean system implemented through just-in-time (JIT)
philosophy
• JIT is characteristic of lean prod
production
ction systems
s stems
• “JIT” and “Lean Production” are used interchangeably
• Just-in-time (JIT)
• Repetitive production system in which processing and movement of
materials and goods occur just as they are needed, usually in small
batches
• Doing more with less inventory, fewer workers, less space
• Smoothing the flow of material to arrive just as it is needed
• JIT operates with very little “fat”
• Muda
• waste, anything other than that which adds value to product or
service
Waste in Operations
Dr. Loomba
Class Notes
Chapter 16
16-2
Waste in Operations
The Pillars of JIT
Zero non-value added
activities (muda)
Zero defects, zero breakdowns, zero inventory, zero set-up
Production flow synchronized with demand (JIT)
One-unit-at-a-time flow
Mixed model production (heijunka or 平準化 )
Piece-by-piece transfer (ikko-nagashi or 一箇流し)
Match production demand based on Takt time
Pull instead of push
Supermarket / Kanban
Make-to-order
Quality methods to reduce defects
Fool-proofing (poka-yoke) and visual feed-back
Go and see (Genchi Genbutsu or 現地現物)
Detect-stop-alert (Jidoka or 自働化)
Defects at machines (original Jidoka)
Defects in assembly (Andon or 行灯 cord)
Build-in-quality (tsukurikomi or 作りこみ)
Reduce inventory to
expose defects
Flexibility
Standardization of work
Worker involvement
Dr. Loomba
Class Notes
Adjustment of capacity to meet takt-time
Multi-task assignment (takotei-mochi or 多工程持ち)
Reduction of Variability
Quartile Analysis
Standard operating procedures
Quality circles (Kaizen or 改善)
Fishbone diagrams (Ishikawa)
Skill development / X-training
Chapter 16
16-3
Lean Production
• Goals:
• Make system flexible
• Reserve capacity for
important customers
• Eliminate disruptions
• Minimize inventory
• Eliminate waste (all but
value-added activities)
• Reduce space
requirements
i
t
• Reduce the number of
job classes
• Make jobs more
challenging
• Develop close supplier
ties and educate them
• Characteristics
• Pull method of materials flow
• Consistently high quality
• Small lot sizes
• Uniform workstation loads
• Flexible work force and
processes to help clear
bottlenecks
• Stable demand schedule
• Line flow strategy
• Automated production via
Autonomation
• Preventive maintenance
• Kanban production control
system
JIT and Quality Principles
Dr. Loomba
Class Notes
Chapter 16
16-4
Basic Elements
Flexible resources
Cellular layouts
Pull system
y
Kanbans
Small lots
Quick setups
Uniform production levels
Quality at the source
Total productive
maintenance
Supplier networks
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Flexible Resources (Takotei-mochi or
多工程持ち)
• Cross-train workers to help clear bottlenecks
• Multifunctional workers perform more than one job
• General-purpose
General purpose machines perform several
basic functions
• Use preventive maintenance to reduce
breakdowns
• Reserve capacity for important customers
• Reduce downtime by reducing changeover
time
• Cycle time
• time required for the worker to complete one pass
through the operations assigned
• Takt time
• paces production to customer demand
• producing faster than takt time results in a buildup of
inventory
• Cycle time is adjusted to match takt time by
changing worker paths
Dr. Loomba
Class Notes
Chapter 16
16-5
Standard Operating Routine for a Worker
Cellular Layouts
• Manufacturing cells comprised of dissimilar machines
brought together to manufacture a family of parts
• Cells With Worker Routes:
Dr. Loomba
Class Notes
Chapter 16
16-6
Worker Routes Lengthen as Volume
Decreases
Pull System
• System for moving work where a workstation
pulls output from the preceding station as
eeded
needed.
• Reversal of traditional push system where
material is pushed according to a schedule
• Forces cooperation
• Prevent over and underproduction
• While push systems rely on a predetermined
schedule pull systems rely on customer
schedule,
requests
Dr. Loomba
Class Notes
Chapter 16
16-7
Kanbans
• Kanban is the Japanese word for card
• Card which indicates standard quantity of production
• Paperless production control system
• Derived from two
two-bin
bin inventory system
• Maintain discipline of pull production
• Authorize production and movement of goods
• Authority to pull, or produce comes from a downstream process.
• Types of kanbans:
• Production kanban
• authorizes production of goods
• Withdrawal kanban
• authorizes movement of goods
• Kanban square
• a marked area designated to hold
items
• Signal
g
kanban
• a triangular kanban used to signal
production at the previous workstation
• Material kanban
• used to order material in advance of a
process
• Supplier kanban
• rotates between factory and suppliers
Sample Kanban
Dr. Loomba
Class Notes
Chapter 16
16-8
Origin of Kanban
a) Two-bin inventory system
b) Kanban inventory system
Bin 1
Kanban
Bin 2
Reorder
card
Q-R
R
R
Q = order quantity
R = reorder point - demand during lead time
Kanban Signals
Finished
goods
Kanban
Customer
order
Work
cell
Ship
Raw
Material
Supplier
Kanban
Kanban
Purchased
Parts
Supplier
Dr. Loomba
Final
assembly
Kanban
Kanban
Class Notes
Kanban
Sub-Sub
assembly
Chapter 16
16-9
Kanban Production Control Systems
Once the Production kanban is
received, the machine Center
produces a unit to replace the
one taken by the Assembly
Line people in the first place
Machine
Center
This puts the
system back
were it was
before the item
was pulled
Withdrawal
kanban
Storage
Part A
Storage
Part A
Assembly
Line
Production kanban
Material Flow
The process begins by the Assembly
Line people pulling Part A from Storage
Card (signal) Flow
Single-Card Kanban System
•
•
•
•
•
•
Dr. Loomba
Each container must have
a kanban card
Assembly always
withdraws from fabrication
(pull system)
Containers cannot be
moved without a kanban
Containers should contain
the same number of parts
Only good parts are
passed along
Production should not
exceed authorization
Class Notes
KANBAN
Part Number:
1234567Z
Location:
Aisle 5
Bin 47
Lot Quantity:
6
S
Supplier:
li
WS 83
Customer:
WS 116
Chapter 16
16-10
Dual Kanban System
Other Kanbans
Dr. Loomba
Class Notes
Chapter 16
16-11
More Kanban
• When the producer and user are not in visual contact, a card can be
used
• When the producer and user are in visual contact
contact, a light or flag or
empty spot on the floor may be adequate
• Since several components may be required, several different kanban
techniques may be employed
• Usually each card controls a specific quantity or parts
• Multiple card systems may be used if there are several components
or different lot sizes
• Kanban cards provide a direct control and limit on the amount of
work-in-process
work
in process between cells
• In an MRP system, the schedule can be thought of as a build
authorization and the kanban a type of pull system that initiates actual
production
• If there is an immediate storage area, a two-card system can be used
with one card circulating between the user and storage area and the
other between the storage area and the producer
Determining Number of Kanbans
• Setting up a kanban system requires determining the number of
kanbans cards (or containers) needed
• Each container represents the minimum production lot size
• An accurate estimate of the lead time required to produce a
container is key to determining how many kanbans are required
average demand during lead time + safety stock
container size
No. of Kanbans =
N =
where
N
d
L
S
C
Dr. Loomba
dL + S
C
= number of kanbans or containers
= average demand over some time period
= lead time to replenish an order
= safety stock
= container size
Class Notes
Chapter 16
16-12
Determining Number of Kanbans
d
L
S
C
= 150 bottles per hour
= 30 minutes = 0.5 hours
= 0.10(150
0 10(150 x 0.5)
0 5) = 77.55
= 25 bottles
(150 x 0.5) + 7.5
dL + S
=
25
C
75 + 7.5
=
= 3.3 kanbans or containers
25
N=
Round up to 4 (to allow some slack) or
down to 3 (to force improvement)
Operational Benefits of Kanbans
• Problems are immediately evident
• Allow only
y limited amount of faultyy or delayed
y
material
• Puts downward pressure on bad aspects of
inventory
• Standardized containers reduce weight, disposal
costs, wasted space, and labor
• Reduced p
paperwork
p
and simpler
p p
planning
g
systems
Dr. Loomba
Class Notes
Chapter 16
16-13
Small Lots
• Small-batch production is an important approach for
matching production rate to demand rate.
• Producing in more frequent, smaller batches drives the average
inventory level down.
• But it also increases the number of times equipment must be
changed over, which can cut into available capacity.
• Small-batch production becomes economical only when
changeover times can be reduced sufficiently.
• Require
R
i less
l
space and
d capital
it l iinvestment
t
t
• Move processes closer together
• Make quality problems easier to detect
• Make processes more dependent on each other
Inventory Hides Problems
Dr. Loomba
Class Notes
Chapter 16
16-14
Less Inventory Exposes Problems
Components of Lead Time
• Processing time
• Reduce number of items or improve efficiency
• Move
M
ti
time
• Reduce distances, simplify movements, standardize
routings
• Waiting time
• Better scheduling, sufficient capacity
• Setup
p time
• Generally the biggest bottleneck
Dr. Loomba
Class Notes
Chapter 16
16-15
Quick Setups
• High setup costs
encourage large lot
sizes
• Reducing setup costs
reduces lot size and
reduces average inventory
• Setup time can be reduced
through preparation prior to
shutdown and changeover
• Internal setup
• SMED Principles
• Separate internal setup
p
from external setup
• Convert internal setup to
external setup
• Streamline all aspects of
setup
• Perform setup activities in
parallel or eliminate them
y
entirely
• Can be performed only when
a process is stopped
• External setup
• Can be performed in
advance
Reduce Setup Times
Initial Setup Time
Step 1
Separate setup into preparation and actual setup
setup,
doing as much as possible while the
machine/process is operating
(save 30 minutes)
Move material closer and
improve material handling
(save 20 minutes)
Step 2
St 3
Step
Step 5
Use oneone-touch system to eliminate
adjustments (save 10 minutes)
Training operators and standardizing
work procedures (save 2 minutes)
Repeat cycle until subminute
setup is achieved
Class Notes
60 min —
45 min —
Standardize and
improve tooling (save
15 minutes)
Step 4
Dr. Loomba
90 min —
Chapter 16
25 min —
15 min —
13 min —
—
16-16
Techniques for Reducing Setup Time
Uniform Production Levels
• Result from smoothing production requirements
on final assembly line
• Kanban systems can handle +/- 10% demand
changes
• Reduce variability with more accurate forecasts
• Smooth demand across planning horizon
• Mixed-model assembly steadies component
production
Dr. Loomba
Class Notes
Chapter 16
16-17
Mixed-Model Sequencing
Quality at the Source
• Visual control
• makes problems visible
• Jidoka
• authority to stop the
production line
• Poka-yokes
• prevent defects from
occurring
• Andons
• call lights that signal quality
problems
• Kaizen
• a system of continuous
improvement; “change for the
good of all”
all
Dr. Loomba
Class Notes
• Under-capacity scheduling
• leaves time for planning,
problem solving, and
maintenance
Chapter 16
16-18
Examples of Visual Control
5 Whys
• A key part in an effective Kaizen is finding the root cause
of a problem and eliminating it
• A practice of asking “why?”
why? repeatedly until the underlying
cause is identified (usually requiring five questions)
• Simple, yet powerful technique for finding the root cause
of a problem
Dr. Loomba
Class Notes
Chapter 16
16-19
Total Productive Maintenance (TPM)
• Breakdown maintenance
• Repairs to make failed machine operational
• Preventive maintenance
• System of periodic inspection and maintenance to keep machines
operating
• TPM combines preventive maintenance and total quality
concepts
• TPM Requirements
• Design products that can be easily produced on existing machines
• Design machines for easier operation, changeover, maintenance
• Train and retrain workers to operate machines
• Purchase machines that maximize productive potential
• Design preventive maintenance plan spanning life of machine
5S Workplace Scan
5S Scan
Eliminate or Correct
Unneeded equipment, tools, furniture; unneeded items on
walls, bulletins; items blocking aisles or stacked in
corners; unneeded inventory, supplies, parts; safety
hazards
Seiri (整理)
(sort)
Keep only what you need
Seiton (整頓)
(set in order)
A place for everything
and everything in its
place
Items not in their correct places; correct places not
obvious; aisles, workstations, & equipment locations not
indicated; items not put away immediately after use
Seisou (清掃)
(shine)
Cleaning, and looking for
ways to keep clean and
organized
Floors, walls, stairs, equipment, & surfaces not clean;
cleaning materials not easily accessible; lines, labels,
signs broken or unclean; other cleaning problems
Maintaining and
monitoring the first
three categories
Necessary information not visible; standards not known;
checklists missing; quantities and limits not easily
recognizable; items can’t be located within 30 seconds
Sticking to the rules
Number of workers without 5S training; number of daily 5S
inspections not performed; number of personal items not
stored; number of times job aids not available or up-todate
Seiketsu (清潔)
(standardize)
Shisuke (躾)
(sustain)
Dr. Loomba
Goal
Class Notes
Chapter 16
16-20
Employee Empowerment
• Empowered employees bring their knowledge and
involvement to daily operations
• Some traditional staff tasks can move to empowered
employees
• Training, cross-training, and fewer job classifications can
mean enriched jobs
• Companies gain from increased commitment from
employees
Supplier Networks
• Few suppliers
• Suppliers located in close proximity to the customer
• Repeat business with same suppliers
• Mixed loads and frequent deliveries
• Precise delivery schedules
• Standardized, sequenced delivery
• Long
Long-term
term supplier contracts
• Synchronized production
• Supplier certification
Dr. Loomba
Class Notes
Chapter 16
16-21
JIT Partnerships
• JIT partnerships exist when purchasers work with
•
•
•
•
•
suppliers (in a supplier network) to remove waste and
drive down costs
Support suppliers so they become or remain price
competitive
Competitive bidding mostly limited to new purchases
Buyer resists vertical integration and subsequent
wipeout of supplier business
Suppliers encouraged to extend JIT buying to their
suppliers
Successful JIT partnerships require:
• Elimination of unnecessary activities
• Elimination of in-plant inventory
• Elimination of in-transit inventory
• Elimination of poor suppliers
Benefits of Lean Production
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Dr. Loomba
Reduced inventory
Improved quality
Lower costs
Reduced space requirements
Increased equipment utilization
Shorter lead time
Increased productivity
Greater flexibility
Better relations with suppliers
Simplified scheduling and control activities
Valid priorities for production scheduling
Increased capacity
Better use of human resources
Work force participation
More product variety
Class Notes
Chapter 16
16-22
Lean Production Aspects
• Implementing Lean Production
• Use lean production to finely tune an operating system
• Somewhat different in USA than Japan
• Lean production is still evolving
• Lean production is not for everyone
• Lean Production Problems
• Highly variable demand
• Large variety of low-volume products
• Custom engineered products
• Mass production parts
• Unexpected changes in demand or supply
Lean Services
• Basic elements of lean production apply equally
to services
• Most prevalent applications
• lean retailing
• lean banking
• lean health care
Dr. Loomba
Class Notes
Chapter 16
16-23
Leaning the Supply Chain
• Several approaches
• “pulling” a smooth flow of material through a series of suppliers to
•
•
•
•
•
support frequent replenishment orders and changes in customer
demand
Firms need to share information and coordinate demand forecasts,
production planning, and inventory replenishment with suppliers
and supplier’s suppliers throughout supply chain
Pull a smooth flow of material through the system
Build a highly collaborative business environment
Adopt the technology to support your system
Consider “near shoring”
Lean Six Sigma and VSM
• Lean and Six Sigma are natural partners for process
improvement
• Lean
• Eliminates waste and creates flow
• More continuous improvement
• Six Sigma
• Reduces variability and enhances process capabilities
• Requires breakthrough improvements
• Value Stream Mapping (VSM)
• A tool
t l for
f analyzing
l i process fl
flows and
d eliminating
li i ti waste
t
• Specialized icons related to
• lean production
• material and information flows
• “aha” Kaizen bursts
Dr. Loomba
Class Notes
Chapter 16
16-24
VSM Shapes
VSM for Milling & Welding
Dr. Loomba
Class Notes
Chapter 16
16-25
VSM for Emergency Room
Dr. Loomba
Class Notes
Chapter 16
16-26
CHAPTER 17
Scheduling
Lecture Outline
• Objectives in Scheduling
• Loading
• Sequencing
• Monitoring
• Advanced Planning and Scheduling Systems
• Theory of Constraints
• Employee Scheduling
Dr. Loomba
Class Notes
Chapter 17
17-1
Scheduling
• What is Scheduling?
• Last stage of planning before production occurs
• Specifies when labor, equipment, and facilities are
needed to produce a product or provide a service
• Strategic Importance of Short-Term Scheduling
• Effective and efficient scheduling can be a competitive
g
advantage
• Faster movement of goods through a facility means better use of
assets and lower costs
• Additional capacity resulting from faster throughput improves
customer service through faster delivery
• Good schedules result in more reliable deliveries
Scheduled Operations
• Scheduling deals with the timing of operations
• The task is the allocation and prioritization of demand
• Significant issues are
• The type of scheduling, forward or backward
• The criteria for priorities
• Examples:
• Process Industry
• Linear programming
• EOQ with non-instantaneous
replenishment
• Mass Production
• Assembly line balancing
• Project
• Project -scheduling
techniques (PERT, CPM)
Dr. Loomba
Class Notes
• Batch Production
• Aggregate planning
• Master scheduling
• Material requirements
planning (MRP)
• Capacity requirements
planning (CRP)
Chapter 17
17-2
Objectives in Scheduling
• Meet customer due dates
• Minimize overtime
• Minimize job lateness
• Maximize machine or labor
• Minimize
Mi i i response ti
time
utilization
• Minimize idle time
• Minimize work-in-process
inventory
• Minimize completion time
• Minimize time in the
system
Forward and Backward Scheduling
• Forward scheduling starts as soon as
•
•
•
•
•
Dr. Loomba
the requirements are known
Produces a feasible schedule though it
may not meet due dates
Frequently results in excessive work-inprocess inventory
Backward scheduling begins with the
due date and schedules the final
operation
ti first
fi t
Schedule is produced by working
backwards though the processes
Resources may not be available to
accomplish the schedule
Class Notes
Now
Due
Date
Now
Due
Date
Chapter 17
17-3
Scheduling Process-Focused Facilities
1. Schedule incoming orders without violating capacity
constraints
2. Check availability of tools and materials before releasing an
order
3. Establish due dates for each job and check progress
4. Check work in progress
5. Provide feedback
6. Provide work efficiency statistics and monitor times
Planning Files
1.
1
2.
3.
An item master file contains information about each component
A routing file indicates each component’s flow through the shop
A work-center master file contains information about the work
center
Control Files
Track the actual progress made against the plan
Shop Floor Control (SFC)
• Schedule and monitor day-to-day job shop production
• Also called production control and production activity
control (PAC)
• Performed by production control department
• Loading - check availability of material, machines, and labor
• Sequencing - release work orders to shop and issue dispatch lists
for individual machines
• Monitoring - maintain progress reports on each job until it is
complete
p
Dr. Loomba
Class Notes
Chapter 17
17-4
Loading
• Loading
• Process of assigning
g g work to limited resources
• Perform work with most efficient resources
• Use assignment method of linear programming to determine
allocation
• Loading Jobs
• Assign jobs so that costs, idle time, or completion time are
minimized
• Two forms of loading
• Capacity
C
it oriented
i t d
• Assigning specific jobs to work centers
• Input-Output Control
• Identifies overloading and underloading conditions
• Prompts managerial action to resolve scheduling problems
• Can be maintained using ConWIP cards that control the scheduling of
batches
Assignment Method
1. Perform row reductions
•
subtract minimum value in each
row from all other row values
2. Perform column reductions
•
subtract minimum value in each
column from all other column
values
3. Cross out all zeros in matrix
•
use minimum number of
horizontal and vertical lines
4. If number of lines equals number
of rows in matrix, then optimum
solution has been found. Make
assignments where zeros appear
⎯
⎯
⎯
⎯
Else modify matrix:
subtract minimum uncrossed
value from all uncrossed values
add it to all cells where two lines
intersect
other values in matrix remain
unchanged
5 Repeat steps 3 and 4 until
5.
optimum solution is reached
Dr. Loomba
Class Notes
Chapter 17
17-5
Assignment Method
Initial
Matrix
Bryan
Kari
Noah
Chris
Row reduction
5
4
2
5
0
0
1
1
1
2
0
0
5
4
1
6
1
10
6
7
9
PROJECT
3
6
4
5
4
2
5
2
6
5
4
10
6
6
10
Column reduction
Cover all zeros
3
2
0
3
3
2
0
3
0
0
1
1
1
2
0
0
4
3
0
5
0
0
1
1
1
2
0
0
4
3
0
5
Number lines number of rows so modify matrix
Assignment Method
Modify matrix
1
0
1
0
0
2
0
3
2
1
1
0
2
1
0
3
Cover all zeros
1
0
1
2
0
0
2
1
0
3
2
0
1
1
0
3
Number of lines = number of rows so at optimal
solution
PROJECT
PROJECT
1
2
3
4
1
2
3
4
Bryan
y
10
5
6
10
Bryan
y
1
0
1
2
Kari
6
2
4
6
Kari
0
0
2
1
Noah
7
6
5
6
Noah
0
3
2
0
Chris
9
5
4 10
Chris
1
1
0
3
Project Cost = (5 + 6 + 4 + 6) X $100 = $2,100
Dr. Loomba
Class Notes
Chapter 17
17-6
Sequencing
• Sequencing: Determine the order in which jobs
should be performed at work centers
• Workstation: An area where one person works,
usually with special equipment, on a specialized
job.
• Priority rules: Simple heuristics
Everything is
used to select the order in
#1 Priority
which jobs will be processed.
processed
• Job time: Time needed for
setup and processing of a job.
Sequencing Jobs
Prioritize jobs assigned to a resource, to dispatch or
sequence jobs
• If no order specified use first-come first-served (FCFS)
• Other Sequencing Rules
•
• FCFS - first-come, first-served
• LCFS - last come, first served
• DDATE - earliest due date
• CUSTPR - highest customer priority
• SETUP - similar required setups
• SLACK - smallest slack
• CR - smallest critical ratio
• SPT - shortest processing time
• LPT - longest processing time
Dr. Loomba
Class Notes
Chapter 17
17-7
Critical Ratio (CR)
An index number found by dividing the
time remaining until the due date by the
work time remaining on the job
Jobs with low critical ratios are scheduled
ahead of jobs with higher critical ratios
Performs well on average job lateness
criteria
CR =
Time remaining
Due date - Today’s date
=
Workdays remaining
Work (lead) time remaining
Minimum Slack & Smallest Critical Ratio
SLACK considers both work and time remaining
•
SLACK = (due date – today’s date) – (processing time)
CR is an index number found by dividing the time remaining until
the due date by the work time remaining on the job
•
•
CR recalculates sequence as processing continues and arranges information in
ratio form
•
Jobs with low critical ratios are scheduled ahead of jobs with higher critical ratios
•
Performs well on average job lateness criteria
CR =
time remaining
work remaining
=
due date - today’s date
remaining processing time
If CR > 1, job ahead of schedule
If CR < 1, job behind schedule
If CR = 1, job on schedule
Dr. Loomba
Class Notes
Chapter 17
17-8
Sequencing Jobs Through One Process
• Flow time (completion time)
• Time for a job to flow through system
• Makespan
• Time for a group of jobs to be completed
• Tardiness
• Difference between a late job’s due date and its completion time
JOB
PROCESSING
TIME
A
10
B
C
D
E
DUE
DATE
5
10
2
8
6
15
5
12
8
Simple Sequencing Rules: FCFS
FCFS
SEQUENCE
Q
START
TIME
A
B
C
D
E
0
5
15
17
25
Dr. Loomba
PROCESSING COMPLETION DUE
TIME
TIME
DATE
5
10
2
8
6
Total
Average
Class Notes
5
15
17
25
31
93
93/5 = 18.60
10
15
5
12
8
Chapter 17
TARDINESS
0
0
12
13
23
48
48/5 = 9.6
17-9
Simple Sequencing Rules: DDATE
DDATE
SEQUENCE
Q
START
TIME
C
E
A
D
B
0
2
8
13
21
PROCESSING COMPLETION DUE
TIME
TIME
DATE
TARDINESS
2
6
5
8
10
Total
Average
0
0
3
9
16
28
28/5 = 5.6
2
8
13
21
31
75
75/5 = 15.00
Simple Sequencing Rules:
SLACK
SLACK
SEQUENCE
START
TIME
E
C
D
A
B
0
6
8
16
21
Dr. Loomba
5
8
10
12
15
A(10-0) – 5 = 5
B(15-0) – 10 = 5
C(5-0) – 2 = 3
D(12-0) – 8 = 4
E(8-0)
E(8
0) – 6 = 2
PROCESSING COMPLETION DUE
TIME
TIME
DATE
TARDINESS
6
2
8
5
10
Total
Average
0
3
4
11
16
34
34/5 = 6.8
Class Notes
6
8
16
21
31
82
82/5 = 16.40
8
5
12
10
15
Chapter 17
17-10
Simple Sequencing Rules: SPT
SPT
SEQUENCE
START
TIME
C
A
E
D
B
0
2
7
13
21
PROCESSING COMPLETION DUE
TIME
TIME
DATE
TARDINESS
2
5
6
8
10
Total
Average
0
0
5
9
16
30
30/5 = 6
2
7
13
21
31
74
74/5 = 14.80
5
10
8
12
15
Simple Sequencing Rules: Summary
AVERAGE
RULE COMPLETION TIME
FCFS
DDATE
SLACK
SPT
AVERAGE
TARDINESS
18.60
15.00
16.40
14.80
9.6
5.6
6.8
6.0
NO. OF
JOBS TARDY
3
3
4
3
MAXIMUM
TARDINESS
23
16
16
16
Best values
Dr. Loomba
Class Notes
Chapter 17
17-11
Guidelines for Selecting a Sequencing Rule
No one sequencing rule excels on all criteria
Comparison of Sequencing Rules
•
•
FCFS does not do especially well (or poorly) on any criteria but
is perceived as fair by customers
•
•
Use FCFS when operating at low-capacity levels
SPT most useful when shop is highly congested
•
•
•
•
SPT does well on minimizing flow time and number of jobs in the
system
But SPT moves long jobs to the end which may result in dissatisfied
customers
Do not use SPT to sequence jobs that have to be assembled with
other jobs at a later date
Use LPT if subcontracting is anticipated
EDD minimizes lateness
Use SLACK for periods of normal activity
Use DDATE when only small tardiness values can be tolerated
•
•
•
•
Sequencing N Jobs Through Two
Serial Process: Johnson’s Rule
•
•
Works with two or more jobs that pass through
the same two machines or work centers
Minimizes total production time and idle time
Johnson’s Rule
1. List time required to process each job at each process. Set up
a one-dimensional matrix to represent desired sequence with
# of slots equal to # of jobs.
2. Select smallest processing time at either process. If that time
is on process 1, put the job as near to beginning of sequence
as possible.
3. If smallest time occurs on process 2, put the job as near to the
end of the sequence as possible.
4. Remove job from list.
5. Repeat steps 2-4 until all slots in matrix are filled and all jobs
are sequenced.
Dr. Loomba
Class Notes
Chapter 17
17-12
Johnson’s Rule
JOB
PROCESS 1
PROCESS 2
A
B
C
D
E
6
11
7
9
5
8
6
3
7
10
A
E
B
D
C
Johnson’s Rule
E
E
A
5
A
D
D
11
B
C
B
Process 1
(sanding)
C
20
31
38
Idle time
E
5
A
15
D
23
B
30
Process 2
(painting)
C
37
41
Completion time = 41
Idle time = 5+1+1+3=10
Dr. Loomba
Class Notes
Chapter 17
17-13
Monitoring
• Work package
• Shop paperwork that travels with a job
• Gantt
G tt Chart
Ch t
• Shows both planned and completed activities against a
time scale
• Input/Output Control
• Monitors the input and output from each work center
Gantt Chart
Job 32B
Behind schedule
Facility
3
Job 23C
Ahead of schedule
2
Job 11C
Job 12A
On schedule
1
1
Key:
2
3
4
5
6
8
Today’s Date
9
10
11
12
Days
Planned activity
Completed activity
Dr. Loomba
Class Notes
Chapter 17
17-14
Gantt Charts & Assignment Method
• Gantt Chart
• Load chart shows the loading and idle times of
departments, machines, or facilities
• Displays relative workloads over time
• Schedule chart monitors jobs in process
• All Gantt charts need to be updated frequently
• Assignment Method
• A special
i l class
l
off lilinear programming
i models
d l th
thatt
assign tasks or jobs to resources
• Objective is to minimize cost or time
• Only one job (or worker) is assigned to one machine (or
project)
Input / Output Control
PERIOD
Planned input
Actual input
Deviation
Planned output
Actual output
Deviation
Backlog
30
Dr. Loomba
1
2
3
4
TOTAL
65
65
70
70
75
75
75
75
270
0
0
300
0
0
20 10
Class Notes
5
0
Chapter 17
17-15
Input / Output Control
PERIOD
Planned input
Actual input
Deviation
Planned output
Actual output
Deviation
Backlog
30
1
2
3
4
65
60
-5
75
75
-0
15
65
60
-5
75
75
-0
0
70
65
-5
75
65
-10
0
70
65
-5
75
65
-10
0
TOTAL
270
250
-20
300
280
-20
Advanced Planning and Scheduling
Systems
• Infinite scheduling - assumes infinite capacity
• Loads without regard to capacity
• Then levels the load and sequences jobs
• Finite scheduling - assumes finite (limited) capacity
• Sequences jobs as part of the loading decision
• Resources are never loaded beyond capacity
Dr. Loomba
Class Notes
Chapter 17
17-16
Advanced Planning and Scheduling
Systems
• Advanced planning and scheduling (APS)
• Add
Add-ins
ins to ERP systems
• Constraint-based programming (CBP) identifies a
solution space and evaluates alternatives
• Genetic algorithms based on natural selection
properties of genetics
• Manufacturing execution system (MES) monitors
status usage
status,
usage, availability
availability, quality
Advanced Planning and Scheduling
Dr. Loomba
Class Notes
Chapter 17
17-17
Theory of Constraints (TOC)
• Throughput is the number of units processed through the
facility and sold
• TOC deals with the limits an organization faces in
achieving its goals
• Not all resources are used evenly
• Finite scheduling approach
• Concentrate on the” bottleneck” resource
• Synchronize flow through the bottleneck
• Use process and transfer batch sizes to move product through facility
TOC Scheduling Procedure
• Identify bottleneck
• Schedule job first whose lead time to bottleneck is less
than or equal to bottleneck processing time
• Forward schedule bottleneck machine
• Backward schedule other machines to sustain bottleneck
schedule
• Transfer in batch sizes smaller than process batch size
• Specific Steps
Identify the bottleneck constraints
Develop
pap
plan for overcoming
g the constraints
Focus resources on accomplishing the plan
Reduce the effects of constraints by off-loading work or increasing
capacity
5. Once successful, return to step 1 and identify new constraints
1.
2.
3.
4.
Dr. Loomba
Class Notes
Chapter 17
17-18
Bottleneck and Drum-Buffer-Rope
• Bottleneck work centers are constraints that limit output
• Common occurrence due to frequent changes
• Management techniques include:
• Increasing the capacity of the constraint
• Cross-trained
C
t i d employees
l
and
d maintenance
i t
• Alternative routings
• Moving inspection and test
• Scheduling throughput to match bottleneck capacity
• Drum, Buffer, Rope
• Drum
• Bottleneck, beat of the system and provides the schedule or pace
beating to set the pace of production for the rest of the system
• Buffer
• inventory necessary to keep constraints operating at capacity
• placed in front of the bottleneck to ensure it is always kept busy
• determines output or throughput of the system
• Rope
• Communication signal; tells processes upstream when they should
begin production
• provides the synchronization necessary to pull units through the system
Synchronous Manufacturing
A
B
C
D
B3 1 7
C3 2 15
D3 3 5
B2 2 3
C2 1 10
D2 2 8
B1 1 5
C1 3 2
D1 3 10
Key:
Dr. Loomba
Item i
Operation j of item i performed
Ij k l at machine center k takes l
minutes to process
i
Class Notes
Chapter 17
17-19
Synchronous Manufacturing
Demand = 100 A’s
Machine setup time = 60 minutes
MACHINE 1 MACHINE 2 MACHINE 3
B1
B3
C2
Sum
5
7
10
22
B2
C3
D2
3
15
8
26*
C1
D3
D1
2
5
10
17
* Bottleneck
Synchronous Manufacturing
Setup
Machine 1
C2
Setup
B1
2
B3
1002
1562
2322
Idle
Setup
Machine 2
C3
B2
12
1512
Machine 3
Setup
C1
0 200
Dr. Loomba
Setup
D2
1872
2732
Setup
D1
Idle
1260
Class Notes
D3
1940
Completion
time
Chapter 17
2737
17-20
Employee Scheduling
•
Employee Scheduling
•
•
•
•
•
Labor is very flexible resource
Scheduling workforce is complicated, repetitive task
Assignment
g
method can be used
Heuristics are commonly used
Employee Scheduling Heuristic
1.
2.
3.
4.
5.
Let
N = no. of workers available
Di = demand for workers on day i
X = day working
O = day off
Assign the first N - D1 workers day 1 off. Assign the next N - D2
workers day 2 off. Continue in a similar manner until all days are
have been scheduled
If number of workdays for full time employee < 5, assign remaining
workdays so consecutive days off are possible
Assign any remaining work to part-time employees
If consecutive days off are desired, consider switching schedules
among days with the same demand requirements
Employee Scheduling
DAY OF WEEK
MIN NO. OF
WORKERS REQUIRED
M
T
W
TH
F
SA
SU
3
3
4
3
4
5
3
Taylor
Smith
Simpson
Allen
Dickerson
Dr. Loomba
Class Notes
Chapter 17
17-21
Employee Scheduling
DAY OF WEEK
MIN NO. OF
WORKERS REQUIRED
Taylor
Smith
Simpson
Allen
Dickerson
M
T
W
TH
F
SA
SU
3
3
4
3
4
5
3
O
O
X
X
X
X
X
O
O
X
X
X
X
X
O
O
O
X
X
X
X
X
O
X
X
X
X
X
X
X
X
X
X
O
O
Completed schedule satisfies requirements but has no
consecutive days off
Employee Scheduling
DAY OF WEEK
MIN NO. OF
WORKERS REQUIRED
Taylor
Smith
Simpson
Allen
Dickerson
M
T
W
TH
F
SA
SU
3
3
4
3
4
5
3
O
O
X
X
X
O
O
X
X
X
X
X
O
X
X
X
X
O
O
X
X
X
X
X
O
X
X
X
X
X
X
X
X
O
O
Revised schedule satisfies requirements with consecutive
days off for most employees
Dr. Loomba
Class Notes
Chapter 17
17-22
Automated Scheduling Systems
• Staff Scheduling
• Assign workers to standardize shift patterns
• Schedule Bidding
• Workers bid for certain shift positions or schedules
• Schedule Optimization
• Creates demand-driven forecast of labor needs
• Assigns workers to variable schedules
• Uses mathematical programming and artificial
intelligence techniques
Dr. Loomba
Class Notes
Chapter 17
17-23
Criteria
Ratings
Pts
5 pts
4 pts
2 pts
Identifies and
Summarizes
issue at hand
Identifies not only the basics
of the issue, but recognizes
nuances of the issue
Identifies the main issue and
subsidiary, embedded, or
implicit aspects of the issue
Does not identify and summarize the
issue, is confused or identifies a
different or inappropriate issue
5 pts
Personal and
other salient
perspectives
and positions
5 pts
Addresses and
analyzes salient
perspectives from
experience and
information from
outside sources.
4 pts
Identifies,
appropriately,
one's own
position and/or
other salient
perspectives on
the issue
3 pts
Address a single source or
view of the argument and
fails to clarify presented
position relative to one's
own and/or other salient
perspective
2 pts
Fails to address even a single
source or view of the argument
and fails to clarify presented
position relative to one's own
and/or other salient
perspective
5 pts
5 pts
Quality of
evaluation
and analysis
Observes cause and effect and addresses
existing or potential consequences. Clearly
distinguishes between fact, opinion, and
acknowledges value judgments
4 pts
Examines the evidence and
source of evidence, questions
its accuracy, precision,
relevance, and completeness
2 pts
Merely repeats information
provided, taking it as truth
or denies evidence without
adequate justification
5 pts
3 pts
Conclusions,
implications,
and
5 pts
Objectively
reflects upon
4 pts
Identifies and discusses
conclusions,
implications, and
consequences
Identifies and discusses
conclusions, implications, and
consequences but only
superficially
2 pts
Fails to identify
conclusions, implications,
and consequences of the
issue
5 pts
consequences
own
assertions
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