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Introduction to Materials Management. Chapter 5 – Capacity Management. Basic Capacity Definitions. Capacity Required – capacity needed to produce a desired output in a given time period Capacity Planning – determining the resources and methods needed to meet the priority plan

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introduction to materials management

Introduction to Materials Management

Chapter 5 – Capacity Management

basic capacity definitions
Basic Capacity Definitions
  • Capacity Required – capacity needed to produce a desired output in a given time period
  • Capacity Planning – determining the resources and methods needed to meet the priority plan
  • Capacity Control – monitoring production, comparing with the capacity plan, and taking appropriate corrective actions
  • Capacity Management – determining capacity needed as well as providing, monitoring, and controlling the capacity
capacity planning levels
Capacity Planning Levels
  • Resource Planning – Long range resource requirements linked to the production plan
  • Rough-cut Capacity Planning – Used to check feasibility of MPS
  • Capacity Requirements Planning – Detailed work center capacity plans linked to MRP
capacity planning levels1
Capacity Planning Levels

Figure 5.2 Planning levels

capacity requirements planning inputs
Capacity Requirements PlanningInputs
  • Open Order File – found as scheduled receipts on MRP
  • Planned order releases from MRP – Potential future orders
  • Work Center file
    • Information on capacity in the work center
    • Move, wait, and queue time information
capacity requirements planning inputs continued
Capacity Requirements PlanningInputs - Continued
  • Routing file – the path that the work will follow
    • Operations to be performed
    • Operation sequence
    • Work centers used
    • Potential alternative work centers
    • Tooling needed
    • Standard setup times and run times
sample routing file
Sample Routing File

Figure 5.3 Routing file

capacity available
Capacity Available
  • Impacted by:
    • Product specification
    • Product mix
    • Methods used to make product
    • Pace of work
finding capacity available
Finding Capacity Available
  • Rated Capacity = (available time) x (utilization) x (efficiency)
    • Available time – number of hours a work center can be used
    • Utilization = [(hours worked)/(available hours)] x 100%
    • Efficiency = [(actual production rate)/(standard production rate)] x 100%
capacity load sum of all time required for orders on a work center example
Capacity Load – Sum of all time required for orders on a work centerExample

Figure 5.5 Work center load report

scheduling orders
Scheduling Orders
  • Back scheduling (the typical approach) – Start with the due date, use lead time to find the proper start date for each operation
  • Forward scheduling – Launch the order into the first (gateway) work center, then use the lead times to find when the order will be completed at each work center
managing the plan adjusting capacity
Managing the Plan – Adjusting Capacity
  • Use Overtime or Undertime
  • Adjust the number of workers
  • Shift workers from other work centers
  • Use alternative work centers to shift load
  • Subcontract work