Chapter 8 Production Activity Control

1. Chapter 8Production Activity Control

2. Production Activity Control Production Activity Control (PAC) concerns the execution of material plans. A number of MPC activities, including Shop-floor Scheduling and Control (SFC), Vendor Scheduling and Follow-up, Order Release, and Purchasing fall partly or completely within the realm of Production Activity Control.

3. Production Activity Control in the MPC System Resource planning Sales and operations planning Demand management Master production scheduling Detailed capacity planning Detailed material planning Material and capacity plans Order release Purchasing Production activity control Shop-floor scheduling and control (SFC) Vendor scheduling and follow-up

4. System Links–MPC and Production Activity Control

5. Just-in-Time (JIT) Effect on PAC • Formal systems for shop-floor control are largely unnecessary under JIT • PAC functions are simplified • Order release through kanbans or other pull system • Limited work-in-process inventories • Detailed scheduling is not needed • No data collection or monitoring requirements–only raw material and finished goods inventories • Vendor scheduling may be more complex under JIT

6. Production Activity Control and Company Environment • The primary PAC objective is managing material flows to meet MPC plans • Other objectives may pertain to efficient use of capacity, labor, tools, time, or materials • Under JIT the objective is material velocity • PAC objectives reflect the firm’s strategy and competitive position

7. Production Activity Control Techniques

8. Basic Shop Floor Concepts • Routing and lead-time data are essential inputs • Routing specifies the operation, its duration, and the work center performing the work • Lead times typically consist of four elements • Run time • Setup time • Move time • Queue time

9. Operation Setback Chart Part D has three operations Sub-Assembly Finished Product Component parts

10. Lead-Time Management • The four elements of lead time (run, setup, move, and queue) can be compressed with good PAC management • A basic principle of MPC systems is to substitute information for inventory • The knowledge of when an order will arrive at a work center replaces the need to WIP inventory feeding the work center

11. Gantt Charts • Gantt charts show a schedule • Each step listed separately • Relationship between steps portrayed visually

12. Priority Sequencing Rules • Determine which job to run next at a particular work center • When a job is near completion, the available jobs in the queue are evaluated

13. Priority Sequencing Rules • Common rules • Order slack–work on the job with the least total slack • Slack per operation–divide total slack by the number of remaining operations, then work on job with least slack • Critical ratio–calculate (time remaining)/(work remaining) and work on job with lowest ratio • Shortest operation next–work on the job that can be completed most quickly

14. Theory of Constraints (TOC) • TOC focuses effort on bottleneck resources • Bottlenecks limit the capacity of the entire plant • Objective is to maximize throughput • Bottlenecks may be constraints other than work centers • Constraints are identified, buffered with inventory, and their importance is stressed to the entire factory • **** Skip the rest ****

15. Vendor Scheduling and Follow-Up • Objective–align orders with due dates • Vendor must have continually updated information concerning priorities • Contractual agreements may limit the type and degree of change the vendor must accommodate • Use of the Internet can enhance the speed and efficiency of information exchange

16. Principles • Production activity control system design must be in concert with the firm’s needs. • Vendor capacities should be planned and scheduled with as much diligence as internal resources. • Lead times must be managed. • Feedback from the PAC should provide both status and early warning information to other MPC modules

17. Principles • E-based systems can improve communication between customer and vendor, reducing lead time and overhead. • TOC scheduling provides improved performance by focusing on the constraining resources. • TOC implementation requires a change in culture. • Traditional priority rules can play a role in scheduling non-bottleneck resources. • Stability in manufacturing loads and capacity plans facilitates shop-floor execution.

18. Chapter 8AAdvanced Scheduling

19. Advanced Scheduling Detailed scheduling of individual jobs through work centers in a shop has been the focus of numerous researchers. Focusing on some basic concepts and results and relating them to some newer manufacturing approaches can show how to apply results in different operating situations.

20. Scheduling Research Framework • A schedule is a plan for the sequence of time allotted for and operations necessary to complete an item • The schedule has several inputs • Sequential constraints • Time estimates for each operation • Required resources for each operation

21. Scheduling Research

22. The One-Machine Case • Problem of how to best schedule a fixed set of jobs through a single machine • All jobs are available at the start of the period • Setup times are independent of the sequence • Objectives • Minimize total time–all sequences are equal • Minimize average time–process shortest jobs first • Minimize average number of jobs in the system–process shortest jobs first

23. The Two-Machine Case • More complex than the one-machine case • Must consider job routings • Minimum total time (make span) depends upon sequencing • Two-machine case can be used as an approximation of the M-machine problem (where M > 2)

24. Dispatching Approaches • Dispatching approaches allow analysis of dynamic problems (where randomness in inter-arrival times and service times are considered) • Uses logic rules to guide the prioritizing of jobs at a work center (sequencing rules) • Often uses simulation methodology to study realistic problems

25. Sequencing Rules • Sequencing rules provide guidelines to the wide range of possible sequencing options • With n jobs and m machines, there are (n!)m possible ways to schedule the system

26. Sequencing Rules • Random–pick any job with equal probability. Used as a benchmark for other rules. • First-come/first-served–jobs are processed in the order they arrive • Shortest processing time–reduces work-in-process, average completion time, and average lateness • Earliest due date–often works well to reduce job lateness • Least work remaining–considers all remaining processing time • Least setup–minimizes changeover time on the machine and maximizes capacity utilization

28. Due Date-Setting Procedures • Establishing order release and due dates is critical in many firms • Due dates often must be set at the time of order entry • Estimating manufacturing time is a key function • Calculating lead times on the basis of total work content is often best

29. Dynamic Due Dates • Maintaining valid due dates as system parameters change is also important • Dynamic due dates allow updating of open order due dates • May lead to system “nervousness” • Can cause shop floor employees to distrust the system • Can improve customer service and reduce total inventory

30. Labor-Limited Systems • Useful when labor is the bottleneck resource • Three major elements for controlling workflow • Determining which job to do next at the work center • Determining when a person is available for transfer to another work center • Determining the work center to which an available person is to be assigned • Research shows the importance of cross-training and labor assignment flexibility • Both labor and job dispatching can have a major impact in controlling work flow

31. Group Scheduling and Transfer Batches • Theory of Constraints scheduling uses different batch sizes for bottleneck and non-bottleneck work centers • Repetitive lots concept–original order quantities released to the floor can be split into smaller transfer batches • Gives work centers the flexibility to start producing an order before the previous work center is completely done with the job • Reduces flow times, improves utilization, cuts setup times, and smoothes work flow

32. Principles • It is important to determine the objective(s) of scheduling before selecting an approach. • Shortest processing time sequencing rule can provide effective performance and should be considered a standard in designing shop-floor systems. • Flexibility is introduced into scheduling through alternative routings, labor assignment adjustments, the use of transfer batches, and overlap scheduling. Flexibility can lead to great improvements. • Setting and managing due dates is an important scheduling activity. • Due date filtering procedures should be used to reduce shop-floor nervousness.