Production Activity Control

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Production Activity Control

Chapter 6

“The time comes when plans must be put into action”



Production Activity Control• Responsible for executing the:

– Master Production Schedule (MPS)– Materials Requirements Plan (MRP)

• At the same time:– Make good use of labor, machines and materials– Minimize work-in-process inventory– Maintain customer service



Production Activity Control

• Release work orders

• Control work orders to complete on time

• Control the flow of work– Through manufacturing– Carrying out the plan– To completion

• Manage day-to-day activity and provide support



Production Planning

MasterProductionScheduling

MaterialRequirements

Planning

Production ActivityControl

Purchasing

Input/OutputControl

Operation

Sequencing

Planning

Implementand

Control

Figure 6.1 Priority planning and production activity control



Planning

• To meet delivery dates

• Ensure:– The required materials, tooling, personnel and

information

• Schedule:– Start and completion times for each shop order– Develop load profiles for the work centres`



Implementation

• Gather information needed to make the product

• Release orders to the shop floor– MRP authorized

“Dispatching”



Control

• The production order has been released

• Is corrective action necessary?– Rank the orders by priority– Establish a dispatch list– Track performance to planned schedule– Replan, reschedule, adjust capacity– Monitor and control WIP, lead times, cues– Report work center effciency, scrap, times



Feedback

PRODUCTION ACTIVITY CONTROL

PLANScheduleReplan

CONTROLCompareDecide

EXECUTEWork

Authorization

Dispatch

MANUFACTURING OPERATIONS

Figure 6.2 Production control system



Manufacturing Systems

• Flow manufacturing

• Intermittent manufacturing

• Project manufacturing



Flow Manufacturing

• High volume

• Standard products– Repetitive or– Continuous



Flow Manufacturing

• Routings are fixed– Work centers arranged according to the routing

• Dedicated to a limited range of products– specifically designed equipment

• Use of mechanical transfer devices– Low WIP and throughput times

• Capacity is fixed by the line



Flow Manufacturing

• Production Activity Control– Plans the flow of work– Planned schedule of materials to the line– Implementation and control are relatively

simple



Intermittent Manufacturing

• Many variations in:– product design– process requirements– order quantities




• Flow of work is varied - work flow not balanced

• Machinery and workers must be flexible– Usually grouped according to function

• Throughput times are generally long

• Capacity required depends on product mix




• Production Activity Control is complex:– number of products made– variety of routings– scheduling problems– PAC is a major activity

• Controlled through shop orders for each batch



Project Manufacturing

• One or a small number of units

• Usually in one place

• Close coordination between:– Manufacturing, Marketing, Purchasing,

Engineering

• Examples:– Shipbuilding– House construction



Data Requirements

• Need to know:– What and how much to produce– When parts are needed– What operations and times are required– Work center capacities

• Organized into databases:

– Planning or Control



Planning Files

• Item master file

• Product structure file

• Routing file

• Work center master file



Item Master File

• Part number

• Part description

• Manufacturing lead

time

• Lot size quantity

• Quantity on hand

• Quantity available

• Allocated quantity

– already assigned to

other work orders

• On-order quantities



Product Structure File

• Bill of material file– A listing of single-level components to make an

assembly– Forms a basis for a ‘pick list’



Routing File

• Step-by-step instructions on how to make the product– Operations and their sequence– Operation descriptions (brief)– Equipment tools and accessories– Operation setup times– Operation run times– Lead times for each operation



Work Center Master File

• Details on each work center– Work center number– Capacity– Shifts, machine hours and labor hours per week– Efficiency– Utilization– Average queue time– Alternative work centers



Control Files

• Shop order master file– Summarized data on each shop order

• Shop order detail file– Current record of each operation



Shop Order Master File

• Shop order number• Order quantity• Quantity completed• Quantity scrapped• Quantity of material

issued to the order• Due date• Priority• Balance due• Cost information



Shop Order Detail File

• Operation number

• Setup hours planned and actual

• Run hours planned and actual

• Quantity complete (at this operation)

• Quantity scrapped (at this operation)

• Lead time remaining



Order Preparation

• A check for available:– Tooling– Materials– Capacity - when it is needed



Scheduling

• To meet delivery dates

• Make the best use of resources

• Need information on:– Routing– Capacity– Competing jobs– manufacturing lead times



Manufacturing Lead Time

• Queue - time spent waiting before operation

• Setup - time to prepare the work center

• Run - time to make the product

• Wait - time spent after the operation

• Move - transit time between work centers



Manufacturing Lead Time

Queue Setup Run Wait

Move

Queue Setup Run WaitMove

Need a lift truck here



Cycle Time

• “The length of time from when material enters a production facility until it exits”

– APICS Dictionary 11th Edition

• Synonym - throughput time



Example Problem

Work Center A operation time = 30 + (100 x 10) = 1030 minutesWait time = 240 minutesMove time from A to B = 10 minutesWork Center B operation time = 50 + (100 x 5) = 550 minutesWait time = 240 minutesMove time from B to stores = 15 minutesTotal manufacturing lead time = 2085minutes

= 34 hours, 45 minutes



Scheduling Techniques

• Forward Scheduling– Start when the order is

received

– May finish early

– Used to determine the earliest completion date

– Determine promise dates

– Builds inventory

• Backward Scheduling– Uses MRP logic

– Schedule last operation to be complete on the due date

– Schedule previous operations back from the last operation

– Reduces inventory



Order Recieved Due Date

Forward Scheduling

Backward Scheduling

1 2 3 4 5 6 7 8 9

Figire 6.4 Infinite load profile

Forward and Backward Scheduling:Infinite Load

MaterialOrdered

3rdOperation

1st Operation

2ndOperation

MaterialOrdered

3rdOperation

1st Operation

2ndOperation



Capacity

Capacity Underload

Capacity Overload

Figure 6.5 Infinite load profile

Infinite Load Profile



Order Recieved Due Date

Forward Scheduling

Backward Scheduling

1 2 3 4 5 6 7 8 9

Figure 6.6 Forward and Backward scheduling: finite load

Forward and Backward Scheduling:Finite Load

MaterialOrdered

3rdOperation

1st Operation

2ndOperation

MaterialOrdered

3rdOperation

1st Operation

2ndOperation



Capacity

Figure 6.7 Finite load profile

Smoothed Load

Finite Load Profile



Example Problem Backward Scheduling

• A company has an order for 50 brand X to be delivered on day 100

• Only one machine is available for each operation

• The factory works one 8 hour shift 5 days a week

• The parts move in one lot of 50

Part Operation TimeA 10 5

20 3B 10 10X Assembly 5

X

A B



85 90 95 100

X

AssemblyPart B

Part A

Working Days

Example Problem Answer

OP 10 OP 20

OP 10



Operation Overlapping• The next operation is allowed to begin

before the entire lot is completed

• Reduces the manufacturing lead time

• Order is divided into at least two transfer lots

SU Lot 1 Lot 2

Operartion A

SU Lot 1 Lot 2

Operation B

T T Transfer Time



Operation Overlapping

• Costs involved:

• Handling costs between work centers

• May increase queue and wait for other orders

• Idle time if the second batch doesn’t arrive in time



Size of the Transfer BatchSUA = Set up time operation A

SUB = Set up time operation B

RTA = Run time per piece operation A

RTB = Run time per piece operation B

QT = Total order size

T1 = size of the first transfer batch

T1 = QT x RTA - SUB T2 = QT - T1

RTA + RTB



Size of the Transfer Batch

• If the second operation is slower than the first make the first transfer batch small– i.e. get the slower machine started early

• If the second machine is faster than the first make the first transfer batch large– i.e. the second machine will be able to catch up



Example Problem

30 70 x 10 = 700 30 x 10 = 300

Operartion A

50 70 x 5 = 350 30x5 = 150

Operation B

T T Transfer Time

0 30 730 1,000 (Minutes)

740 790 1140 1290

1,010

Stores 1305



Operation Splitting

• Reduces manufacturing lead time

• The order is split into at least two lots

• Similar machines are run simultaneously

• Setup time is low compared to run time

• Operators can run more than one machine



Operation Splitting

SU Run

SU Run

SU Run

One Machine

Two Machine Operation Splitting

Reduction in Lead Time

Figure 6.9 Operation splitting



Load Leveling

• Load Report

• Tells PAC the current and upcoming load on a work center

• Based on standard hours of operation for each order



Load ReportWork Center: 10 Available Time: 120 Hours per weekDescription: Lathes Efficiency: 115%Number of Machines: 3 Utilization 80%Rated Capacity: 110 standard hours / wk

Week 18 19 20 21 22 23 Total

ReleasedLoadPlanned Load

105 1008060

3080

0130

080

315350

Total Load 105 100 140 110 130 80 665

RatedCapacity

110 110 110 110 110 110 660

(Over) /UnderCapacity

5 10 (30) 0 (20) 30 (5)

Figure 6.10 Work centre load report



Scheduling Bottlenecks

• Some workstations are overloaded and some are underloaded

• Bottlenecks– “a facility, function, department, or resource

whose capacityis equal to or less than the demand put upon it.”

APICs Dictionary 11th Edition



Throughput

• The total volume of product passing through a facility

• Bottlenecks control the throughput– Work centers feeding bottlenecks will build

inventory – Work Centers fed by bottlenecks have their

throughput controlled by the bottleneck



Example Problem - Bottlenecks

• Wagon Wheel Assembly - 1200 sets (2) per week• Handle Assembly - 450 per week• Final Assembly - 550 wagons per week

a. What is the capacity of the factory?

b. What limits the throughput of the factory?

c. How many wheel assemblies should be made?

d. What is the utilization of the wheel assembly?

e. What happens if utilization is 100%



Example Problem - Bottlenecks

a. 450 units per week

b. Throughput is limited by the handle assembly operation

c. 900 wheel assemblies per week

d. Utilization of the wheel assemblies =

900 ÷ 1200 = 75%

e. Excess inventory of wheel assemblies



Bottleneck Principles (7)1. Utilization of a non-bottleneck resource is not determined

by its potential, but by another constraint in the system.

2. Utilization of a non-bottleneck 100% of the time does not produce 100% utilization.

3. The capacity of the system depends on the capacity of the bottleneck.

4. Time saved at a non-bottleneck saves the system nothing.

5. Capacity and priority must be considered together.

6. Loads can and should be split.

7. Focus should be on balancing the flow in the shop.



Managing Bottlenecks

1. Establish a time buffer before each bottleneck.

2. Control the rate of material feeding the bottleneck.

3. Do everything to provide the bottleneck with capacity.

4. Adjust loads.

5. Change the schedule.

Back schedule before the bottleneck; forward schedule after the bottleneck.



Theory of Constraints

• 1. Identify the constraint

Process 15 per hour

Process 27 per hour

Process 34 per hour

Process 49 per hour

Marketing sells5 per hour?

Figure 6.11



Theory of Constraints continued

2. Exploit the constraint. (idle time?)

3. Subordinate everything to the constraint.

4. Elevate the constraint.

5. Once the constraint is a constraint no-

longer, find the new one and repeat the

steps.



Drum-Buffer-Rope

• Drum - pace of production set by the

constraint

• Buffer - inventory established before the

constraint

• Rope - coordinated release of material



Example Problem

Work Center 20: Capacity = 40 hours per week

Y: Setup = 1 hour, Run Time = .3 hours per piece

Z: Setup = 2 hours, Run Time = .2 hours per piece

Let x = the number of Y’s and Z’s to produce

1 + 0.3x + 2 + .2x = 40 hours

0.5x = 37 hours

x = 74 (you can produce 74 Y’s and 74 Z’s)

X

Y Z



Implementation

• Issuing shop orders to manufacturing

• Which have a good chance of being completed on time

• Orders which have the:– tooling– material– capacity



Shop Order Information

• Order number,

description

• Engineering Drawings

• Bills of Material

• Route Sheets

• Material Issue Tickets

• Tool Requisitions

• Job Tickets

• Move Tickets



Review Order

Check Toolingand MaterialAvailability

Check CapacityRequirementsand Availability

Release Order

Okay?

Okay?

ResolveNo

Yes

Resolveor

Reschedule

No

Yes

Figure 6.12Order ReleaseProcess



Control

• Control the work going into and out of a work center: Input/output control

• Set the priority of orders to run at each work center



Input / Output ControlInput Rate

Control

Output RateControl

Queue(Load, WIP)

Figure 6.13Input/output control



Work Center: 201Capacity per period: 40 standard hours

Period 1 2 3 4 5 Total

Planned Input 38 32 36 40 44 190

Actual Input 34 32 32 42 40 180

Cumulative Variance -4 -4 -8 -6 -10 -10

Planned Output 40 40 40 40 40 200

Actual Output 32 36 44 44 36 192


Planned Backlog 32 30 22 18 18 22

Actual Backlog 32 34 30 18 16 20

Figure 6.14 Input/output report



Cumulative Variance

• The difference between the total planned for a given period and the actual total for that period

• Cumulative variance

= previous cumulative variance + actual

- planned



Work Center: 201Capacity per period: 40 standard hours

Period 1 2 3 4 5 Total

Planned Input 38 32 36 40 44 190

Actual Input 34 32 32 42 40 180


Planned Output 40 40 40 40 40 200

Actual Output 32 36 44 44 36 192


Planned Backlog 32 30 22 18 18 22

Actual Backlog 32 34 30 18 16 20

Figure 6.14 Input/output report

Cumulative variance week 2 = -4 + 32 -32 = -4



Example Problem: Input/OutputWeek 1 2

Planned Input 45 40

Actual Input 42 46

Cumulative Variance

Planned Output 40 40

Actual Output 42 44

Cumulative Variance

Planned Backlog 30

Actual Backlog 30



Operations Sequencing

• “a technique for short term planning of actual jobs to be run in each work center based on capacities and priorities.”

APICS Dictionary 11th Edition

• Priority: The sequence in which jobs should run at a work center



Dispatching

• Selecting and sequencing jobs to be run at a work center

• Dispatch list• Plant, department, work center

• Part number, shop order number, operation number and description

• Standard hours

• Priority information

• Jobs coming to the work center



Dispatching Rules

• FCFS - First come, first served

• EDD - Earliest job due date

• ODD - Earliest operation due date

• SPT - Shortest processing time

• CR - Critical ratio



Critical Ratio

CR= due date - present date

lead time remaining

= actual time remaining

lead time remaining

CR<1 Behind Schedule

CR=1 On Schedule

CR>1 Ahead of Schedule

CR<0 Already late



Sequencing RuleJob

ProcessTime(days)

ArrivalDate

DueDate

OperationDue Date FCFS EDD ODD SPT

A 4 223 245 233 2 4 1 3

B 1 224 242 239 3 2 2 1

C 5 231 240 240 4 1 3 4

D 2 219 243 243 1 3 4 2

Figure 6.16 Application of sequencing rules

Sequencing Rules



Production Reporting

• Feedback of what is actually happening on the shop floor

• Needed for management decisions

on-hand on-order

job status shortages

scrap material shortages



Production Activity Control Summary

• Converting MRP plans into action– Reporting results– Revising plans

• Need:– detailed and current schedules and priorities

• Results:– on-time deliveries, well utilized labor, and

equipment, minimum inventory levels

Production Activity Control

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