SCO 3056 exam 2

How to schedule new orders on the bottleneck operations

Calculate the earliest start time on the first constraint by adding the processing time before the constraint to the raw material lead time and the first constraint buffer time Place the order after and as close as possible to the earliest start time on the constraint Calculate the earliest start time on the next constraint by adding the processing time after the first constraint and the next buffer time to the completion time on the current constraint

Choice of capacity planning units can lead to more effective use of the system because

Can be grouping of key resources or work centers/key areas Dictate the diameter of manufacturing pipelines Only as much material can be produced as there is capacity for its production, regardless of the material plan

4 capacity planning and control techniques

Capacity planning using overall factors Capacity bills Resource profiles Capacity requirements planning

Vendor managed inventory

Cost of carrying inventory is born by suppliers who are paid for their goods either as they leave the hub or as they are backflushed into finished goods at the customer

How to choose a capacity measure

Creatively identify resources that are critical and in short supply Define the unit of measure Estimate available capacity Make the choice of capacity measure following directly from the objective of providing capacity to meet plans

What is APS criterion?

Criterion is to respect the schedules for the end products, not to optimize work center utilization

_______________ internal fabrication and _________________ emphasis on outsourcing

Decreased, increased

What types of demand are used for calculating explosion?

Dependent demand Independent demand

Two card kanban system

Each container of parts must have a kanban card The parts are always pulled, the using department must come to the providing department No parts may be obtained without a conveyance kanban card All containers contain their standard quantities and only the standard containers for the part can be used No extra production is permitted, production is only started on receipt of a production kanban card

What do effective shop floor procedures do for capacity?

Effective shop floor procedures utilize available capacity to process orders according to MRP system priorities, provide insight into potential capacity problems ST, and respond to changes in material plans

Features of JIT

Elimination of discrete manufacturing batches in favor of production rate goals Reduction of WIP inventories Production schedules where all products are made all the time Visual control systems where workers build the products and execute the schedule without paperwork or complex overhead support Direct ties to vendors who deliver high-quality good frequently

Primary objectives of capacity planning techniques

Estimation of capacity requirements Execution of the capacity plans

The hidden factory

-2 factories: one makes products and other other processes transactions on papers and computer systems -Hidden factory: the factory that processes transactions, has been decreasing in cost

What does APS allow for visually?

-APS systems typically provide the ability to look at the schedules visibly to allow manual intervention and thereafter to see the resultant effect throughout the company -Outputs are often displayed as schedule boards -Systems are linked to spreadsheet modules to allow users to examine the implications of various choices/schedule changes

Benefits of POQ (lecture)

-Allows us to get more in sync with actual demand pattern -Still placing the same amount of orders but now spreading them out more over the whole year -Brings inventory carrying cost down

TOC Scheduling steps

-Combine data in the BOM file with data in the routing file, that results in a network where each part in the product structure also has its operational data attached directly -Customers orders are linked to the final operation which is linked to previous operations and then to raw materials -Product network and resource descriptions are fed into a set of routines that identify the bottleneck resources -TOC product network is split into two portions: bottleneck resources (forward finite loaded) and nonbottleneck resources (back loaded) -Buffers: TOC buffers the schedules for critical operations at bottleneck operations by using both safety stock and safety lead time, which provides a cushion against variations adversely affecting the flow of jobs through this machine

Cautions in using fancy lot-sizing procedures

-Fancy lot sizing procedures may or may not be worth the effort: the level of uncertainty is the key, too much uncertainty means these procedures don't work -Safety stock and safety lead times are used to offset the two forms of uncertainty -Avoid enhancements that get too far ahead of the sophistication level of the users

How to reduce causes of changes to the MRP plan

-Introduce stability through freezing and time fences -Reduce the incidence of unplanned demand by incorporating spare parts forecasts into MRP record gross requirements -Follow the MRP plan with timing and quantity of order releases -Control the introduction of parameter changes

How do exception code directly support the MRP planning activity?

-Part numbers for which a planned order is now in the most immediate time period -Open order diagnostics when the present timing or amount for a scheduled receipt is not satisfactory -Indicates problem areas for management

Managing bottleneck capacity

Find bottlenecks and then manage capacity more effectively

Attacks against the hidden factory

Finding ways to significantly reduce the number of transactions Stability and JIT Automation of transactions Eliminating redundancies in data entry Better data entry methods

Net data requirements

-Requirements do not reflect the key independent demand assumptions of a constant uniform demand -Requirements are discrete rather than a date -Requirements can be lumpy -- vary substantially from period to period

Two kanbans vs one

-Two kanbans will handle more variance better than one -Going from one to two kanbans dramatically reduces overtime, but two is enough

Joint-firm JIT

-can lead to greater bottom-line results for both firms and increased competitiveness in the marketplace -Need a scheduling system producing requirements that are reasonably certain -- a stable schedule -Companies should prune their vendor base to be able to work on a truly cooperative basis with the remaining vendors

JIT managerial implications

-changes in information systems to support JIT, sometimes use of extranet -Migration of MPC systems to support new JIT manufacturing processes

CPM and resource planning

-directly linked to SOP module, most highly aggregated and longest-range capacity planning decision. -Involves converting monthly, quarterly, or annual data from SOP plan into aggregate resources -Involved new capital expansion, bricks and mortar, machine tools, warehouse space, and requires a time horizon of months or years.

Advantages and downsides of CRP

-downsides: Only calculates capacity required to complete the MPS -advantages: Improved accuracy in timing capacity requirements -- most important in the most immediate time periods

3 PAC Techniques

-gantt chart -priority sequencing rules TOC scheduling

Reducing MRP system nervousness

-reduce causes of changes to the MRP plan -selective use of lot-sizing procedures -use firm-planned orders in the MRP records

Categories of uncertainty

-supply and demand -quantity and timing

Finite capacity schedulintg

Finite scheduling will determine which jobs will be completing, according to how the jobs and scheduled. Simulates actual job order starting and stopping times to produce a detailed schedule for each shop order and machine center -- loads all jobs in all necessary work centers for the length of the planning horizon

TOC steps

First determine the bottleneck work centers Then try to find the quick solutions for bottlenecks Finally scheduling should concentrate on best managing bottleneck capacity Don't utilize capacity in nonbottlenecks work centers, the work will be done easily because there is basically no constraint

Problems with using EOQ

Fixed EOQ lot sizes result in a mismatch between order quantities and requirements values We must increase the order quantities in those periods where the requirements exceed the economic lot size plus the amount of inventory carried over from the last period Use of average weekly requirements figure ignores much of other information in the requirements schedule

Selective use of lot-sizing procedures

Fixed order quantities at the top level, FOQ or lot for lot at the intermediate level, and period order quantities at the bottom level

What should be the focus of APS systems

Focus on improving time estimates as much as possible and thereafter focus on flawless execution and recovery from any problems. Frequently reschedule when there are errors.

MRP-JIT separation

For JIT products, it is necessary to first establish a MPS, which typically is rate based. This MPS is then passed to a JIT planning and execution subsystem that utilizes simplified BOMs and cellular manufacturing, and also passed to JIT suppliers.

Production pitch

Full-mix production in a short interval provides less inventory buildup in each model

What does APS produce?

APS will schedule all MPS quantities, producing an overall capacity profile and detailed schedules for each work center.

What is the advantage of the TOC product network being split into two portions?

Advantage is that we can readily see where attention should be focused and can utilize bottleneck capacity more intensively through finite scheduling

Timing assumptions for MRP

All requirements for each period must be available at the beginning of the period All requirements for future periods must be met and can't be back ordered Ordering decisions occur at regular time intervals The requirements are properly offset for lead times Component requirements are satisfied at a uniform rate during each period so we use average inventory level in computing inventory carrying costs

What measures are becoming more important?

Are we getting the whole job done to meet customer expectations

How is availability achieved in MRP?

Availability is achieved by having the item in inventory or by receiving either a scheduled receipt or a planned replenishment order in time to satisfy the gross requirement

Two basic inputs for MRP

BOM and inventory status

Product structure diagram and indented BOM

BOM shows what is needed for the finished product, structure diagram shows which subparts are needed for which parts

Data needed for CRP

BOM, routing, time standards, lead times, info on MRP planned orders and current status of open shop orders at individual work centers

Lecture: Method 5: Input/output analysis

Backlog decouples input from output allowing smoothing at some planned level

Basic trade off of lot sizing

Basic trade-off involves elimination of one or more setups at the expense of carrying inventory longer

Why don't MRP modules show all scheduled receipts?

Because a planned order isn't launched yet -- once it's launch, then the receipt is added.

Why is CPOF common?

Because data required is minimal

Benefits of APS

Benefits: faster production, lower work in process inventories, faster response to market conditions

When do buffers exist in TOC?

Buffers exist at all the bottleneck work centers and the shipping dock, but not at nonbottleneck work centers. Used to protect the throughput of the bottleneck work centers from the inevitable minor fluctuations through the use of time buffers at a relatively few critical points in the plant -- move material as quickly as possible through nonbottleneck work centers until it reaches the bottleneck

Advantages of JIT

Greatly reduces the complexity of detailed material planning, the need for shop-floor tracking, work-in-process inventories, and the transactions associated with the shoo-floor and purchasing systems

2 main issues of processing frequency

How frequently the records should be processed Whether all the records should be processed at the same time

Importance of capacity in Shop Floor Control (SFC)

If there is not enough capacity, no SFC system will be able to decrease backlogs, improve delivery performance, or improve output If there is too much capacity, almost any SFC system will achieve material flow objectives Good SFC systems are most useful when dealing with bottlenecks and effective utilization of capacity

Shortest operation next

Ignores all work remaining and due date info. Take as the next job the one that can be completed in the shortest time at the work center. This rule maximizes the number of shop orders that go through a work center and minimizes the number waiting in queue.

JIT main con

In MRP's absence, when JIT takes away the buffers, there are costly disruptions of the manufacturing process, poor customer service, and panic responses to the symptoms rather than the underlying problems

Disadvantages of JIT

Increases cost of a more tightly coordinated manufacturing process both internally and externally

Input/output control isn't necessary in

JIT

Engine impact of JIT

JIT reduces the number of part numbers planned and the number of levels in the BOM Planning at the level of assemblies, using cross-trained workers and cellular manufacturing to eliminate the detailed planning resulting in less complex MPR planning, less planning personnel and reduced flow time

How is the MPS BOM different from the MRP BOM?

MPS follows the full product related to the product family, it's more likely a planning view that is simple and shows the final product to meet the sales and marketing needs. MRP BOM is for engineering, it's more detailed, specific components that have to come together in a certain way to produce the final product.

_______ is the primary info source for rough cut planning

MPS is the primary info source for rough cut planning. Can be estimated by using 'capacity planning using over factors CPOF', capacity bills, or resource profiles that provide info for modifying the resource levels or material plans to meet the MPS.

Where do companies start in developing their MPC systems?

MRP

Rather than choosing lead time, you can calculate lead time based off

MRP lead-time offset data

Information from MPC to SFC

MRP provides info about due dates and quantities for scheduled receipts so correct priorities can be maintained

Inputs required for MRP

MSP inputs Bill of materials Inventory status

How do you reduce the effect of uncertainty in TOC?

Make realistic schedules involving the appropriate level of WIP inventory, capacity utilization attainable, degree of schedule protection, and batch size control

TOC implementation issues

Management needs to recognize that plant culture goes from general utilization to utilization at the critical resources -- do not do work if there is no work to do at a nonbottleneck location Companies need sound basic systems education, top management support, and a willingness to unlearn some ingrained habits

Primary PAC objectives

Managing materials flow to meet MPC plans Efficient use of capacity, labor, machine tools, time, or materials JIT/time-based PAC objective: material velocity

Key aspects of JIT

Manufacturing takes place in facilities, often in cells Jobs are easily kept track of Work is completed quickly Work in process inventory levels are low Work centers have surge capacity or are level loaded Capacity utilization is not a key issue Formal systems for SFC are unnecessary which greatly simplifies PAC functions

How to shorten lead time

Move and queue can be compressed with good PAC design and practice

When is the start of the next bottleneck operation on the same job?

Not scheduled immediately after the current operation is completed, but instead a delay is introduced to perform the buffering here

Buffer yellow zone

Occasionally has missing orders, buffer coordinator should be working to get orders to buffer ASAP

How to exploit the drums

Offload some orders scheduled on the drum to nondrum machines Outsource work to suppliers Working the drums through lunches and breaks, add overtime, increase batch sizes Lot splitting

Continual improvement and labor capacity

One objective in JIT systems is continual improvement so the basis for labor capacity is constantly changing, which requires control procedures for identifying and changing the planning factors as improvements take place

Buffer red zone

Orders scheduled next on the constraint Should rarely have missing orders -- missing orders represent an immediate danger to the drum schedule If red zone is always full, consider reducing buffer size: buffers should only be large enough to ensure delivery performance to the drums

Sources of MRP system nervousness

PLanned orders released prematurely or in an unplanned quantity Unplanned demand and shifts in MRP parameter values

MRP Planner responsibilities

Planners are typically in the production planning, inventory control, and purchasing departments Have responsibility for making detailed decisions that keep material moving through the plant

What activities are typically outsourced?

Procurement analysis, incoming inspection, and engineering liaison, and planning and scheduling capacities in vendor firms

MRP provides information for developing

Provides information for developing capacity plans Links to the systems that actually get the production accomplished

How does the internet improve vendor scheduling?

Quicker delivery response to customers, improved deliver reliability , reductions in operating costs involving purchasing staff costs and inventory Rapid response times Increase of real-time information Websites to communicate with vendors

Back schedule advantages

Reduces work in process Postpones the commitment of raw materials to specific products Minimizes storage time of completed components

Action Programs of a JIT Orientation

Reduction of setup times and lot sizes A "no defects" goal in manufacturing A focus on continual improvement Worker involvement Cellular manufacturing

Buffer green zone

Regularly have orders missing, coordinator should know where orders are and verify that they'll arrive soon

Results of job shop manufacturing

Relatively long lead times High work in process inventories High utilization of work center capacities Capacity utilization is not a key issue

Lot for lot (defined in lecture)

Relaxed EOQ rules, ordering just as much as you need, precise order quantity, the ultimate inflexibility.

Primary actions of the MRP Planner

Release orders (launch purchase or shop orders when indicated by the system) Reschedule due dates of existing open orders when desirable Analyze and update system planning factors Deal with errors Find problems Use system to solve shortage problems Indicate where further system enhancements would make their job easier

Front-end impact of JIT

Require relatively level capacity loading and a rate-based MPS Stable, level, daily-mix schedules Companies are able to respond better to customer orders in an MTO or ATO-like fashion which positively affects demand management

What is the result of finite capacity scheduling?

Result is a set of start and finish dates for each operation at each work center, explicitly establishes a detailed schedule for each job through each work center based on work center capacities and other scheduled jobs

When should a rough-cut approach be used?

Rough-cut approaches are most general, applicable in companies using JIT for shop-floor control so that they can estimate the impact of changes in requirements called for by revisions to the MPS -Vary in accuracy, aggregation level, and ease of preparation -Vary in amount of data and computational time required, and the quality and detail of the capacity requirements estimated

What size batches does TOC run?

Runs large batch sizes at bottleneck operations, reducing time spent in setup downtime Shorter lead times because smaller batches move faster through nonbottleneck work centers Procedures have to be developed to split/join batches as they go through production

Research tells us which sequencing rule seems to work best under most circumstances?

SPT shortest processing time leads to shortest avg time in system and smallest variance of time in system. However, this approach means big jobs get deprioritized again and again

Schedule receipts vs planned order releases

SR represents a commitments whereas the PO is only a plan, so PO is much easier to change

TOC buffers: when is safety lead time introduced?

Safety lead time is introduced between subsequent orders on the same machine

Benefits of Less tightly-coupled JIT supply

Savings in transportation costs Stability and predictability Reduce hidden factory costs

What is the time frame of finite capacity scheduling?

Short term Simulation of how each machine center is to operate on a minute by minute basis for whatever time horizon is planned

Operation setback chart

Shows plans for parts with lead time Shows alternative detailed schedules; early and late

Trends in direct labor

Shrinking as a percentage of overall manufacturing employment Distinctions between direct and indirect are less important Ability to change labor capacity by hiring, firing, and overtime has been reduced because of notions of lifetime employment

Why is it important that the MRP system accomplishes coordination?

So that plans for each part number can be developed independently of the product structures, and plans at each level will be communicated correctly to other levels

Lecture: Method 2 CBP

Starts with BOM or product structure, which tell us capacity at the work center level Looking at time as set up hours and run time Split up products into end products and components More precise, follows BOM/product structure Under what circumstances is the capacity bill procedure better than the CPOF? Uses BOM and routing info to calculate capacity required at each work center Data: MPS, BOM, and routing information

3 common exception codes

Status of part numbers requiring attention in the action bucket Open order diagnostic Parts not available

Transaction processing data accuracy

Strict procedures required for quality control, scrap control, inventory control, ect Small mistakes add up quickly Garbage in, garbage out People must trust the records

Steps for TOC finite forward scheduling

Subtract the shipping buffer and the processing time after the final constraint from the scheduled ship date to provide the latest completion time Place the order on the final constraint (drum) before and as close as possible to the latest completion time Determine the start time on the final constraint by subtracting the processing time on the constraint from the completion time Subtract the final constraint buffer time and the processing time back to the latest completion time of the previous constraint from the final constraint start time Once the material release is determined, the delivery schedule for the raw material can be determined

Effect of TOC on ability to meet MPS

TOC makes an explicit computer-based analysis of the feedback from the engine to the front end, which means that an MPS is generated that the firm has a strong chance of achieving

TOC and MPC framework

TOC works in the front end, engine, and back end and is quite different from other approaches but uses most of the same data

How to create an MRP

Take a time-phased set of MPS requirements and produce a result time-phased set of component parts and raw material requirements

What does the MRP record account for in terms of scheduling?

The MRP records take proper account of gross to netting and incorporates back scheduling and allows for explicit timings, desired lot sizing procedures, safety stocks, and parts commonality

Lecture: Method 4: CRP

The counterpart to MRP What happens if we don't have time to change capacity? Push jobs above capacity line into the future until there is room for them to fall into place -- that's finite loading

Exception codes

Used to separate the vital few from the trivial many by -Checking the input data accuracy -Directly supporting the MRP planning activity

How are TOC orders scheduled?

Using finite backward scheduling

Lecture: Method 1 CPOF

Using historical data Stability works best with this method When is CPOF the best rough cut method? Hours per end item used to estimate total capacity required Hours per work center calculated from historical ratios Works with JIT Data: MPS, often pulled from records

What measures are becoming less important?

Utilization

Uphill skier mode

VMI technique, it is the supplier's responsibility to supply in whatever way it wishes, so it can use its capacities and logistics more effectively

Lecture: Method 3 Resource Profiles

What is added that makes this method more accurate? Adding lead time information Time phases the capacity required for component parts at different work centers Data: MPS, BOM, routing information, and lead times for component parts

Impact of L4L on available inventory?

You can run inventory down to zero or whatever your SS requirement is. Plan should be to keep inventory as low as possible.

What is the problem with APS?

You end up with a hole in the work center schedule

When is safety stock used to account for uncertainty?

a bigger stock above and beyond that needed to satisfy the gross requirements, used when uncertainty about quantities is a problem

JIT philosophy

a broad philosophy of pursuing zero inventories, zero transactions, and zero "disturbances"

Firm planned orders

a planned order that the MRP system does not automatically change when conditions change, to change it managerial action is required. Provides a means for temporarily overriding the system to provide stability or solve problems

When is lead time used to account for uncertainty?

a procedure whereby shop orders or purchase orders are released and scheduled to arrive one or more periods before necessary to satisfy the gross requirements, used when the major uncertainty is timing rather than quantity

Procurement

a professional activity where information networks, relationships, terms, and conditions are established with vendor companies outside of PAC, while the release of individual orders and follow up activities are a part of PAC

Priority sequencing rule

a rule that specifies the job or customer processing sequence when several jobs are waiting in line at a workstation

Allocation

a step prior to order launching that involves an availability check for the necessary components

In terms of workers JIT requires

a strong degree of worker involvement and worked participation

Bandwidth

a wide bandwidth system has enough surge capacity to take on some variation in demand for the products as well as a fairly mixed set of products. Impact on MPC is to focus on inventory and throughput time reductions, where inventory is not built to level out capacity requirements

Objective of JIT mode of manufacture is to be able to

accept any customer order and turn it out right behind any other, with flexibility to handle surges in volume or mix changes, all done on a routine basis

Back schedule requirements

accurate BOM data and lead time estimates, a way to ensure all component parts are started at the right times, and some means of tracking components and subassemblies to make sure they are all completed according to plans

Process improvements: continual improvement

achieved by making thousands of small improvements in methods and products in a never-ceasing quest for excellence.

Demonstrated capacity

actual output

Ways to change capacity requirements

alternate routing, make or buy decisions, subcontracting, raw material substitution, inventory changes, revised customer promise dates

Shop floor and vendor scheduling activities begin when

an order is released

Bottleneck

any resource whose capacity is equal to or less than the required demand Only those work centers that are bottlenecks are of critical concern in scheduling, because the bottleneck work enters limit the overall production output of a plant

JIT MPC

applying JIT requires most of the critical MPC functions -- MPS, production planning, capacity planning, MRP. If BOM is reduced to two or three levels, detailed material planning and associated transaction costs can be cut significantly

Low-level coding

assign low level code numbers to each part in the product structure of indented BOM, so the top final assembly level is level 0. The higher the level codes, the lower in the product structure the part is used. MRP record processing proceeds from one level code to the next, starting at 0.

The combination of ? is the heart of MRP

back schedules and gross to net explosions

The primary application area of JIT is

back-end execution

Lead time offsetting

back-scheduling to determine the timing of orders to meet requirements

`Besides capacity, input/output analysis also monitors

backlog By monitoring backlog, you can wait and release work when it's really needed

Big JIT vs little JIT

big: seeks to rid waste in production little: scheduling goods when they're needed

Finite loading

both capacity planning and production activity control

How does TOC result in less WIP, reduced lead time, greater material velocity, and a move toward zero inventory manufacturing?

by overlapping schedules and using unequal batch sizes for transferring and processing

Picking tickets

calls for a specified amount of some part number to be removed from an inventory location, on a shop order, to be delivered to a particular department or location

if there is a mismatch between available capacity and required capacity, either the ________ or the ___________ should be changed

capacity or the material plan

Difference between finite loading and capacity planning

capacity planning does not consider any adjustment to plans because of planned capacity utilization, whereas finite loading starts with a specified capacity and schedules work through work centers only to the extent that capacity is available to do so

Medium range capacity planning decisions

capacity requirement planning

Production activity control (PAC)

concerns execution of material plans: shop floor control, vendor scheduling, procurement

What does the choice of measure of capacity depend on?

constraining resources and the firm's needs

JIT Human/organizational elements

continual improvements, which implies cross training, process improvements, and whatever else is needed to enhance worker performance, including education Whole person concept

The lot size problem is basically one of

converting requirements into a series of replenishment orders; determining how to group time-phased requirements data into a schedule of replenishment orders that minimizes the combined costs of placing orders and carrying inventory

Projected available balance

current and projected inventory status for the item at the end of each period

Move time

delay waiting to be moved plus time spent moving from one work center to the next

JIT Flexible systems

develop cellular designs, begin cellular manufacturing with great flexibility, and cross trained people with an emphasis on being able to handle volume surges

key to lot sizing in TOC is

distinguishing between a transfer batch and a process batch

Slack per operation

divide the slack by the number of remaining operations, again taking next the job with the smallest value. The reasoning is that it will be more difficult to complete jobs with more operations because they will have to be scheduled through more work centers.

JIT planning and execution

driven by a daily build schedule, supported by the JIT dictates of flawless execution, zero failures, no buffer inventories, cellular manufacturing, pull system, cross-training personnel ect.

Purpose of the priority sequencing rule

each shop order has a scheduled receipt for the part and a correlated due date. From this due date, operational due dates are created. With a computer based system a change in the due date for a scheduled receipt automatically changes an operational due date.

What are advantages of CPOF?

ease of calculation and minimal data requirements

Process improvements: TPM

either Total Preventative Maintenance or Total Productive Maintenance -- goal is to apply the diligence of product quality improvement to equipment and process quality

Change transaction

engineering changes and all those that update the MPC system database

Wagner-Whitin Algorithm WW

evaluates all possible ways of ordering material to meet demand using dynamic programming

Discrete lot sizes

exactly satisfy the net requirements for one or more periods

Scheduled receipts

existing replenishment orders for the item due in at the beginning of each period

Safety stock of non bottleneck operation completed parts is held before

final assembly

Short range capacity planning decisions

finite loading, input/output analysis

How do changes in machine technology affect capacity?

flexible automation increases variability of parts that can be processed in a machine center, future product mixes are more variable, equipment is more expansive

Process improvements: poka yoke

fool-proof operations, building operations in processes so that quality is evaluated as it's created. Also ensures lost cost by finding defects at the time they're created.

Input/output: Capacity data is usually expressed in

hours

Quality transactions

identification and communication of specifications, certification that other transactions have taken place, recording of backup data

Continuous improvement

identify and solve a constraint, then move on to the next one with the ultimate goal being that the only constraint is the marketplace

What does pegging in MRP allow you to do?

if you see in your MRP that you're going to run into trouble with a particular item, what pegging does through MRP module is it allows you to identify all products that are going to be potentially affected by that one item.

Further output beyond the constraint of the bottleneck can be achieved only by

improved utilization activity and reduced changeover times

An MRP system output

includes date of report, part number and description, planner and buyer code numbers, unit of measure for part, rejected parts, safety stocks, shrinkage allowance for anticipated scrap loss, lead time, family data, year to date scrap, usage last year, YTD usage, and order policy/lot size data

Precedent relationships

indicate the order in which things must be done

Basic principle of MPC systems is to substitute information for

inventory

Theory of constraints scheduling

involves the preparation of an exact schedule of jobs for bottleneck work centers, and sequencing the nonbottleneck work centers by a priority sequencing rule

Capacity bills procedure has an advantage over COPF because

it explicitly recognizes product mix changes

Raw material should not be released earlier than the scheduled TOC raw material release date because

it would minimize the WIP inventory and reduce choice of orders to be run on the nonbottleneck operations

Do not shift the execution problem from the customer back to _________________

it's suppliers: principle lesson from joint JIT manufacturing

Input data is based on

jobs' expected arrivals at a work center

Back scheduling

launch orders at the last possible moment -Advantages: brings down inventory costs -Downsides: loss of flexibility and responsiveness, increases risk

Hierarchy of capacity planning decisions

long, short, medium range

Lot sizing enhancements should only be done after

major uncertainties have been removed from the system -- after data integrity is in place

Planned output results from

managerial decision making to specify the capacity level, or based on the rate of capacity established by managers, or equal to planned input

Scheduling capacity and materials simulataneously

many firms need to cut down on lead time produced by scheduling materials first then capacity, and respond to actual customer demands faster without holding large inventories

Objective of TOC scheduling

maximize throughput by maximizing capacity in bottleneck work centers

The best measure of capacity are those that directly affect

meeting production plans

Kiyoshi Suzaki: 3 types of waste

motion, overproduction, time

Sequential processing of MPS quantities in APS means that

one needs to determine the priorities for scheduling these end products

Net change approach

only those items that are affected by the new or changed information is reprocessed

Run time

operation/machine run time per piece x lot size

periodic order quantity (POQ)

order exactly the requirements for the economic time interval

4 commonly used sequencing rules

order slack, slack per operation, critical ratio, shortest operation next

Logical transactions

ordering, execution, and confirmation of materials moving from one location to another, with JIT goal is elimination

Execution impact of JIT

orders move through the factory so quickly that it's not necessary to track their progress with a complex production activity control system JIT firms can pay the vendor for the purchased components in whatever products are completed each time period, so there will be so little WIP inventory that it's not worth either party keeping track of

Horizontal loading

orientation is on entire shop order, highest priority shop order or job is scheduled in all of its work centers, then the job with the next highest priority, ect. Often in conflict with using the work centers to their highest capacity. Faster than vertical

Ways to change capacity

overtime/undertime, hiring/layoff, increasing/decreasing the number of machines or times in use

Lead time is not a value to be measured as much as a

parameter to be managed

Shop-order-based systems are founded on the premise of job shop manufacturing, where

parts are routed to different parts of the factory for processing steps

Time bucket

periods in the MRP record

Planned order releases

planned replenishment orders for the item at the beginning of each period

PAC MPC system linkages

primary linkage is the material and capacity plans: The materials plan provides information to the SFC and vendor follow-up systems and sets performance objectives

Regeneration

processing all the records in one computer run, All current planned orders are removed. Then, starting with the end items, each item is completely rescheduled.

Mixed-model assembly lines allow the flexibility to

produce a wide variety of products in small lots, reducing inventories and customer delivery times

4 JIT building blocks in MPC

product design, process design, human/organizational elements, and manufacturing planning and control

Resource profiles

production lead time data are taken into account to provide time-phased projections of the capacity requirements for individual production facilities, more sophisticated approach. Important to keep time periods short as to not mask important changes in capacity requirements.

For any level of service, safety lead time can

provide the level with a smaller inventory investment

Input/output analysis

provides a method for monitoring the actual consumption of capacity during the execution of detailed material planning.

Gantt chart

provides graphic understanding of the shop-floor control problem, and can be used in manual shop-floor control systems

JIT Product design

quality, designing for manufacture in cells, reducing the levels in the BOM (which reduces inventory requirements and speed processing)

Transfer batch

quantity that moves from operation to operation. Predetermined integral fractions of the original process batch (order quantity). THey provide the work center with the flexibility to start producing an order before it is completed at the previous work center

JIT process design

reduce the number of product conversion steps through cellular manufacturing, position equipment in cellular manufacturing in a U shape to achieve rapid flow of production with minimal inventories to concentrate on material velocity

Lot splitting/overlap/line scheduling

reduces order flow times and smooths work flow in the shop to yield better use of capacity

Pegging

relates all the gross requirements for a part to all the planned order releases or other sources of demand that created the requirements. Shows only the specific part numbers that produce the specific gross requirement in each time period, so it can trace the impact of a material problem all the way up to the order it would affect.

Long range capacity planning decisions

resource planning, rough cut capacity planning

Capacity bills

rough cut method providing more direct linkage between individual end products in the MPS and the capacity required for individual work centers. Accounts for shifts in product mix, so requires more data: BOM, routing data, direct labor/machine-hour data

4 elements of lead time

run time setup time move time queue time

For any level of inventory, a higher service level can be achieved with

safety lead time

Front schedule logic

scheduling as early as possible

Service parts

service part demand must be included so that material requirements are not understated. Demand is typically based on a forecast and is added directly into the gross requirement for the part.

Capacity planning using overall factors

simple approach, done manually, data inputs come from the MPS, procedure is based on planning factors derived from standards or historical data for end products, used to estimate overall labor or machine-hour requirements. The overall estimate is then allocated to individual work centers on the basis of historical data on shop workloads. Usually stated in weekly or monthly terms, revised as MPS changes

Focus of JIT execution

simplicity -- goods flow routinely because problems of quality and disturbances and extensive records are eliminated

Bucketless systems

specifies the exact release and due dates for each requirement, scheduled receipt, and planned order -Allows for better maintenance of lead time offsets and provides a more precise time-phased information -Plans are revised as necessary and the entire execution cycle is shortened

First step of a JIT program

stabilize, and freeze production

Back schedule

start each item as late as possible

Front scheduling

starting everything as early as possible -Advantages: you are fine if anything goes wrong -Downsides: high inventory costs

Cutting

starts all parts production as soon as possible, but leads to unnecessary work in process inventories

Back scheduling CFS

starts with scheduling jobs backwards from their due dates. If it produces a past due start date for a shop order, it is infeasible. -Validity of the schedule will decay as the time horizon or scheduling is extended -Reschedule more often to improve scheduling

Time phased

stated on a unique period-by-period basis, rather than aggregated or averaged

Information from SFC and VFS to MPC

status information and warning signals

Order slack

sum the setup times and run times for all remaining operations, subtract this from the time remaining (now until the part due date), and call the remainder slack. The rule is to work on the job with the least slack, which addresses the problem of work remaining.

Bottom up replanning

taking parts from one order to finish another

Gross requirements

the anticipated future usage of or demand for the item during each period

Theory of Constraints

the capacities of bottleneck work centers need to be planned and managed much more carefully than those of nonbottlenecks. Essentially separates those jobs that pass through bottlenecks rom those that don't.

Backflushing

the concept of updating component inventory balances when finished items are received into stock. Some firms just reduce component part inventory balances by exploding the BOMs for whatever has been delivered into finished goods

Backlog

the cushion between input and output, allowing work center operations to be less affected by variations in requirements

MRP translates the overall plans for production into

the detailed individual steps necessary to accomplish those plans

Net requirement

the difference between the available inventory and gross requirement

Net requirements formula

the difference between the available inventory and gross requirement

Appropriate measures of capacity must be established and changed as

the evolution in the bundle of goods and services occurs

Single-card kanban system

the greater the number of kanban cards in the system, the larger the inventory, but also the greater autonomy that can be attained between the component-producing work centers and the assembly work centers

How are lead time and WIP directly related?

the longer the lead time, the longer the time between the order launching date and due date, the more orders in the shop, the longer the queue time and WIP, and so on

Primary consideration in the development of lot-sizing procedures for MRP is

the nature of net requirements data

Planning horizon

the number of future periods for which plans are made

Lot for lot

the ordering policy when remaining planned order releases for one part exactly meet the net requirements in the remaining periods, offset for the lead time

What is the problem with processing less frequently?

the portrayal of component status and needs expressed in the records becomes increasingly out of date and inaccurate -Some change transactions may cascade throughout the product structure and if they are not reflected in the time-phased records early enough, it can result in poor planning -Can process only records affected by changes

Order launching

the process of releasing orders to the shop or to vendors -Prompted by the MRP when a planned order release is in the current time period, the action bucket

Explosion

the process of translating product requirements into component part requirements, taking existing inventories and scheduled receipts into account The process of determining for any part number the quantities of all components needed to satisfy its requirements, and continuing this process for every part number until all purchased or raw material requirements are exactly calculated

Less tightly-coupled JIT supply

the supplier will have multiple customers, only some of which will be supplied by JIT. The customer will have multiple suppliers, and not all of these will be expected to deliver directly to the line -- the customer can pick up goods from vendors on some prearranged scheduled

JIT coordination through hubs

the supply of materials through hubs (an inventory placed closed to the customer that is filled by the suppliers)

Process batch

the total lot size released to the shop

Balancing transactions

those needed to verify that an activity actually occurred, account for 10-20% of manufacturing overhead costs, JIT can reduce that complexity by 75-90%

TBO formula

time between orders = EOQ / mean demand rate

Critical ratio

time remaining / work remaining, (due date - present time / lead time remaining), process the job with the smallest critical ratio next Lead time remaining includes set up, move, run, and queue Ratio 1.0 = job on time Ratio below 1.0 = behind schedule job Ratio above 1.0 = ahead of schedule job

Queue time

time spent waiting to be processed at a work center, which depends on workload and schedule. Frequently accounts for 80% or more of total lead time. Element that is more capable of being managed through better scheduling.

Setup time

time to prepare the work center, independent of lot size

Capacity requirements planning technique CRP

time-phased material plans produced by the MRP form the basis for calculating time-phased capacity requirements. Data includes work in process, routing, scheduled receipts, and planned orders, used to determine capacity needs for key machine centers and labor skills, covering a horizon of several weeks to a year.

MRP is characterized by the use of

time-phased requirement records

Goal of Gantt charts

to prepare a schedule for each master center Prepare the detailed work center schedule without move and queue times

A work center may contain _______ batches coming from many released orders, so the queue is searched for _______ batches of the same part order that has just been completed at the work center in order to save setup time at a bottleneck resources

transfer

Tightly coupled JIT supply

two firms need to develop a form of synchronous manufacturing, operating almost as a single unit with execution drive by JIT -- allows for almost no transactions or inventory costs, but requires flawless execution

The basic MRP record

universal representation of the status and plans for any single item, whether raw material, component parts, or finished good

Primary problem with Gantt charts

updating, actual data must be captured and integrated into an ongoing replanning cycle

Finite scheduling with product structures using APS Advanced Production Scheduling

use horizontal loading and either front or back scheduling depending on whether the product is desired as soon as possible -- now the entire product is scheduled (not just component parts, but products with part structures).

Schedule board

used in Gantt charts, racks to hold pieces of paper, each paper is a job and its length represents the setup plus run time required

Part period balancing PPB

uses all info provided by the requirements schedule, tries to equate the total costs of placing orders and carrying inventory

Bottom-up replanning

using pegging data to solve material shortage problems

Capacity requirements planning is only applicable in companies

using time-phased MRP records for detailed material planning and shop-order-based shop scheduling systems, unnecessary in JIT

Capacity requirements planning

utilized time-phased materials plan information produced by MRP -- actual lot sizes, lead times. Gross-to-net feature takes into account production capacity already stored in inventories. Shop-floor control system accounts for work in process in the shop, so only the capacity needed to complete the remaining work on open shop orders is considered in calculating required work center capacities. Takes into account demand for service parts, additional capacity required by scrap and item record errors, ect.

What are shortcomings of CPOF?

valid only if product mixes or historical divisions of work between work centers remains constant. Would work well for JIT environment.

Weekly wash

week 1's sales orders become week 2's production schedule. This approach shifts the emphasis from scheduling material to scheduling time blocks -- what's scheduled in the next time frame, rather than on when we'll make product X. Focus is driven by actual requirements rather than a forecast of needs.

Action bucket

when the planned order is created for the most immediate or current period

Vertical loading

work center is scheduled job by job, orientation is on planning the capacity of a work center independently

Rated capacity

work center's planned capacity which limits planned output

Capacity Monitoring with Input/Output Control

work flowing through a work center is monitored, the planned work input and planned output are compared to the work actual input and output