me 482 - manufacturing systems production planning, scheduling and control by ed red

ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems

Production Planning, Production Planning, Scheduling and ControlScheduling and Control

byby

Ed RedEd Red


Objectives• To review modern production control technologiesTo review modern production control technologies

- MRP- MRP- JIT- JIT- Shop floor control- Shop floor control- Inventory control- Inventory control

• To study costs and complexity of manufacturing systemsTo study costs and complexity of manufacturing systems

• To consider application conditions (student presentations)To consider application conditions (student presentations)

• To test understanding of the material presented To test understanding of the material presented

INMASS/MRP ModulesINMASS/MRP Modules• MRP (Materials Requirements Planning)

• Inventory Control

• Bill of Materials

• Job Cost/Work in Process

• Purchasing

• Sales Order Entry

• General Ledger

• Accounts Receivable

• Accounts Payable

• Payroll

• Shop Floor Control

• Bar Coding

• Forecasting

• StarShip Shipping Module

• Customer Histories

• Vendor Histories

• Each module includes built-in reports and the INQUIRE Report Generator allows you to create customized reports and forms.


Production planning, scheduling, and controlProduction planning, scheduling, and control Objective – “...managing the details of what and how many products to produce Objective – “...managing the details of what and how many products to produce

and when, and obtaining the raw materials, parts, and resources to produce and when, and obtaining the raw materials, parts, and resources to produce those products.” (Groover)those products.” (Groover)

Four activities of production planning:Four activities of production planning:• Aggregate production planningAggregate production planning – enterprise level planning for product lines – enterprise level planning for product lines

and output levels.and output levels.

• Master production planningMaster production planning - Breaking down the enterprise product plans into - Breaking down the enterprise product plans into

a master production schedule (MPS) for producing models within each product a master production schedule (MPS) for producing models within each product

line.line.

• Material requirements planning (MRP)Material requirements planning (MRP) – computer plan to convert MPS into a – computer plan to convert MPS into a

schedule of raw materials and parts used in the end products.schedule of raw materials and parts used in the end products.

• Capacity planningCapacity planning – determine labor and equipment needed to achieve master – determine labor and equipment needed to achieve master

schedule.schedule.

6 or more months6 or more months6 or more months6 or more months

1 - 2 months1 - 2 months1 - 2 months1 - 2 months


Production planning, scheduling, and controlProduction planning, scheduling, and control Four production activities:Four production activities:• Shop floor controlShop floor control – compare progress and status of production orders to – compare progress and status of production orders to

production plans (MPS) and release production orders to the factory as neededproduction plans (MPS) and release production orders to the factory as needed..

• Inventory controlInventory control - techniques for managing inventory. - techniques for managing inventory.

• Manufacturing resource planning (MRP II)Manufacturing resource planning (MRP II) – integrates MRP, capacity – integrates MRP, capacity

planning, shop floor control and other production functions.planning, shop floor control and other production functions.

• Just-in-time production systems (JIT)Just-in-time production systems (JIT) – scheduling discipline in which – scheduling discipline in which

materials and parts are delivered to the next production station (cell, FMS, etc.) materials and parts are delivered to the next production station (cell, FMS, etc.)

just prior to their being used.just prior to their being used.


Shop floor controlShop floor control

Three phases:Three phases:• Order releaseOrder release – soft (modern factory) and/or hard (manual factory) – soft (modern factory) and/or hard (manual factory)

documentation needed to process a production order through the factory.documentation needed to process a production order through the factory.

• Order schedulingOrder scheduling - assigns production orders to the plant work - assigns production orders to the plant work

centers...often referred to as a dispatch list.centers...often referred to as a dispatch list.

• Order progressOrder progress – monitors the status of the orders in the plant, WIP (work- – monitors the status of the orders in the plant, WIP (work-

in-progress), and any other characteristics which can be used to measure in-progress), and any other characteristics which can be used to measure

progress and performance. May depend on a factory data collection system progress and performance. May depend on a factory data collection system

for information.for information.


Shop floor control – order releaseShop floor control – order release

Documentation consists of:Documentation consists of:• Route sheetRoute sheet – documents process plan for part to be produced. – documents process plan for part to be produced.

• Material requisitionMaterial requisition - draw necessary materials from inventory. - draw necessary materials from inventory.

• Job cardsJob cards – report labor required to produce part . – report labor required to produce part .

• Move ticketsMove tickets – authorize parts to be transported between work centers. – authorize parts to be transported between work centers.

• Parts list Parts list – needed if the product requires an assembly of component parts– needed if the product requires an assembly of component parts


Shop floor control – order schedulingShop floor control – order scheduling Concerned with machine loading and job sequencing:Concerned with machine loading and job sequencing:• Machine loadingMachine loading – allocating orders to work centers. – allocating orders to work centers.

• Job sequencingJob sequencing - determining the order in which parts are processed through a - determining the order in which parts are processed through a

given work center.given work center.

• Priority controlPriority control – maintains the proper priority for the production orders under – maintains the proper priority for the production orders under

the dispatching rules:the dispatching rules:

first-come-first-servefirst-come-first-serve – jobs are processed in order received– jobs are processed in order received

earliest due dateearliest due date – orders with earlier due dates have higher priority– orders with earlier due dates have higher priority

shortest processing timeshortest processing time – those finished faster have higher priority– those finished faster have higher priority

least slack timeleast slack time – jobs with least slack time have higher priority– jobs with least slack time have higher priority

critical ratiocritical ratio – ratio of time remaining until due date divided by – ratio of time remaining until due date divided by

remaining remaining

process time. Orders with lowest ratio given higher priority. process time. Orders with lowest ratio given higher priority.


Shop floor control – order progressShop floor control – order progress

Concerned with progress reports:Concerned with progress reports:

• Work order status reportsWork order status reports – status of production orders. – status of production orders.

• Progress reportsProgress reports - report performance of shop during a time period, - report performance of shop during a time period,

including orders completed, orders not completed, etc.including orders completed, orders not completed, etc.

• Exception reportsException reports – deviations from the production schedule and other – deviations from the production schedule and other

exceptions.exceptions.


Shop floor control – softwareShop floor control – software


Shop floor control softwareShop floor control software


Shop floor control – softwareShop floor control – software


Inventory controlInventory control Concerned with minimizing cost of holding inventory and maximizing Concerned with minimizing cost of holding inventory and maximizing

customer service. These seem to conflict.customer service. These seem to conflict.

Types of inventory:Types of inventory:• Raw materialsRaw materials• WIPWIP• ComponentsComponents• Finished productsFinished products

Inventory costs:Inventory costs:• Investment costsInvestment costs• Storage costsStorage costs• Possible obsolescence costsPossible obsolescence costs• Spoilage costsSpoilage costs

Inventory as a function of demand:Inventory as a function of demand:• Independent demand (order point inventory method) Independent demand (order point inventory method) – demand for a – demand for a

product is unrelated to demand for other items (e.g., final product and spareproduct is unrelated to demand for other items (e.g., final product and spare parts)parts)

• Dependent demand (MRP method) Dependent demand (MRP method) – demand for an item is directly related – demand for an item is directly related to demand for some other item (e.g., product component, raw material)to demand for some other item (e.g., product component, raw material)


WIP inventory costsWIP inventory costs Concerned with minimizing costs of processing materials before the final Concerned with minimizing costs of processing materials before the final

product can be released to the consumer.product can be released to the consumer.

Costs considerations:Costs considerations:

• Production consists of a series of operationsProduction consists of a series of operations

• Time is consumed in each operation (and time is cost)Time is consumed in each operation (and time is cost)

• Time and costs are consumed between each operation (e.g., material handling Time and costs are consumed between each operation (e.g., material handling with no value added)with no value added)

WIP represents money expended for material and processing, still WIP represents money expended for material and processing, still considered inventory because goods are not yet delivered to the customer!considered inventory because goods are not yet delivered to the customer!


WIP inventory cost analysis - termsWIP inventory cost analysis - terms

CCmm – material cost – material cost

TTpp – average production time (setup plus operation time) – average production time (setup plus operation time)

TTpkpk – production time for process k (setup plus operation time) – production time for process k (setup plus operation time)

TTsusu – average machine setup time for a batch process – average machine setup time for a batch process

TTnono – average non-operation time for a machine – average non-operation time for a machine

TTcc – average operation cycle time for a machine – average operation cycle time for a machine

TTaa – average operation cycle time for a machine including setup and – average operation cycle time for a machine including setup and

non-operation times non-operation times

Q – average batch quantity for batches of parts being processedQ – average batch quantity for batches of parts being processed


WIP inventory costcost analysis - terms

CCoo – production costs rate – production costs rate

CCokok – operational costs for process k – operational costs for process k

CCnono – average non-operational costs (material handling, inspection, etc.) – average non-operational costs (material handling, inspection, etc.)

CCnoknok – non-operational costs for process k (material handling, inspection, – non-operational costs for process k (material handling, inspection,

etc.)etc.)

CCsusu = setup costs and/or ordering costs for an order($/setup or $/order) = setup costs and/or ordering costs for an order($/setup or $/order)


WIP inventory cost analysis - termsWIP inventory cost analysis - termsCpc – part costs accumulated through all processes, inspections, and

material handling

no – total number of operations/processes

MLT – manufacturing lead time (the longer the MLT, the greater the

WIP)

t – time of part spent in process sequence

h – holding cost rate

Ch = holding costs

HCpc – holding cost per part

TCpc – total cost per part including WIP carrying costs


WIP inventory cost WIP inventory cost analysis graphsanalysis graphs

Linear approximation of part costs as Linear approximation of part costs as function of time in factoryfunction of time in factoryPart/product costs as function of time in Part/product costs as function of time in

factoryfactory


WIP inventory cost analysis graphsWIP inventory cost analysis graphs

Linear approximation with WIP holding costs


WIP inventory cost analysisWIP inventory cost analysis

Equations:Equations:

avg batch operation cycle timeavg batch operation cycle time TTaa = T= Tsusu + Q T + Q T

c c + T+ Tnono

MLTMLT (batch process)(batch process) MLT = nMLT = no o TTaa

cost per operationcost per operation CCokok = C = Co o TTpkpk + C + C

nok nok

total cost after all operationstotal cost after all operations CCpcpc = C = Cmm + + kk C Cok ok ( k = 1, .. n ( k = 1, .. n

oo))

total cost after all operations*total cost after all operations* CCpcpc = C = Cmm + n + n

oo ( C( Co o TTpp + C + C

no no ))

* assuming T* assuming Tpkpk and C and C

noknok are the same for each operation are the same for each operation


WIP inventory cost analysisWIP inventory cost analysis

Equations:Equations:

part cost function line*part cost function line* C(t) = CC(t) = Cmm + + nno o (C(C

o o TTpp + C + Cno no )]t/ )]t/

MLTMLT*using average T*using average T

pp and C and Cnono

total cost per part including WIPtotal cost per part including WIP TTCCpcpc = C = Cpcpc + (C + (C

mm + C + Cpp)t/MLT)h dt)t/MLT)h dt

where Cwhere Cpp = n = n

o o (C(Co o TTpp + C + C

no no ) )

thenthen TTCCpcpc = C = Cpcpc + HC + HC

pcpc

wherewhere HCHCpcpc = holding cost for WIP = holding cost for WIP HCHC

pcpc = = (C(Cmm + C + C

pp/2) h (MLT)/2) h (MLT)

oo

MLTMLT


WIP inventory exampleWIP inventory example

Problem: Problem: Inventory Inventory HoldingHolding CostCost forfor WIPWIP DuringDuring ManufacturingManufacturing

The cost of the raw material for a certain part is $100. The part is The cost of the raw material for a certain part is $100. The part is processed through 20 processing steps in the plant, and the processed through 20 processing steps in the plant, and the manufacturing lead time is 15 wk. The production time per processing manufacturing lead time is 15 wk. The production time per processing step is 0.8 hr, and the machine and labor rate is $25.00/hr. Inspection, step is 0.8 hr, and the machine and labor rate is $25.00/hr. Inspection, material handling, and other related costs average to $10 per material handling, and other related costs average to $10 per processing step by the time the part is finished. The interest rate used processing step by the time the part is finished. The interest rate used by the company by the company i i = 20%, and the storage rate = 20%, and the storage rate s s = 13%.= 13%. Determine the Determine the cost per part and the holding cost.cost per part and the holding cost.


WIP inventory exampleWIP inventory exampleProblem: Problem: InventoryInventory HoldingHolding CostCost forfor WIPWIP DuringDuring ManufacturingManufacturing

Solution: Solution: The material cost, operation costs, and non-operation costs are from The material cost, operation costs, and non-operation costs are from

CCpcpc = C = Cmm + C + C

pp = C = Cmm + n + n

oo ( C( Co o TTpp + C + C

no no ) = $100 + 20($25.00/hr x .8 hr + $10) ) = $100 + 20($25.00/hr x .8 hr + $10)

= $100 + $600 = $700/pc= $100 + $600 = $700/pc

Next, determine the holding cost rate h = 20%+13%=33%. Expressing this as a weekly Next, determine the holding cost rate h = 20%+13%=33%. Expressing this as a weekly rate, rate,

h = (33%)/(52 wk) = 0.6346 %/wk = 0.006346/wk. The holding cost/pc: h = (33%)/(52 wk) = 0.6346 %/wk = 0.006346/wk. The holding cost/pc:

HCHCpcpc = (C = (C

mm + C + Cpp/2) h (MLT) = (100 + 600/2)(.006346)(15 wk) =/2) h (MLT) = (100 + 600/2)(.006346)(15 wk) = $38.08/pc$38.08/pc

This gives a total cost ofThis gives a total cost of

TTCCpcpc = C = Cmm + C + C

pp + HC + HCpcpc = 700.00 + 38.08 = = 700.00 + 38.08 = $738.08/pc$738.08/pc


JIT production systemsJIT production systems

ProblemProblem - to reduce inventory costs by - to reduce inventory costs by delivering the correct components to the delivering the correct components to the manufacturing operation exactly when needed, manufacturing operation exactly when needed, minimizing WIP and MLT. JIT is the solution.minimizing WIP and MLT. JIT is the solution.



JIT must have:JIT must have:

Pull system of production controlPull system of production control – Kanban (card) system is – Kanban (card) system is often used to implement a pull system. The cards authorize 1) often used to implement a pull system. The cards authorize 1) parts production (P-kanban) and 2) parts transport (T-parts production (P-kanban) and 2) parts transport (T-kanban). A P-kanban authorizes an upstream process to kanban). A P-kanban authorizes an upstream process to produce only the parts that will fill a batch container, no produce only the parts that will fill a batch container, no more. A T-kanban authorizes the transport of the batch to a more. A T-kanban authorizes the transport of the batch to a downstream station. These procedures are duplicated in downstream station. These procedures are duplicated in sequence, eliminating much of the paperwork, but uses more sequence, eliminating much of the paperwork, but uses more labor, although said to promote teamwork among stations.labor, although said to promote teamwork among stations.


JIT kanban examplesJIT kanban examples

The The withdrawalwithdrawal Kanban shows that Kanban shows that the preceding process which makes the preceding process which makes this part is forging, and the person this part is forging, and the person carrying this Kanban from the carrying this Kanban from the subsequent process must go to subsequent process must go to position B-2 of the forging position B-2 of the forging department to withdraw drive department to withdraw drive pinions. Each box of drive pinions pinions. Each box of drive pinions contains 20 units and the shape of the contains 20 units and the shape of the box is B. This Kanban is the 4th of 8 box is B. This Kanban is the 4th of 8 issued. The item back number is an issued. The item back number is an abbreviation of the item.abbreviation of the item.


JIT kanban examplesJIT kanban examples

TheThe production ordering production ordering Kanban Kanban to the right shows that the to the right shows that the machining process SB-8 must machining process SB-8 must produce the crankshaft for the produce the crankshaft for the car type SX50BC-150. The car type SX50BC-150. The crankshaft produced should be crankshaft produced should be placed at store F26-18. The placed at store F26-18. The production-ordering Kanban is production-ordering Kanban is often called an in-process often called an in-process Kanban or simply a production Kanban or simply a production Kanban.Kanban.




Small batch sizes and reduced setup timesSmall batch sizes and reduced setup times – uses – uses improvements in fixturing, part handling, group improvements in fixturing, part handling, group technology, automation, etc. to minimize batch size and technology, automation, etc. to minimize batch size and setup.setup.




Stable and reliable production operationsStable and reliable production operations – also includes a – also includes a stable supplier base, good relationships, committed stable supplier base, good relationships, committed workforce, defect free materials and components (in other workforce, defect free materials and components (in other words, you must have your act together from A – Z)words, you must have your act together from A – Z)


Lean versus agile production systems

Lean production Agile manufacturing

Enhancement of mass production Emphasis on mass customization

Flexible production for product variety Flexibility for customized products

Focus on factory operations Scope is enterprise wide

Emphasis on supplier management Formation of virtual enterprises

Emphasis on efficient use of resources Thriving environment with continuous change

Relies on smooth production schedule Responsive to change

Minimize change! Embrace change!


What have we learned?What have we learned?

Production planning, scheduling Production planning, scheduling and controland control

me 482 - manufacturing systems production planning, scheduling and control by ed red

Documents

master production planning

production activities

production functions

release production orders

status of production

production plans mps

master production schedule

capacity planning