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Operations Management, 5E: Chapter 10,11 en12
1
Lecture 5 Planning and Control 10 The nature of Planning and Control 11 Capacity Planning and Control 12 Inventory Planning and Control
Hessel Visser Slack
Operations Management Oktober 2010
Page 268
Operations Management, 5E: Chapter 10,11 en12
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Operations resources Customer requirements
Demand Supply
Delivery of products
and services
The operation The market
Planning and control
Required time,
quantity and quality
of products and
services
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Capacity Load
10 The nature of Planning and Control 11 Capacity Planning and Control 12 Inventory Planning and Control
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Page 271
Tim
e h
orizon
Hours
/days
Days/w
eeks/m
onth
s
Month
s/y
ears
PLANNING
CONTROL
Operations Management, 5E: Chapter 10,11 en12
4
ASSEMBLE TO ORDER
Purchase
Operation
Make Assemble Deliver
D P
Order
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Compare CODP = KOOP
Difference between Production Lead Time (P)
and Delivery Lead Time (D)
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P:D ratios
Obtain resources Produce product / service Deliver to customer
D P
Produce to stock
D P
Part produce to order
D P
Produce to order
D P
Resource to order
Customer
orders
Make to stock
Make to order
Resource to order
Difference between Production Lead Time (P)
and Delivery Lead Time (D)
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Finite loading limits the loading on each centre to their capacities, even if it means
that jobs will be late. Infinite loading allows the loading on each centre to exceed their
capacities to ensure that jobs will not be late
1 2
3 4
5 6
0
Work centre Work centre
A B C A B C
Finite loading Infinite loading
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Finite and infinite loading of jobs
on three work centres A, B and C
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Operations Management, 5E: Chapter 10,11 en12
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Capacity and load
are not always in
balance
Operations Management, 5E: Chapter 10,11 en12
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In Accident and Emergency
departments, patients arrive at
random. Medical staff must
rapidly devise a schedule:
1. Patients with serious illness
need urgent attention.
2. Less urgent cases will have to
wait.
3. Routine non-urgent cases will
have the lowest priority of all.
The hospital triage system
See article about van Houdenhoven
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Operations Management, 5E: Chapter 10,11 en12
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Process
stage
Week
12
Week
13
Week
14 Week
15
Week
16
Week
17
Week
18
Job A Job B Job C Job D Job E
Job A Job B Job Y Job X
Job A Job B Job Z Job X Job Y
Job A Job B Job X Job C
Gantt chart showing the schedule for
jobs at each process stage
Initial spec.
Pre-coding
Coding
Compact. check
Final test
Job A Job B Job W Job C Job D
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Operations Management, 5E: Chapter 10,11 en12
10 Shift allocation for the technical ‘hotline’: (a) on a daily basis; (b) on a weekly basis
(a)
Shift pattern (24-hour clock)
Peter
Jo
Walter Jo
Marie Claire Jo
04:00 08:00 12:00 16:00 20:00
Peter X X X X O O X
Marie X X X X X O O
Claire X X X X O O X
Walter O X X X X X O
Jo O X X X X X O
Mon Tue Wed Thu Fri Sat Sun
Number of staff
required 3 5 5 5 3 2 2
(b)
X O Full day Day off
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Operations Management, 5E: Chapter 10,11 en12
11 Pull and push philosophies of planning and control
PUSH CONTROL
Work
centre
Work
centre
Work
centre
Work
centre
Instruction on
what to make
and where to
send it
DEMAND
FORECAST
OR
CENTRAL OPS. PLANNING AND CONTROL SYSTEM
See also chapter 14
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PULL CONTROL
Work
centre DEMAND
Pull and push philosophies of planning and control
Work
centre
Work
centre
Work
centre
Request Request Request Request
Delivery Delivery Delivery Delivery
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Push versus Pull explained
Operations Management, 5E: Chapter 10,11 en12
14 The drum, buffer, rope, concept
Stage or
process B
Stage or
process A
Stage or
process D
Stage or
process E
Buffer of
inventory
Stage or
process C
Bottleneck
drum sets
the beat Communication rope controls
prior activities
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Operations Management, 5E: Chapter 10,11 en12
16 Bottleneck/niet-bottleneck concept
Een bottleneck is die capaciteitsbron waarvan de capaciteit kleiner is dan of gelijk is aan de capaciteitsbehoefte ten gevolge van de marktvraag.
Een niet-bottleneck heeft een zekere overcapaciteit.
Maak de niet-bottlenecks ondergeschikt aan de bottlenecks.
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Operations Management, 5E: Chapter 10,11 en12
17 Bottleneck-management
1. Ontdek de bottleneck
2. Maximaliseer de output van de bottleneck
3. Maak alles afhankelijk van de bottleneck
4. Hef de bottleneck op
5. Ga terug naar 1
Voorkom dat traagheid (inertie) de bottleneck wordt.
Operations Management, 5E: Chapter 10,11 en12
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Operations resources Customer requirements
Demand Supply
Availability of capacity
to deliver products and
services The operation The market
Capacity planning and control
Required availability
of products and
services
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10 The nature of Planning and Control 11 Capacity Planning and Control 12 Inventory Planning and Control
Operations Management, 5E: Chapter 10,11 en12
20 Objectives of capacity planning and control
Forecast demand
Time
Ag
gre
ga
ted
ou
tpu
t
Estimate of current capacity
Measure aggregate
capacity and demand
Identify the alternative
capacity plans
Choose the most
appropriate capacity
plan
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Capacity
Load
Turnover in man hours
Time in quarterlies
Winter Spring Summer Autumn 1/1 31/12
Outsourcing? Capacity versus Load
Operations Management, 5E: Chapter 10,11 en12
22
Climatic Festive Behavioural Political Financial Social
Causes of seasonality
Construction materials
Beverages (beer, cola)
Foods (ice-cream, Christmas cake)
Clothing (swimwear, shoes)
Gardening items (seeds, fertilizer)
Fireworks
Travel services
Holidays
Tax processing
Doctors (influenza epidemic)
Sports services
Education services
Source: Alamy/Medical-on-line
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Operations Management, 5E: Chapter 10,11 en12
23 How capacity and demand are measured
Design
capacity
168 hours
per week
Effective
capacity
109 hours
per week
Planned loss
of 59 hours
Actual output –
51 hours per
week
Avoidable loss –
58 hours per
week
Efficiency
Actual output
Effective capacity =
Utilization
Actual output Design capacity
=
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Operations Management, 5E: Chapter 10,11 en12
24 Ways of reconciling capacity and demand
Level capacity
Demand
Capacity
Chase demand Demand
management
Capacity Capacity
Demand Demand
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Operations Management, 5E: Chapter 10,11 en12
25 Cumulative representations
Cumulative demand
Time
Ca
pa
city a
nd
de
ma
nd
Cumulative capacity
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Building
stock
Unable to
meet orders
Operations Management, 5E: Chapter 10,11 en12
26 Z-graphic
In Out Stock level
Lead time
Stock level
Time
Time
Time
Lead time
Cumu
lative
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Rejecting
Source of
customers
Boundary of system
Queue or ‘waiting line’
Served customers
Balking Reneging
Server 1
Server 2
Server m
Distribution of arrival times
Distribution of processing times
Simple queuing system
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Time
Time
Low variability –
narrow distribution
of process times
High variability –
wide distribution of
process times
Simple queuing system
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Operations resources Customer requirements
Demand Supply Delivery of products
and services when
required The operation The market
Inventory planning and control
Need for products
and services at a
particular time
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10 The nature of Planning and Control 11 Capacity Planning and Control 12 Inventory Planning and Control
Operations Management, 5E: Chapter 10,11 en12
30 Inventory is created to compensate for the
differences in timing between supply and demand
Input
process
Inventory
Output
process
Rate of supply from input process
Rate of demand from output process Inventory
Source: Alamy/Van Hilversum
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Operations Management, 5E: Chapter 10,11 en12
31 Two alternative inventory plans with
different order quantities (Q)
Time
Invento
ry level Plan A
Q = 400
Demand (D) = 1000 items per year
Average inventory
for plan A = 200
Average inventory
for plan B = 50
0.1 yr 0.4 yr
100
400
Plan B Q = 100
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400
350
300
250
200
150
100
50
400
400
350 300 250 200 150 100 50
Order quantity
Co
sts
Economic order quantity (EOQ)
Total costs
Holding costs
Order costs
Traditional view of inventory-related costs
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40
0
Original holding costs
Original total costs
Revised holding costs
Revised total costs
400
350
300
250
200
150
100
50
400 350 300 250 200 150 100 50 Order quantity
Co
sts
Order costs
Original EOQ
Revised EOQ
If the true costs of stock holding are taken, the
economic order quantity, the real EOQ, is much smaller
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Two-bin system Three-bin system
The ‘two-bin’ and ‘three-bin’ re-ordering systems
Bin 2 Bin 1 Bin 1 Bin 2 Bin 3
Items being used
Re-order level + safety inventory
Items being used
Re-order level inventory
Safety inventory
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Operations Management, 5E: Chapter 10,11 en12
35 Pak het kleurrijk aan
Operations Management, 5E: Chapter 10,11 en12
36 Iedereen snapt dit
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100
90
80
70
60
50
40
30
20
10
100 90 80 70 60 50 40 30 20 10
Class C
items
Class B
items
Class A
items
Pareto curve for stocked items
Percentage of types of items
Perc
enta
ge o
f valu
e o
f item
s
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Operations Management, 5E: Chapter 10,11 en12
38 Inventory classifications and measures
Class A items – the
20% or so of high-value
items which account for
around 80% of the total
stock value
Class B items – the
next 30% or so of
medium-value items
which account for
around 10% of the total
stock value
Class C items – the
remaining 50% or so of
low-value items which
account for around the
last 10% of the total
stock value
