ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
Production Planning, Production Planning, Scheduling and ControlScheduling and Control
byby
Ed RedEd Red
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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 months
1 - 2 months1 - 2 months
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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 receivedearliest due dateearliest due date – orders with earlier due dates have higher priority– orders with earlier due dates have higher priorityshortest processing timeshortest processing time – those finished faster have higher priority– those finished faster have higher priorityleast slack timeleast slack time – jobs with least slack time have higher priority– jobs with least slack time have higher prioritycritical 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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
Shop floor control – softwareShop floor control – software
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
Shop floor control softwareShop floor control software
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
Shop floor control – softwareShop floor control – software
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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)
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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!
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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)
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
WIP inventory cost analysis graphsWIP inventory cost analysis graphs
Linear approximation with WIP holding costs
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
WIP inventory cost analysisWIP inventory cost analysis
Equations:Equations:avg batch operation cycle timeavg batch operation cycle time TTaa = T= Tsusu + Q T + Q Tc c + T+ Tnono
MLTMLT (batch process)(batch process) MLT = nMLT = no o TTaa
cost per operationcost per operation CCokok = C = Co o TTpkpk + C + Cnok nok
total cost after all operationstotal cost after all operations CCpcpc = C = Cmm + + kk C Cok ok ( k = 1, .. n ( k = 1, .. noo))
total cost after all operations*total cost after all operations* CCpcpc = C = Cmm + n + noo ( C( Co o TTpp + C + Cno no ))
* assuming T* assuming Tpkpk and C and Cnoknok are the same for each operation are the same for each operation
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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(Co o TTpp + C + Cno no )]t/ )]t/ MLTMLT*using average T*using average Tpp and C and Cnono
total cost per part including WIPtotal cost per part including WIP TTCCpcpc = C = Cpcpc + (C + (Cmm + C + Cpp)t/MLT)h dt)t/MLT)h dt
where Cwhere Cpp = n = no o (C(Co o TTpp + C + Cno no ) )
thenthen TTCCpcpc = C = Cpcpc + HC + HCpcpc
wherewhere HCHCpcpc = holding cost for WIP = holding cost for WIP HCHCpcpc = = (C(Cmm + C + Cpp/2) h (MLT)/2) h (MLT)
oo
MLTMLT
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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 + Cpp = C = Cmm + n + noo ( C( Co o TTpp + C + Cno 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 = (Cmm + 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 + Cpp + HC + HCpcpc = 700.00 + 38.08 = = 700.00 + 38.08 = $738.08/pc$738.08/pc
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
JIT production systemsJIT production systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
JIT production systemsJIT production systems
JIT must have:JIT must have:
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.
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
JIT production systemsJIT production systems
JIT must have:JIT must have:
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)
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
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!
ME 482 - Manufacturing SystemsME 482 - Manufacturing Systems
What have we learned?What have we learned?
Production planning, scheduling Production planning, scheduling and controland control