Post on 31-Mar-2015
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Manufacturing Planning and Control
MPC 6th Edition
Chapter 7
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Capacity Planning and Management
Capacity planning and management addresses two managerial problems:
Matching capacity to plans–by either providing sufficient capacity to execute the plan or adjusting the plan to meet available capacity.
Consider the marketplace implications of faster throughput times–at the expense of reduced capacity utilization.
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Agenda
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Role of Capacity Planning in Master Planning & Control
The primary objective of capacity planning techniques is to estimate capacity requirements early enough to be able to meet those requirements
Flawless execution of the capacity plan allows the firm to avoid unpleasant surprisesInsufficient capacity leads to deteriorating
delivery performanceExcess capacity may be a needless expense
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Resourceplanning
Sales and operationsplanning
Demandmanagement
Master productionscheduling
Detailed materialplanning
Material andcapacity plans
Shop-floorsystems
Suppliersystems
Capacity Planning in the MPC System
Resource planning
Rough-cut capacityplanning
Capacity requirementplanning
Finite Loading
Input/output analysis
Long Range
Medium Range
Short Range
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Links to other MPC System Modules
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Capacity Planning Using Overall Factors (CPOF)
Simplest rough-cut capacity planning approach Data inputs from master production schedule Based on planning factors from historical data
(work center utilization, production standards) Overall labor- or machine-hour capacity
requirements are estimated from MPS dataEstimate is allocated to work centers based on
historical workloads Inherent inaccuracies may limit usefulness
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CPOF Example
Total required capacity = (33*0.95)+(17*1.85) = 62.80
Work center capacity = Historical percentage*Total required capacity
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Capacity Bills
Rough-cut capacity planning method that provides more direct link to individual end products
Bill of capacity indicates total standard time to produce one unit of an end product (by work center)
Master production schedule data is then used to estimate capacity requirements for each work center
Requires more data than CPOF procedure
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Capacity Bill Example
Std. Setup hours are spread over the standard lot size
Total hours include both std. run time and std. setup time
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Capacity Bill Example
MPS quantities are multiplied by bill of capacity to determine work center capacity requirements by period
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Resource Profiles
Rough-cut capacity planning technique that includes production lead time information
Provides time-phased projections of capacity requirements for individual work centers
More sophisticated approach but requires tracking of relatively short time periods (< 1 week)
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Resource Profile ExampleProduction of one unit of product A in period 5 requires production activity in periods 3, 4, and 5 and in work centers 100, 200, and 300
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Resource Profile ExampleRequirements (by work center and period) for one unit of end product are multiplied by the MPS plan to determine capacity requirements
These requirements are then summed over all periods to finalize the process
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Capacity Requirements Planning (CRP)
Capacity requirements planning differs from the rough-cut planning proceduresUtilizes time-phased material plan from MRPTakes into account materials in inventoryAccounts for the current status of work-in-processAccounts for service parts and other demands not
accounted for in the MPS Requires more inputs and more computational
resources
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Capacity Requirements Planning Example
Det
aile
d M
RP
Dat
a
Scheduled/planned quantity multiplied by processing time for work center
This process is repeated for each work center to complete the plan
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Scheduling Capacity and Materials Simultaneously
Capacity requirements planning doesn’t consider capacity when planning materialsAssumes that capacity can be adjusted,
given sufficient warning Planning capacity and materials at the same
time allows construction of a plan that works within current capacity constraints
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Finite Capacity Scheduling
Simulates job order start and finish times in each work center
Establishes a detailed schedule for each job in each work center
When a work center’s capacity is not sufficient for all planned jobs, prioritization rules determine which jobs will be shifted to later times
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Finite Capacity SchedulingProduct A does not consume all available capacity
Combination of all products consumes all available capacity in several periods
Planned orders are shifted to stay within capacity limitations
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Work Center Scheduling
Vertical Loading–each work center is scheduled job by job without consideration of other work centersIncreases capacity utilization but may result in more
partial job completion Horizontal Loading–jobs are scheduled through all
work centers in order of priorityLower capacity utilization but generally a higher
proportion of jobs are completed in a shorter time span (higher customer service levels)
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Finite Capacity Scheduling
The FCS plan is a simulation Randomness leads to actual times that don’t match
scheduled timesShould the work center wait for a job that isn’t
available on time (idleness = lost capacity) Over time, the accuracy of the plan deteriorates Frequent rescheduling may be needed to maintain
accuracy Rescheduling process is computationally expensive
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Advanced Production Scheduling (APS)
Expands Finite Capacity Scheduling to the entire product structure (end products and sub-assemblies)
Can lead to a significant reduction in lead times
Requires accurate scheduling parameters, flawless execution, and prompt recovery from any problems
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Capacity Management
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Capacity Monitoring with Input/Output Control
Planned inputs are determined by the capacity planning process
Planned outputs depend upon the nature of the work center Capacity-constrained–planned output is determined by
the processing rate of the work center Non-capacity-constrained–planned outputs match
planned inputs Differences between plan and actual must be
addressed (management by exception)
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Managing Bottleneck Capacity–Theory of Constraints
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Capacity Planning in the MPC System
Short-term capacity planning problems can be reduced by well-executed production and resource planning
Efficient use of sufficient capacity by a good shop-floor system reduces capacity issues
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Choosing the Measure of Capacity
Capacity can be measured in many ways Labor hours, machine hours, physical units, monetary units
The firm’s needs and constraints should determine the capacity measure
Trends Shrinking portion of direct labor Less clear distinctions between direct and indirect labor Reduced ability to change labor capacity Outsourcing Flexible automation/cellular technologies
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Using the Capacity Plan
Two broad choices are available when actual capacity and plan are mismatchedChange capacity–reduce or increase capacity
as indicated (within constraints)Revise material plan–change requirements
and/or timing to match available capacity The amount of material that can be produced
is limited by the available capacity, regardless of the material plan
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Principles
Capacity plans must be developed concurrently with material plans if the material plans are to be realized.
Capacity planning techniques must match the level of detail and actual company circumstances.
Capacity planning can be simplified in JIT environments.
Better resource and production planning processes lead to less difficult capacity planning processes.
Better shop-floor systems reduce the need for short-term capacity planning.
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Principles
More detailed capacity planning systems demand more data and database maintenance.
When capacity does not match the requirements, it isn’t always capacity that should change.
Capacity must be planned, but use of capacity must also be monitored and controlled.
Capacity planning techniques can be applied to selected key resources.
Capacity measures should reflect reasonable levels of output from key resources.
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Quiz – Chapter 7
Which capacity planning activities are considered long-range plans? Short-range plans? Medium-range plans?
Resource planning is most closely linked with which MPC element?
The capacity planning using overall factors (CPOF) technique is likely to perform poorly in a just-in-time (JIT) environment? (True/False)
Capacity requirements planning (CRP) ignores current finished goods and WIP inventory? (True/False)
According to the Theory of Constraints, bottleneck and non-bottleneck work centers should be managed similarly? (True/False)