ie 527 chapter 16 scheduling for smooth flowweb.utk.edu/~kkirby/ie527/ch16.pdf · 2002-04-09 · ie...

1

IE 527Chapter 16

Scheduling for Smooth Flow

2

Flow

v Characteristics of efficient production- Jobs and materials flow smoothly- Production lead time is value-added processing time- Jobs hardly ever wait

v Smooth production flow is largely a matter of productionscheduling.

v Production leveling techniques to hold frequency and sizeof changes to a minimum:- Leveling with segmented batch- Leveling with mixed model assembly

3

Scheduling Under DifferentCircumstances

v Production philosophy• Make-to-stock• Assemble-to-order• Make-to-order• Engineer-to-order

v Final assembly schedule versus Master ProductionScheduling

v Modular BOMs

v Planning BOMs

4

Production Leveling

5 10 15 20

ABC

5 10 15 20

5 10 15 20

ABC

ABC

Consecutive Work Shifts Time


Batch Sizes Different

IntervalsDifferent

Batch Sizes Same

Intervalsthe Same


Intervalsthe Same,SmallerBatches

5

Variation in Schedules

v Types of variation:

– Size of production runs (batch size)– Frequency of production runs (batch interval)

v Demand levels vary because of:

– Sales Fluctuations– Promotional schemes

– End-of-month quotas– Etc.

v Result: Management causes fluctuations as a result of above causes.

Time

Dem

and

6

Identify Major Sources ofDemand Variation

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

50

100

150

200

250

300

350340

Avg Demand

85

Time (Weeks)

Scheduled

7

Impact of Variation in Schedulesv Common techniques to absorb variation is WIP buffers and raw

materials.

v In-process buffers and work backlogs are one tactic for levelingproduction.

v An alternative tactic is to level the production schedule.

– Establish a MPS where every product is produced on aregular basis with a fixed batch size.

– The smaller the batch size and interval, the more level theschedule and smoother the flow of materials plant-wide.

8

Requirements for Leveling ProductionSchedules

v Continuous, stable demand (or a forecasting system that allows forrapid changes to changes in mix or volume)

v Short setup times

v Production = Demand

v Significant variability in demand may force holding inventory (orinventory at some downstream operation based on customer LTrequirements).

v Cannot afford to hold inventory for sporadic demand

v Manage demand to minimize variation

9

Continuous, Stable Demand

v Aggregate forecasts are much more stable than forecasts forindividual products.

v Example

10150Ford Explorer XLS 4WD 4dr SUV (4.0L 6Cyl 5M)


40250Ford Explorer Limited 4WD 4dr SUV (4.0L 6Cyl 5A)

100500Ford Explorer Limited 2WD 4dr SUV (4.0L 6Cyl 5A)

5100Ford Explorer Eddie Bauer 4WD 4dr SUV (4.0L 6Cyl 5A)

50250Ford Explorer Eddie Bauer 2WD 4dr SUV (4.0L 6Cyl 5A)


50300Ford Explorer XLT 2WD 4dr SUV (4.0L 6Cyl 5A)

20100Ford Explorer XLT 4WD 4dr SUV (4.0L 6Cyl 5A)

Standard DeviationAverage Daily DemandProduct

( ) 05.147505100406010305020 deviation standard Overall

2250 250100500250400150200300100 demand Overall222222222 =++++++++=

=++++++++=

10

Customer/Product Segmentation

v Segment customers and/or products into the following categories:

1. High volume, common processes (no special setups or operations).

2. Substantial volume, and much process commonality (as well asprocess time commonality as much as is possible.)

3. Low volume, sporadic orders, little process commonality

The hope is that 20 to 40% of your customers/products will generate70 to 90% of your sales. Go after categories 1 and 2 above and thatwill provide much stability to the overall schedule.

11

Short Setup Times

v Short setup times allows the manufacturer to produceaccording to demand.

v The more setups allowed þ the smaller the batch size þthe easier it is to produce according to demand þ bettercustomer service level þ the smaller the amount offinished goods required þ the less investment of WIPrequired

v The more that a plant may produce according to demandþ the more repetitive the schedule þ the smoother theflow þ the more level the production schedule

12

Production Equals Demand

v The goal of each production run should be to matchcustomer demand and scheduled output, not to maximizeoutput.

v Batch size should be adjusted as necessary to match upwith customer demand.

v Focus of production should be on aggregate demand.

- Improved accuracy at the aggregate level (law of largeno’s)

- Multiple aggregate forecast and establish mix %(historical %)

13

Level Production

v Must determine the length of time over which to levelproduction

v Must forecast demand over that timev Re-examine the time frame to ensure its validityv Are WIP levels included in the analysis?v Take into account the strategic plan:

– Is the production level set to ensure no stock-outs?– Does the strategic plan allow stock-outs to maintain a

level production schedule?v Can the suppliers meet this production schedule?

14

Level Production / Seasonality

Level production schedule with seasonal variation

Seasonal demand

Specify months for each season and then assume twenty days in a month. Thisresults in the following weekly requirements:

May want to level production over the year to buffer against variation.

Total UnitsSeason

100,000Fall

50,000Summer

19,000Spring

9,000Winter

Sep. – Nov.

Jun. – Aug.

Mar. – May

Dec. – Feb.

Months Units/monthUnits/day

33,333.31,666.67

16,666.67833.3

6,333.3316.67

3000150

15

v Previous slide assumes an organization has sufficient capacity tofollow demand up as it increases.

v Also assumes that the organization has access to “temporaryemployees” that can move in and out of the organization as demandchanges.

v It is much more common that firms with seasonal demand level loadstheir schedules - pre-builds product that they think will be ordered bycustomers.

v These firms must have good forecasting systems and be able to reactvery rapidly to changes in volume or mix.

Level Production / Seasonality

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Level Loading Schedules

v Develop master production schedules that have the same output inevery period.

v Establish what must occur in terms of changeovers per period forschedules to be level.

v Establish a plan to make schedules more level over time

The plan should include an estimate of the resources required, thetimeline for completion, and the assignment of individual responsibility.

Avg.

Pro

duct

ion

Time

Avg.

Pro

duct

ion

Time

17

Level Production of Four Products

• Assume that a forecast for production has been developed for three• products as follows:

• There are more products, but these are the ones with the highest• volume. One Possible schedule:

• Four changeovers per month

2,400Z

4,800Y

7,200X

9,600W

DemandProduct

3,200W3,200X

Week 2

4,000X2,400Y

Week 3

2,400Y2,400Z

6,400W

Week 4Week 1

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Other Level Schedules

Smaller Batches Schedule #1

16 changeovers per month.

640 changeovers per month!!

2,400W1,800X1,200Y

600Z

Week 2

2,400W1,800X1,200Y

600Z

Week 3

2,400W1,800X1,200Y

600Z

2,400W1,800X1,200Y

600Z

Week 4Week 1

60W45X30Y

15Z

Hour 2*

60W45X30Y

15Z

Hour 3*

60W45X30Y

15Z

60W45X30Y

15Z

Etc.*Hour 1*

*Assume 4 weeks, 5 days, and 8 working hours per month.

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Leveling Problem #1

Forecast annual demand for a product line is given below. Assume 50weeks per year, five days per week.

(a) Develop a level loaded weekly schedule considering the total forecasted demand. What available time is consumed in changing product over?

(b) Develop a level loaded daily schedule and estimate the changeover time required.

Setup Matrix (minutes)

-201520D

30-1020C

1525-10B

201520-A

DCBA

37,500D

50,000C

75,000B

150,000A

Annual DemandProduct

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Cooperation Is Requiredv Functions to be represented:

Sales/ Marketing ProductionEngineering Finance

v How much weekly / daily flex capacity is available?

v Marketing must coordinate promotions to ensure that production cankeep up with sales (avoid amplifying demand variation).

v Finance can evaluate the dollar ramifications of stimulating or slowingdown demand, as well as adjusting capacity (adding shifts or OT).

v Design engineers must design products with common parts, and to beproduced ( as much as possible) on current processes.

21

Level scheduling in Pull Production

v Only operation scheduled in a pull system is typically the mostdownstream operation.

v If the final operation is an assembly line, then the schedule thatresides there is called the Final Assembly Schedule(FAS).

v In a multiple product facility, every product could have its own FAS.This is typically not feasible.

v Assembly line runs a mixture of products (mixed model).

Products are interspersed and produced in a mixed sequence. Thisresults in a smooth, steady demand for the upstream operations.

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Mixed Model Schedule

Assume the products involve similar components, technology, andprocessing steps, and thus can all be assembled at the same finalassembly stage.

1. Determine the daily requirements (5 days per week)

318W

25Z

76Y

155X

Weekly DemandProduct

25/5 = 5Product Z

76/5 = 15.2Product Y

155/5 = 31Product X

318/5 = 63.6Product W

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Mixed Model Schedule

• 2. Repeating Sequence -- determine the largest integer thatdivides

• evenly into daily requirements of all products. (5)

§ The ratio is 12.72 : 6.2 : 3.04 : 1 or 13:6:3:1 and the sum of the rationalnumbers is 23 so there will be a 23 unit sequence.

• How many times will this sequence be repeated per day?

• 3. Determine the Product Ordering within the Repeating Sequence• Sequence #1: W W W W W W W W W W W W W X X X X X X Y Y Y Z• Sequence #2: W W X W Y W X W Z W X W W Y W X W W X W Y W X• Are there better sequences?

5/5 = 1Product Z

15.2/5 = 3.04Product Y

31/5 = 6.2Product X

62.4/5 = 12.72Product W

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Problem #2

Develop a mixed model repeating sequence for meeting a daily production requirement of 48 model As, 24 model Bs, 12 model Cs, 36 model Ds, and 24 model Es.

1. How long will the sequence be?2. How many units of each model will be in the sequence?3. What is your rationale for placing specific models throughout the sequence?

25

Alternative Forms of Mixed Model

v AAAABBC versus AABABAC?

Which is better? Why? What would be an example case whereAAAABBC would be better?

v AAAAAAAABBBBCC versus AABABAC?

Again, which is better? What would be a situation where the firstoption would be better?

v Procedures for determining the minimum ratio requires some adhoc adjustments on most occasions.

v Monden in Toyota Production System has some heuristics fordeveloping mixed model sequences.

26

MMP Requirements

v Flexible workers

The greater the level of flexibility (within reason) the lessdisruption created when problems occur due to quality,cycle time variation, or insufficient capacity.

Workers need to have the flexibility to move where theproblems are to balance the workload.

Navistar and one up and one down!

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MMP Requirements

v May provide incentives for workers by paying-for-skills.

v Because of this requirement for flexibility, method sheets and operationaldefinitions for each model need to be very visual.

v Example: Johnson Controls, who supplies Toyota.

Attach door to car.

Attach carpet to car.

Insert seats in car.

KnowledgeOperation

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v Quality Assurance

People have to remember a lot when working on multiple models.

Must incorporate mistake proofing on product and machines, sourceinspection, and andon lights and cords.

v Toyota in George town

1700 shutdowns per shift - loss of 6% production time. But problemsare identified and solved when they are small. This principle of gettingto problems when they are small is significant!

MMP Requirements (Continued)

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v Small-Lot Material Supply

v Options for material support for mixed model is to have synchronizedsupplies from both inside operations and suppliers to the FAS or tohave vast quantities of material on the floor.

v Not only need to have synchronized delivery of materials, but theschedules have to be linked (continuous communication), because theschedules could change quickly ( e.g.,problem with a unit coming outof the paint line requires re-cycling).

v Also must have several deliveries of material per day in order toprotect the space.

MMP Requirements (Continued)

W W X W W X Y WW

WW

XW

WY

30©1999, Lean Enterprise Systems Design Institute, The University of Tennessee

Synchronous Schedules Kanban "Pull" - Any Option

BUILD SEQUENCE

B A C

A B A B CSYNCHRONOUS SCHEDULE-PUSH

BUILD SEQUENCE

"PUSH"

BUILD SEQUENCE

BUILD SEQUENCE

"PULL"

KANBAN "PULL" FLOW PROCESS

BUILD SEQUENCE

COMPONENT FOR MODEL A

COMPONENT FOR MODEL B

KANBAN "PULL" FLOW PROCESS

Use "in-process" Kanb ans to

balance cycle times to main

process takt time.

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Advantages of MMP

v All advantages of level production schedules- Low variation in production schedules- Low WIP inventory- Reduced lead times- Ability to meet demand with lower average capacity

v Elimination of losses during changeover- On a traditional assembly line major downtime is created

when changing from one product to another- Must aggressively address the changeover issues

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v Cross-trained workers are more attentive to problems andmotivated to eliminate them- Batch runs of models tend to hide defects- In MMP a problem not fixed occurs over and over again- Need to address visual control because of the added

complexity

v Traditional assembly lines are more difficult to balance thanMMP line- Almost always are imbalances between stations and when

running in batches the same stations are always overloaded- Running mixed model creates heavy work load, then reduced

workload as different models are worked

v Fewer losses from material shortages

Advantages of MMP (Cont.)

33

Production Scheduling and Variety

v Fewer numbers of end items, greater volumes for eachmakes scheduling easier- Unfortunately, the converse is true.

v To address this issue (product variety / product volumecombinations) companies modify their definition of an end-item to whatever works best for them.

v The definition will vary depending on whether theoperating environment is make-to-stock, assemble-to-order, or make-to-order.

34

Production Philosophies

v Make-to-stock (MTS)

- Production typically based on a forecast- Very often will have finished goods inventory- Finite number of end items- Few products produced in large volumes- Each product typically contains a large number of parts- If you do not have the product, customers will goelsewhere

BOM for the MRP system will be one BOM and MPS foreach end item.

35

v Assemble-to-order (ATO)

• Produce subassemblies according to a forecast• Combine the subassemblies in unique combinations according to customers needs (e. g., computers and automobiles)

• The focus in ATO is on the subassemblies; the forecastswill be at subassembly level; the MPS will be built at thesubassembly level

• Subassembly options will be built prior to customer orders.

• BOMs maintained will be at the subassembly level

Production Philosophies (Cont.)

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v Make-to-order (MTO)

• Produce products according to customer orders• Carry little or no FG because of the risks involved• Produce many different kinds of products using a relatively

small number of components (pharmaceuticals)• Related philosophy is engineer-to-order, where the lead time

includes designing as well as building the products• If number of products is reasonably small (i.e.,100) then all

products are included in the MPS• There will be a backlog of orders and the orders are selected

and inserted into the schedule according to priority and capacity

• If the number of items is very large, then a MPS will be developed for a family of products, with the anticipated demand for components based on historical percent mixes

Production Philosophies (Cont.)

37

Product Structures and MPS Levels

Materials

Products

MPS

Products

MPS

Materials

ProductsMPS (few products)

MPS (many products)

Materials

Items at the narrowest part of each product structure should be the itemsupon which requirements planning (MRP) and MPS are based

38

Final Assembly Scheduling / MPS

v MPS often portrays anticipated orders or forecasted demand

v FAS typically portrays actual orders

v MPS drives material procurement and preparation to do work, whilethe FAS drives the actual execution of work

v Production and procurement lead times are the determining factor insetting the time horizon for the MPS

v The time horizon of the FAS must cover only the time when thesubassemblies or components of an end item become available andwhen the production of the item is completed

39

Make-to-Stock

v When we understand our demand levels, we want toproduce the goods with a uniform schedule.

v Goal: Maintain a high customer service level with minimalfinished goods inventory.

v Can you think of some make-to-stock companies?

40

Creating a Uniform Production Schedule

Demand Volume and Scheduled Production Volume

Perform a Pareto Analysis to analyze the data. Should be able to produce all of thedemand if we schedule an average production of 9500/20 = 475 units per day.

Make To Stock

ProductYearly

Demand PercentageDaily

ProductionWeekly

ProductionMonthly

ProductionA 15000 27.74 60B 14000 25.89 56C 12000 22.19 48D 2880 5.33 11.52E 2600 4.81 52F 2400 4.44 48G 1000 1.85 20H 950 1.76 19I 800 1.48 16J 750 1.39 15K 500 0.92 10L 450 0.83 37.5M 300 0.55 25N 250 0.46 20.83333333O 200 0.37 16.66666667

Total = 54080 100.00 43880 9000 1200

41

Level Daily Production Schedule

Assuming processing times are the same for all products. Production varies fromday-to-day in order to account for those products only produced once per week ormonth.

Product 1 2 3 4 5A 75 75 75 50 25B 65 65 65 20 65C 55 55 20 55 55D 0 0 20 20 20E 52F 48G 20H 19I 16J 15K 10L 21MNO

Week (Days)

42

Example II

• A process produces three products X, Y and Z.

• A production day contains twenty-four hours.

• Changeovers take two hours.

• The process produces 33 units per hour.

• Demand is 600 units per day ± 10%.

• Two hours per day are reserved as flex capacity.

• How many changeovers can be performed per day?

43

Example I (Cont.): Allocating Change-Over Among Products

Product Average DailyDemand

X

Y

Z

400

100

100

44

Fixed Cyclic Production Sequence:

XYZXYZ…Product Average

DailyDemand

Frequency ofProduction

AverageBatch Size

AverageInventory =Batch Size/ 2

X

Y

Z

Total

400

100

100

600

1.5 days

1.5 days

1.5 days

600

150

150

300

75

75

450

45

Demand Based Fixed ProductionSequence:

XYXZXYXZ...Product Average

DailyDemand

Frequency ofProduction

AverageBatch Size

AverageInventory =Batch Size/ 2

X

Y

Z

Total

400

100

100

600

1 day

2 days

2 days

400

200

200

200

100

100

400

46

• Define the square root ratio as:

• where Di = average demand for item i. To minimize total inventory:– The fraction of changeovers allocated to product i should be equal to

SRR(i)– The relative batch sizes should be proportional to SRR(i)– The relative intervals between batches should be inversely

proportional to SRR(i)

Guidelines for Building Demand BasedFixed Production Plan

iDSRR(i) =

∑i=1

n

iD

47

Computing SRR

iDiDi

X

Y

Z

400

100

100

20

10

10

.5

.25

.25

= 40

iDSRR(i) =

∑i=1

n

iD

∑i=1

n

iD

48

Example II

• A process produces 11 products.

• The process runs 6 days per week.

• There is time available for 18 changeovers per week.

• The table on the following page shows the computation ofthe number of times each product is to be produced per week(based on the SRR) and the average batch size for eachproduct.

49

Product DemandSRR

BatchesPer wk. =18*SRR

AverageBatch Size

ABCDEFGHIJ

K

3609498

413554171073709524101840

8191405

625

6022

7433844943293725

0.120.04

0.140.060.160.090.080.050.070.05

21

31321111

1805498

18061073236512051840

8191405

625

iDiD

520=∑i=1

n

iD

50

A Note about the Previous Examples

v The example provides information about how to cope with larger batchsizes.

v The goal of this scenario is to reduce setup time. When setup time isreduced, then the number of changeovers is increased!

v This will allow us to produce according to demand as we decrease oursetup times in order to reduce our batch sizes.

v Example: If we have an hour a day for changeovers and changeoversrequire 30 minutes, then we can changeover our process 2 times.

If we reduce our setup time by half to 15 minutes, we can performtwice as many changeovers (4 setups).

51

Assemble-to-Order

v For a large number of different products (1000s, 10,000s, etc.)combinations of styles, options, or features you cannot anticipate enditem demand, plan production, or maintain a detailed BOM for each.

v Must use Modular BOM

BOM is maintained for each subassembly option or component option,but not for individual final products.

v Can you think of some examples of Assemble-to-Order?

52

Modular Bill Example

Icelandic PearlSunlit SandSterling MistSatin Blue PearlMajestic BlueMerlotGray LustreSherwood GreenSuper Black

Paint

Blonde LeatherBlack LeatherFrost LeatherBlack ClothBlonde ClothFrost Cloth

Seats

6-Disc CDAutochanger Bose® AM/FM/CD/cassetteaudio system (200 watts)Premium AM/FM/CDcassette audio system (120 watts)AM/FM/cassetteaudio system (60 watts)

Radio

15" Wheel covers16" Aluminum alloy wheels16" Sport aluminum-alloy wheels17" Aluminum-alloy wheels

Wheels

222-hp3.0-literV6 engine227-hp3.0-literV6 engine

Engine

4-speed automaticoverdrive transmission5-speed manualtransmission

Transmission Body

Nissan Maxima

53

How many types of cars are there?

v Paint (9)v Seats (6)v Radio (3)v Wheels (4)v Engine (2)v Transmission (2)v Body (1)

54

Assemble-to-Order

v Where many combinations of options exist, it is easier toforecast demand for options than for final products.

v Even though demand for the final product might be highlyvariable and erratic, the subassemblies themselves (whenaggregated over all products) is often stable andpredictable.

v Common practice is to capture overall demand(aggregate) and multiply that value by the percentageexpected to require that particular option.

55

Developing Modular Bills

v When you do not have modular bills, and want to restructure theBOMs for a group of product models into modules:

• First look at the level one components in the bills of product models to see which are common components and which are unique components.

• Then cluster the components into the categories they have in common.

• For those components that cannot be assigned to categories, lookat the level two components for commonalities.

56

Modular Bills - An ExampleComponents in Level 1 for 4 models

Nissan Maxima

GXE SE GLE20th Anniv.

5-Speed manual overdrivetransmission

15" Wheel covers and tires

Chrome grille surround anddoor handles*

GXE Comfort andConvenience Pkg.

Steering wheel

4-wheel Anti-lock BrakingSystem (ABS)

Independent type front strutsuspension

Automatic on/off halogenheadlights


16" Sport aluminum-alloywheels and tires

Black grille surround andbody-color door handles

SE Comfort and ConveniencePkg.

Leather-wrapped shifter

Steering wheel



Halogen fog lights


16" Sport aluminum-alloywheels and tires

Sport-tuned suspension

Chrome grille surround anddoor handles*

8-way power driver's seat


Leather-wrapped steeringwheel



Halogen fog lights


Auto-dimming rear view mirror

Cargo net


Limited slip differential

Sport-tuned suspension

Leather-wrapped steeringwheel



Halogen fog lights


Black grille surround andbody-color door handles

17" Performancealuminum-alloy wheels

Brushed metallic shifter



Cargo net

4-speed automatictransmission


Power sliding glass sunroof

*Note: There are nine body colors. Therefore, thereare ten colors of door handles (nine colors andchrome).

57

Modular Example – ContinuedLevel 1 and 2 Components

Chrome grille surround and door handles

Chrome surround

Chrome door handle cover

Springs

Hinge

Lock mechanism

Black grille surround and door handles

Black surround

Icelandic pearl door handle cover

Sunlit sand door handle cover

Sterling mist door handle cover

Satin blue pearl door handle cover

Majestic blue door handle cover

Merlot door handle cover

Gray lustre door handle cover

Springs

Hinge

Lock mechanism

Sherwood green door handle cover

Super black door handle cover

Leather-wrapped steering wheel

Leather

Steering wheel

String

GXE Comfort and Convenience Pkg.


Cargo net


SE Comfort and Convenience Pkg.


Cargo net


Power sliding glass sunroof


Leather

Shifter

String

Brushed metallic shifter

Brushed metallic cover

Shifter

58

Modular Example - Continued

v Common components for all models on level 1:• Independent type front strut suspension• 4-wheel Anti-lock Braking System (ABS)• Automatic on/off halogen headlights

v Common components for all models including level 1 and 2:• Springs• Hinge• Lock mechanism• 8-way power driver's seat• Cargo net• Auto-dimming rear view mirror• Shifter• String

v The BOM is less complex when we include level 2.

59

Modular Bills - Continued

v When the number of possible product models is very large, the number ofmodular bills will be much smaller than the number of models.

v Usually, a module is a subassembly (could be a component) that is produced andheld in stock until customer demand occurs.

v The product lead time to assemble modules into a final product is onedeterminant of the level of the item chosen for modularization.

v Using higher level modules (assemblies of subassemblies) to reduce assemblylead time will increase the quantity of inventory held, as well as the value of theitem held.

v Modular bills elevate lower-level items in the BOM to level zero (end item status)and eliminate the need for the final product level zero item.

60

Modular Bills - Continued

v The further the product travelsthrough the production process, themore specialized it becomes.

v The more WIP held downstream,the more expensive the value of theWIP.

v Want to maintain WIP at the furthestpoint upstream and still obtain thelead times.

v Example: Quoted lead time = 9days and shipping requires 2 days.

Need to maintain inventory after P3in order to meet quoted leadtimes.

3 da

ys

3 da

ys

3 da

ys

3 da

ys

3 da

ys

P1P2 P3 P4 P5

61

Planning Bills

v When the number of possible final products is very large, a typeof modular bill called a planning bill is used for productionscheduling.

v Planning bills simplify forecasting and production scheduling.

v It is relatively easy to forecast the percentages of products thatwill involve different options from sales records andconversations from customers.

v A Planning bill does not specify the exact amount of eachproduct to produce, but it does specify the amount of materialsand subassemblies needed to fill actual orders in MTO or ATOfactories.

62

Paint

Satin Blue Pearl 2% (48)

Majestic Blue 4% (96)

Merlot 10% (240)

Example Planning Bill

Icelandic Pearl 15% (360)

CommonParts Seats Wheels Transmission

If end item demand is 2400 units per week, then the number of each of themodules required to support that production level is shown in bold in theparentheses.

Sunlit Sand 3% (72)

Sterling Mist 6% (144)

Gray Lustre 12% (288)

Sherwood Green 18% (432)

Super Black 30% (720)

Body 100% (2400)

Black Cloth 32% (768)

Blonde Cloth 24% (576)

Frost Cloth 14% (336)

Blonde Leather 10% (240)

Black Leather 12% (288)

Frost Leather 8% (192)

17” Aluminum alloywheels 16% (384)

15” Wheel Covers 38%(912)

16” Aluminum alloywheels 24% (576)

16” Sport Aluminumalloy wheels 22% (528)

4-speed automaticoverdrive transmission

78% (1872)

5-speed manualtransmission 22%

(528)

63

Planning Bills

v FAS is modified either weekly or daily to reflect actual customerdemand (orders received).

v Since demand will likely vary from the average percentages provided,some safety stock for some of the modules may be necessary.

The data (by module) to do this can be captured from historical data.

v The averages and variation must be evaluated periodically todetermine whether they are still valid estimates of requirements.

64

Make-to-Order

v In a make-to-order environment, leveling production becomesmore difficult.

v You will generally be dropping confirmed orders into a schedulefrom a backlog of orders.

v Level schedules can possibly be developed if close attention ispaid to available capacity at the time due dates are provided tocustomers.

v If insufficient orders are available to fill the capacity available,then demand variation is likely to occur. MTO manufacturers aregenerally not willing to take the risk that a pre-produced unit willbe not be sold.

v Can you think of some examples of a make-to-orderenvironment?

65

Minimizing Scheduling Problemsv Simplify the BOMs (two levels - end item/family and

components/subassemblies).

v Use common parts as much as possible and use simple visualcontrol to track inventory.

v Do not misallocate capacity. Use pull execution systems toavoid doing it.

v Produce in lot sizes that are small and easy to count.

v Understand capacities and do not run upstream operations ifdownstream operations are clogged up for whatever reason. Theupstream operation being a bottleneck would be an exception.

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Avoiding Scheduling Problems

v Use simple visual control systems-Production schedules posted- Andons and status boards- Production procedures and standard operations charts- Charts of goals versus performance- Use of kanban cards and standard size containers- Status of upstream and downstream operations- Use a takt time clock

v Use days or hours (not weeks) for planning lead times.

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Lean Enterprise: Hybrid Control SystemTest

Low Product Variety High

Low

HighV

olum

e

Hybrid Control Systems:

MRP Plan/Pull Execution

PULL

ThirdDimension:Constraint

Management

MRP PlanPull Execution

Traditional MRPPUSH

ie 527 chapter 16 scheduling for smooth flowweb.utk.edu/~kkirby/ie527/ch16.pdf · 2002-04-09 · ie...

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