Introduction to Materials

Management
Chapter 5 Capacity Management
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Basic Capacity Definitions
Capacity Required capacity needed to
produce a desired output in a given time
period
Capacity Planning determining the
resources and methods needed to meet the
priority plan
Capacity Control monitoring production,
comparing with the capacity plan, and taking
appropriate corrective actions
Capacity Management determining capacity
needed as well as providing, monitoring, and
controlling the capacity
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity versus Load
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity Planning Levels
Resource Planning Long range
resource requirements linked to the
production plan
Rough-cut Capacity Planning Used to
check feasibility of MPS
Capacity Requirements Planning
Detailed work center capacity plans
linked to MRP
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity Planning Levels
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity Requirements Planning
Inputs
Open Order File found as scheduled
receipts on MRP
Planned order releases from MRP
Potential future orders
Work Center file
Information on capacity in the work center
Move, wait, and queue time information
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Routing file the path that the work
will follow
Operations to be performed
Operation sequence
Work centers used
Potential alternative work centers
Tooling needed
Standard setup times and run times
Capacity Requirements Planning
Inputs - Continued
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Sample Routing File
Figure 5.3 Routing file
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity Available
Impacted by:
Product specification
Product mix
Methods used to make product
Pace of work
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Finding Capacity Available
Rated Capacity = (available time) x
(utilization) x (efficiency)
Available time number of hours a work
center can be used
Utilization = [(hours worked)/(available
hours)] x 100%
Efficiency = [(actual production
rate)/(standard production rate)] x 100%
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Capacity Load Sum of all time required
for orders on a work center - Example
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Example Load Profile
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Scheduling Orders
Back scheduling (the typical approach)
Start with the due date, use lead time
to find the proper start date for each
operation
Forward scheduling Launch the order
into the first (gateway) work center,
then use the lead times to find when
the order will be completed at each
work center
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Back Scheduling Example
An order for 150 of a component is due on
day 135
An order starts at the beginning of a day and
finished at the end of a day
Operation times for the 150 ordered:
Operation 10 4 days in work center 12
Operation 20 5 days in work center 14
Operation 30 1 day in work center 17
Operation 40 2 days in work center 03
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Data from the work center file
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The resulting work schedule
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The work schedule shown
graphically
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Making the plan
Introduction to Materials Management, 7
th
Edition
Arnold, Chapman, Clive
2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Managing the Plan Adjusting
Capacity
Use Overtime or Undertime
Adjust the number of workers
Shift workers from other work centers
Use alternative work centers to shift
load
Subcontract work