Session 5 Capacity Management and Production Activity Control

Capacity Management

S&OP resource planning

Master Schedule RCCP
Capacity Management
o The function of establishing, measuring, monitoring, and adjusting limits of levels
of capacity in order to execute all manufacturing schedules
o Two Phases: Planning and Controlling
Planning is capacity available to meet the priority plan?
Controlling PAC monitoring, comparing to plan, adjusting
o Planning Levels
S&OP resource planning
Master Schedule RCCP
MRP:CRP
PAC input/output control and operations sequencing
Capacity
o The capability of a system to perform its expected function
o The capability of a worker, machine, work center, plant or organization to produce
output per time period
o UOM Standard hours, Ft, KG, NOT $
Capacity Planning Process
o Determine the capacity available
o Translate the priority plan into capacity required
o Add up capacities for each resource to compare to capacity available
o Resolve available capacity and required capacity
Capacity Available
o APICS the capability of a system or resource to produce a quantity of output in
a particular time period
Available time
Available time (hours) = number of machines x hours a day x days
a week
Utilization
Utilization = hours actually worked / available hours x 100%
Efficiency
Efficiency = Standard hours of work / hours actually worked x
100%
o Rated Capacity
A measure of the output that can be expected of a resource or system
such as a work center
Rated Capacity (standard hours) = available time x utilization x efficiency
o Demonstrated Capacity
The proven capacity calculated from actual past performance data
Demonstrated capacity Sum of standard hours for n past periods /
n past periods

Capacity Requirements Planning

o The lowest/most detailed level of capacity planning related to the priority plan
o Key Inputs
Load
Total load per period at each work center
o Obtain component requirements (due date/qtys from MRP)
o Determine operations time per work order at each work
center
o Operations time per work order = number of pieces x run
time per piece + setup time
o Load profile the sum of work order loads per time period
at each work center
Data Requirements
Data
Open shop orders
Planned order releases
Where work is done
Time needed (std hr)
Lead times
Work center capacity

Source
Shop Order file
MRP
Routing file
Routing file
Routing file/work center file
Work center file

Shop Calendar
Shows the actual number of working days available in each week
or month
Lead Time Elements
Manufacturing Lead Time
o Queue longest lead time in intermittent manufacturing
o Setup
o Run
o Wait
o Move

CRP Process
o Scheduling orders simulation
What if analysis not actual scheduling
Uses backwards scheduling
Operations time = run time + setup time
o Establishing load profiles
Load profile comparison of each work centers available capacity and
the load established by the planned and released orders for each time
period
o Resolve differences
Changing capacity
Overtime/undertime, hiring/layoffs, adding shifts, alternate
routings, subcontracting, reducing setup, improving processes
Altering load

Altering lot sizes or rescheduling

Production Activity Control
o Consists of planning, scheduling, and control of operations
o Objectives
Execute the MPS and MRP
Optimize use of resources
Minimize work in process (WIP)
Maintain customer service
o Functions
Plan/Replan
Ensure resources are ready when needed
Schedule start and completion dates at work centers
Implement
Gather information and prepare shop packet
Release orders to the shop floor as authorized by MRP
(dispatching)
Control
Establish/maintain order priority (done by MPS/MRP)
Monitor/control WIP, lead time, and queues
Track and report production
Report work center performance
Scheduling
o Objectives
Meet delivery dates
Effectively use manufacturing resources
o Involves
Establishing start and finish date for each operation needed to complete
an order
o Forward Scheduling
Activities are scheduled from a known start date through the finish date
o Backwards Scheduling
Activities are scheduled back from the due date
o Infinite loading
Assumes that capacity is infinite at any work center
o Finite loading
Assumes that there is a definite limit to capacity at any work center
o Bottleneck Scheduling
Throughput the bottleneck is the drum (schedule) that controls the
throughput of the entire system
Rope releases materials to the gateway work center at a rate that
protects the drum at the bottleneck
Time buffer allow time for work to flow from the gateway to the
bottleneck and makes sure the bottleneck is consistently utilized
o 5-59 dispatching rules and critical ratio
o 5-67/MM book Flow Control