WHITEPAPER REAL TIME PLANNING & SCHEDULING

Planning and scheduling involves the whole company. Starting from a strategic sales forecast, the production schedules of the factories and single resource rosters are developed. This is an important task for achieving competitive advantages through operational excellence in the manufacturing process. State-of-the-art rules-based schedulers with semi-manual reorganization of tasks are not able to support factories in reaching this operational excellence. iFRP goes beyond that, being the only true optimizer that calculates the best production schedule in real-time.

Real TimePlanning & Scheduling Table of Contents

1. Preface ............................................................................................................................... 3 1.1 Benefits of iFRP: Intelligent Scheduling in Production Planning ............................. 3 2. 2.1 2.2 2.3 The Evolution of Planning and Scheduling ................................................................... 3 Planning and Scheduling: The Basic Concept .......................................................... 3 Why is Planning and Scheduling so Important? ....................................................... 5 Planning and Scheduling in General A Historic Overview ................................... 9 Material Requirement Planning (MRP) .............................................................. 9 Manufacturing Resource Planning (MRP II) ..................................................... 10 Advanced Planning and Scheduling (APS) ....................................................... 10 Detailed Production Scheduling (DPS) .............................................................. 11

2.3.1 2.3.2 2.3.3 2.3.4 3. 3.1 3.2

iFRP Goes Beyond State of the Art ............................................................................ 12 iFRP Intelligent Scheduling ................................................................................... 12 Intelligent Scheduling How iFRP Works .............................................................. 13 Scenario description ........................................................................................... 13 Conventional Solutions ....................................................................................... 14 Example: Changing Factory Restrictions ......................................................... 14 iFRP Intelligent Scheduling .......................................................................... 14 Advantages over current approaches .............................................................. 14

3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 4

Summary ................................................................................................................................ 17

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Real TimePlanning & Scheduling

1.

Preface

1.1 Benefits of iFRP: Intelligent Scheduling in Production Planning

Planning and scheduling involves the whole company. Starting from a strategic sales forecast, the production plans for individual factories are developed. The material flow within each factory has to be controlled and production orders need to be allocated efficiently to individual machines in order to meet the desired goals in output, capacity utilization, cycle time, and efficiency. Inefficient planning and scheduling is often the cause of the gap between required and actual plant performance. Improper scheduling can cause high lead times due to synchronization problems or the occurrence of dynamic bottlenecks. These can cause delays on quoted delivery times. If a machine runs out of material due to bad scheduling, then production capacity is lost and delivery dates may be missed. Effective planning and scheduling can be a difficult task. Standard planning and scheduling solutions often have problems in utilizing the full capacity of a plant. They use heuristics (rules-based) systems that do not consider all relevant constraints and cannot react quickly to unexpected events. In many cases they are merely enhanced monitoring tools or they emulate the job of a manual planner. Even if they are faster than a human planner, their heuristic approaches do not reach the plants full potential. Often, they can only handle simple optimization criteria, such as due date or priority. iFRP is a unique real-time, event-based factory scheduler. The analytical iFRP solution does not rely on heuristics and calculates a true optimum in real time allowing factory staff to react quickly to unexpected events.

2.

The Evolution of Planning and Scheduling

2.1 Planning and Scheduling: The Basic Concept

Planning and scheduling in general is a company-wide task. It starts with a sales forecast and goes down to each single machine on the factory floor. Due to its complexity, planning and scheduling has to be supported by software mainly ERP and MES.

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Real TimePlanning & Scheduling

The graph below shows the planning and scheduling pyramid within a company.

Shop Floor scheduling depends on different data and functionality then ERP.

Planning and scheduling is an integrated task. Each layer in the scheduling pyramid depends on every other layer. In the planning and scheduling process, the upper layers (demand forecast, supply chain management and factory resource planning) determine when and where a certain quantity of a particular product is needed. ERP modules can perform this task. The factory floor needs to ensure that the factory output is in line with these forecasts. This; however, is not typically an ERP task. ERP systems simply do not have access to all relevant factory data. For example, ERP systems do not know the current state of machines (operational, maintenance status, off-line, etc.) on the factory floor or many of the constraints (machine capacities, staffing requirements, maintenance schedules, recipe management, etc.) which govern the production process. This data is available in MES systems. Ideally, the ERP system delivers the production targets and receives resulting production plans meeting these targets from the MES layer. So what happens on the shop floor and why is ERP-based scheduling insufficient? The factory floor deals with production orders. A production order is the basic line item of a production plan. Initially (prior to production planning) it consists of a product with an amount, due date, and list of machines which can process it. Eventually (after production planning is complete) it contains a scheduled start and end date and a selected machine on which it is to be processed.
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The production planning process must take into account all relevant constraints including the current state of the factory floor (what is produced where) and meet all other process requirements. Often, the number of constraints and their dynamic nature makes scheduling difficult. Existing solutions often use rules-based heuristics and the parameterized knowledge of factory staff to perform the scheduling task. These solutions imitate a human planner. Results from such systems may produce executable production schedules. But they rarely utilize the full potential of a factory. Planning and scheduling should not merely keep a factory running. It must be a tool for reaching operational excellence. It must find production capacities hidden by the constraints within the process and help in reducing setup times, meeting delivery targets, optimizing energy and staff use, leveraging existing resources, and much more.

2.2

Why is Planning and Scheduling so Important?

Planning and scheduling utilizes efficiency levers like energy savings or setup time reduction. An efficient planning and scheduling tool directly contributes to the company's financial performance. At the company level, cash flow and profitability are essential. Planning and scheduling can address the appropriate levers at the plant level to influence the companys overall performance.

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Real TimePlanning & Scheduling

The diagram below shows some of the efficiency levers of planning and scheduling and how they influence the company's performance.

Scheduling controls levers which directly influence the factory and company performance

The impact of scheduling on plant performance and utilization can have a great effect on operational excellence. In the following figure we show how factory success measures can be influenced by the optimization levers which planning and scheduling controls. This should give an idea of the important role which scheduling can play in utilizing and controlling these levers. Inventory Reduction Not all resources in a factory work at the same rate. Some machines are newer and faster, some can handle exotic products which may make them slower in certain cases. In addition the speed of machines is influenced by a wide variety of factors, e.g. product variants or events like late delivery of raw materials. These aspects cause different types of bottlenecks which impact the manufacturing process. Static bottlenecks include machine capacities and are known upfront. They do not move across the manufacturing process or the shop floor.

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Real TimePlanning & Scheduling

They do not need to be predicted and even simple production planning solutions take these bottlenecks into account. Dynamic bottlenecks only appear at certain times depending on the specific product variants which are currently produced. They may move across the process and shop floor and are difficult to predict. Few production planning systems take these bottlenecks into account. Event driven bottlenecks appear when an unexpected event occurs. This can be the break down of a machine or the loss of products due to quality issues or an unexpected high-priority customer order. These bottlenecks are inherently unpredictable and require quick reaction on the factory floor. Production planning systems must have a real-time capability in order to support factory staff reacting to unexpected events. Only quick and appropriate action can minimize the impact of an event-driven bottleneck on the production process. The standard approach to dealing with bottlenecks of any kind is the maintenance of inventory (safety stock) for all or at least for the most critical materials as well as the use of longer-than-necessary set up times to buffer unexpected delays. Efficient production planning, i.e., planning which can effectively and more detailed set-up matrices deal with every type of bottleneck manages production with significantly less inventory than a standard approach. Increase of Throughput Poor production planning can result in unnecessary idle times for resources and worse unnecessary setup times. Another reason for idling machines is the use of buffer times in order bridge small deviations from the schedule. This is intended to ensure that material and resources are available when needed. Allowing for these buffer times also simplifies the
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manual calculation of a production schedule by human factory staff. One advantage is a certain degree of predictability of quoted delivery dates. But this advantage does not come without cost. The same safety margins which guarantee delivery dates also push these delivery dates back. The diagram below highlights this behavior.
Final Assembly Component 1

Rule based scheduling

Component 2 Component 3 Component 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Manufacturing Days Final Assembly Component 1 Component 2

iFRP

Component 3 Component 4
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Manufacturing Days
Value adding manufacturing step Non value adding time

Quoted Delivery Day

Quoted delivery dates can be confirmed to customers to customers, even if buffer and idle time is reduced

A sophisticated planning and scheduling solution can reduce idle times by optimizing setups and reducing safety buffers while maintaining the same degree of predictability. Sales staff can commit to earlier delivery dates and still expect them to be met with a high degree of reliability. Eliminating idle times also results in cycle time reduction and improves factory throughput. Reduction in Operating Cost The reduction of idle times frees capacity hidden in the production process. More can be done with less. Planning and scheduling helps to reduce inventories by producing materials just-in-time. Optimized resource allocation helps to save energy which will become an increasingly important factory as energy cost are expected to go up in the future. Another lever is the reduction of waste. In some factories the production process cannot be stopped arbitrarily. Machines must produce something or they must be shut down for extended periods of time, for example, at the end of the year. If production is poorly planned a factory may be forced to produce waste just to keep machines running. An efficient scheduler can reshuffle waste production to the planned, end-of-year shutdowns, thus avoiding their production entirely.

by iFactory Inc., 2010, All rights reserved.

Real TimePlanning & Scheduling 2.3 Planning and Scheduling in General A Historic Overview
Scheduling solutions of the past 30 years were unable or only partly able to assist management in utilizing plant capacities. In the following paragraph we will discuss the most important scheduling approaches with their strengths and weaknesses.
Before midst 80s MRP MRP II APS DPS iFRP
Chronological sequence of planning and scheduling concepts

Midst 80s midst 90s

Midst 90s 2005

From 2005

From 2006

2.3.1 Material Requirement Planning (MRP) Material Requirements Planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. It creates a production plan by decomposing the bills of materials into sub-products and uses averaged production times for each process step. Combined with an infinite capacity scheduler MRP can deliver duty rosters for specific machines. However, MRP has some major drawbacks: Average production time: The system uses average production times for each production step. Improvements on the shop floor are not generally considered in MRP scheduling. They only lead to longer lead times, because each step must take the same average production time, even if it is in fact performed faster. If on the other hand a single step takes too long, then the entire schedule may become obsolete. Unlimited capacity: MRP calculations are based on the assumption that each resource has unlimited capacity. This is an unrealistic assumption. A production plan created based on this assumption does not fit the realities on the shop floor. Missing feedback: There is no closed-loop feedback between the participating modules of MRP, making it hard to react to internal and external events which may be disrupting the production process. No shop floor connectivity: MRP has no interaction with the shop floor; therefore, it cannot react to events. MRP is located at the ERP layer which uses a different data architecture than shop floor systems, which consolidate their data at the MES layer. Rules-based (heuristic) approach: MRP uses rules in order to calculate a production schedule. This is necessary due to efficiency issues. But these

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Real TimePlanning & Scheduling

rules can become invalid when events occur or the factory is changed in any way. 2.3.2 Manufacturing Resource Planning (MRP II) MRPII systems consist of finite capacity scheduling (FCS), capacity requirements planning (CRP), distribution resource planning (DRP) and other modules. MRPII facilitates the development of a detailed production schedule that accounts for machine and labor capacity. An MRPII output is a final labor and machine schedule. Data about the cost of production including machine and labor time, materials as well as final production numbers is provided from the MRPII system to accounting and finance. MRP II takes into account the real production capacity and thus overcomes one of the most critical shortcomings of MRP. It also has integrated closed-loop feedback Critical drawbacks remain: No integrated solution: Even though MRP II has integrated closed-loop feedback, the various modules and layers make calculations and communication quite inefficient. The large number of modules generates a tremendous communication overhead. No shop floor connectivity: Just like MRP the MRP II approach is an ERP layer application and unable to exchange relevant data in real time with shop floor information systems. Rules-based (heuristic) approach: MRP II uses rules-based algorithms for planning and, therefore, produces the inefficient schedules just like MRP. 2.3.3 Advanced Planning and Scheduling (APS) As seen before, traditional MRP and MRP II systems utilize a step-by-step procedure to allocate material and production capacity and plans them separately. Many MRP systems do not consider limited material availability or capacity constraints. Such approaches often result in unfeasible schedules which cannot be executed on the shop floor. Unlike previous systems, APS simultaneously plans and schedules production in an integrated approach which is based on available materials, labor and plant capacity. APS solutions appeared to be a tool for the factory director to achieve optimal plant performance. But soon it became obvious that APS could not deliver on its promise. Often, schedules turned out to be unfeasible on the shop floor because APS plans at an aggregated level using various assumptions regarding data and efficiency factors. No shop floor connectivity: Although APS is an integrated planning system, it is located at the ERP layer like MRP and MRP II. Therefore, it has no access to shop floor data. ERP requires different data than the shop floor,
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which forces APS to use simplifications and to plan at an aggregated level (resource classes instead of single resources). Furthermore, a shop floor planning and scheduling tool needs to react in real time to disruptive events. This would require the ERP system to be updated in real time with a huge amount of data and constraints. The ERP systems were neither made for such real time updates nor were they made to handle shop floor specific data. Rule-based (heuristic) approach: like the MRP approaches, APS uses rulesbased instead of analytical algorithms. This makes the approach fast, but the results are still inefficient schedules. APS proved to be a good solution for material flow planning above the factory level, but was not sufficient for detailed production scheduling on the shop floor. 2.3.4 Detailed Production Scheduling (DPS) To give planning and scheduling software access to shop floor data, the gap between ERP and shop floor level needed to be closed. Detailed Production Scheduling (DPS) is based at the MES level. Executable production schedules for the shop floor can be derived from ERP production targets originating from the business level. Whereas APS and MRP schedules tell when a certain quantity of products need to be finished, MES level scheduling details how to split these into production orders and individual resource duty rosters. The resulting production plans can be executed on the shop floor. Detailed production scheduling makes it possible to model each part of a factory and the production process instead of planning at an aggregate level. Furthermore, MES relevant data and constraints ensure that the plans are executable on the shop floor. For the first time, it became possible to replace manual scheduling by the factory planners on single resource level. Even if most of the drawbacks of the ERP planning and scheduling tools were overcome, DPS kept one major problem of these tools: Rule-based (heuristic) approach: To deliver fast results, especially when reacting to real time events, DPS solutions use rules for scheduling calculations. They work in a limited solution space and act like a manual planner would do. Even if DPS is fast, it only can explore local optima within the solution space of its rules, thus ignoring vast areas of the solutions space not covered by its rules. Furthermore, rules-based approaches are not robust under changes in factory layout, process changes, or new product variants. Often DPS systems are limited to a restricted number of constraints in order to keep complexity low and to increase calculation speed. While MES-based DPS are capable of some of the necessary planning and scheduling tasks; it falls short in allowing plants to reach their full performance potential. What factories now need is a planning and scheduling solution which enables them
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to utilize the advantages of the scheduling optimization levers in order to gain competitive advantages and operational excellence.

3.

iFRP Goes Beyond State of the Art

3.1 iFRP Intelligent Scheduling

Detailed production scheduling closed the gap between ERP and the shop floor, but it was unable to utilize the scheduling optimization levers. The results were not sufficient to solve efficiency and speed issues necessary to reach desired plant performance. The reason is the rules-based approach of the DPS solutions which is the major problem of all discussed scheduling approaches. They are not robust under changes, limited in their optimization capabilities and have problems with variations in the production process. Factories are under continuous change and rules-based solutions tend to lag behind. It takes time until sufficient knowledge has been developed and integrated into the rule set. During that timeframe performance is poor. The patented iFRP algorithm uses an analytical solution instead of rules. Each time a new production schedule is calculated, the whole factory with all its parameters and constraints is calculated again. Therefore, iFRP calculates a true optimum within the solution. In addition, iFRP deals with changes and events in real time without need for reconfiguration or reprogramming. This is possible due to the highly efficient calculation scheme of the algorithm, making planning and scheduling no longer dependent on rules. iFRP does not aggregate or reduce the possible solution space. iFRP is factories reaction delays in robust and can operate in rapidly changing environments (which most are) and delivers real-time results. This also is important for quick to disruptions of the production process, like machine breakdowns or material delivery.
MRP MES centric MRP II APS DPS iFRP

Integrated planning Analytical solution Real time capacity Comparison of existing planning and scheduling solutions among relevant dimensions for utilizing scheduling optimization levers

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Real TimePlanning & Scheduling 3.2 Intelligent Scheduling How iFRP Works
The following example shows the benefit of iFRP compared to traditional, rulesbased approaches. Rules-based solutions use a set of heuristics which cover the most common scheduling scenarios for the given production process. Rules-based approaches perform poorly when changes occur in the production process. If a machine is changed/added or new product variants are included, rules-based solutions have two possibilities, 1) Using the old heuristics for the new situation which decreases output quality or 2) adapting the rules. The latter option results in a customization effort for the solution and takes time to develop, meanwhile the production process may yet change again. Also, the heuristics are developed from the experiences of factory staff. These experiences also take time to develop and program into the set of rules. iFRP on the other hand does not use heuristics. It creates a mathematical model of the production process and solves this problem in an analytical fashion. It considers many possible schedules within this model and chooses the best one based on optimization criteria. This feature makes iFRP robust under changes in the factory layout or the production process. These changes result in a slightly different model which can be calculated in the same way. There is no need to update any rules. The following scenarios will further explain the scheduling capabilities of iFRP 3.2.1 Scenario description Scenario 1: Suppose the demand environment for a particular product requires three red products and three green products to be manufactured during the next production cycle. The products are produced on the same production line. The color is applied by a coloring device, which must be cleaned for 30 minutes before a new color can be applied. It is most optimal to produce all of the items of one color first (say reds first), do the change-over for the coloring device, and then produce the products of the second color. This production sequence has one downtime of 30 minutes to clean the coloring device Scenario 2: The Scenario 1 situation can be made more complicated. Lets assume that the products must be transported to a different factory in special transportation crates, which are limited in supply and depend on the shape of the product. Further, assume that two products of the red variety and one of the green variety are of shape A and the remaining products are of shape B. Further, assume that all of the crates required for shipping shape B products are currently in use. The previous production schedule for Scenario 1 (first reds, then greens) is no longer feasible. The third red product cannot be placed into a transportation crate because no crates for

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Real TimePlanning & Scheduling

this shape are currently available. In this situation, production scheduling must take crate availability (a factory restriction) into account. 3.2.2 Conventional Solutions The production planning problem is commonly solved by systems that possess knowledge about factory restrictions in the form of rules. These rules represent know-how which factory employees have developed over time while performing factory operations. In Scenario 1, one such rule would state: Produce same colors in sequence. In Scenario 2, the production rules would state: Produce same colors as long as transportation crates are available. The problem with such rule-based approaches becomes apparent when the factory restrictions change. 3.2.3 Example: Changing Factory Restrictions In the two Scenarios just considered, the situation may now be changed to upgrade the coloring equipment of the production line with an additional stand -by coloring device. This second coloring device can be used while the first device is being cleaned. More specifically, when a color change occurs, the second device can be rotated into the production line immediately while the first device moves out of it to be cleaned. The change-over time for color changes is thus reduced to zero. The introduction of the second stand -by coloring device totally changes the optimization problem. Any rules intended to optimize productivity by minimizing color change-over times have become invalid. The entire rule-based optimization scheme must be redesigned. 3.2.4 iFRP Intelligent Scheduling As demonstrated in the scenarios above, rules-based systems are fragile under changes in factory restrictions. Furthermore, rule-based optimization strategies are only as good as the rules system, i.e., the knowledge of individuals (often times not experts) who derived the rules. The iFRP approach to the production planning is not rules-based. It involves a computer-based system and method that simulates the factory shop floor and creates a virtual factory. This virtual factory is designed to provide the ability to simulate and assess any theoretically possible production sequence. By simulating many different sequences, an optimal sequence can be established based on user defined optimization criteria. iFRP is robust under changes in the factory restrictions. Each time there are changes, they are factored into a new virtual factory; and the optimization is determined to provide solutions for production planning. 3.2.5 Advantages over current approaches Currently, factory staff solves the production planning problem either manually or with the help of rules-based software systems. The manual process involves a
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factory employee who considers the current demand, the current state of the factory, and previous experiences gained during the operation of the factory to guess an optimal production sequence. The rules -based software system codifies the experiences of factory staff into rules and uses these rules to plan production. Therefore, a rules-based system solves the problem in the same way factory staff would solve the problem manually. Using rules -based systems may speed up the process. iFRP has a number of advantages over the currently used methods for solving the production planning problem.
Attributes of iFRP which addresses relevant optimization lever Scheduling optimization levers Reduction of cycle time Bottlenecks and real time reaction Cost reduction Green manufacturing Speed Robustness Unbiased solution Flexible optimization Analytic solution

iFRP's unique attributes enable it to maximize the scheduling optimization levers.

How these advantages participate in utilizing the efficiency of the scheduling optimization levers can be seen in the diagram below: 1. Speed: iFRP is very fast especially when compared to the manual process. The problem is typically solved in a few minutes, while manual solutions may take hours. The speed advantage depends on the complexity of the particular production environment. 2. Robustness: The algorithm does not depend on rules derived from a particular setup of a given factory. As demonstrated by means of example, any such rules become invalid if the factory setup changes. iFRP does not suffer from this drawback 3. Unbiased Solution: The number of theoretically possible production sequences can be extremely large because they depend on the number of different products which are to be produced during a given production cycle. Existing solutions do not consider the entire spectrum of possible solutions, but are biased by experience derived rules. The quality of the output (the optimal production sequence) depends on the quality of the rules and, ultimately, on the competence of the factory staff who developed the rules. iFRP considers the entire spectrum of possible solutions and calculates the optimal solution analytically unbiased by experience derived rules.

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iFRP CONSIDERS THE ENTIRE SOLUTION SPACE

12 10 8
STRATEGIC DECISIONS, E.G. COST

iFRP calculated optimum

6 4 2 0 1 S6 S5 S4 OPERATIONAL EXECUTION S3 ON PRODUCTION LINE 2 S2 7 8 S1 9

MES: suggested solution by rules engine

OPERATIONAL EXECUTION ON PRODUCTION LINE 1

iFRP operates in the whole solution space, not only at known local optima

4. Flexible Optimization: The optimization criteria are built into rules-based systems. Once a rules-based system is defined to optimize according to a certain criterion for example highest productivity then the optimization criterion cannot be changed. Within iFRP, the planning and optimization aspects are decoupled. The optimization criteria are input parameters for the production planning algorithm and can be easily changed or combined. 5. Analytic Solution: iFRP allows for easy changes to the Virtual Factory. Factory staff can plan changes in the factory by simulating these changes first in the Virtual Factory and analyzing the impact of these changes. This helps factory staff in the decision making process.

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Real TimePlanning & Scheduling

Summary

Planning and scheduling enables control of efficiency levers which directly influence factory and company performance. Reduction of inventories, increased throughput and reduction of cost help to reach sustainable competitive advantages. Planning and scheduling is not a local task; but integrated in a company-wide planning process contributing to the company's overall success. To utilize these gains, the planning and scheduling solution must do more than just deliver an executable schedule. It needs to deliver an optimal solution with regard to the desired goals while considering all types of constraints including dynamic and event driven bottlenecks. Rules-based systems and approaches to production planning are out of touch with the every day challenges on the factory floor and simply cannot deliver optimal results. iFRP is an effective real-time planning tool capable of controlling all optimization levers and providing savings by unlocking hidden capacity potentials in the production process providing a quick return on investment.

by iFactory Inc., 2010, All rights reserved.

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Real TimePlanning & Scheduling About iFactory Inc.

iFactory was founded in 2007 in the United States. The company offers a real time planning and scheduling solution for manufacturing processes. The iFRP Suite achieves operational excellence, predictability, and transparency in the entire manufacturing process through a unique and patentprotected algorithm. iFactory has offices in the USA, Germany and Brazil. iFactory and iFRP contacts in The United States and Europe Michelle Sullivan Phone: 503-719-2194 Fax: 270-916-6291 sales@ifactoryinc.com Claudio de Lyra Phone: +49-941-29066-170 Fax: +49-941-89975-779 info_europe@ifactoryinc.com

by iFactory Inc., 2010, all rights reserved. iFRP is a registered trademark of iFactory Inc. All used names of products and companies are properties of their relevant owners. The functionality of the described products is under frequent development and can change at any time. Shown examples have exemplary character only.
iFactory Inc. 1690 19th Street West Linn, OR 97068 USA

by iFactory Inc., 2010, All rights reserved.

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