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Chapter Six – Production Activity Control

CPIM Exam – Basics of Supply Chain Management Practice Study Sheet  Ch... thumbnail 1 summary

CPIM Exam – Basics of Supply Chain Management Practice Study Sheet 

Chapter Six – Production Activity Control

Production Activity Control (PAC) is responsible for executing the master production schedule and the material requirements plan (also use labor and machines correctly, minimize WIP, and maintain customer service). The Materials requirements plan authorizes PAC to:

1. release work orders for manufacturing
2. take control of work orders and ensure timely completion
3. responsible for detailed planning of order flow through manufacturing
4. manage day-to-day activity

Dispatching is releasing orders to the shop floor as authorized by the material requirements plan

Control is 1) ranking orders by priority 2) compare actual performance of work orders to scheduled 3) monitor & control WIP, lead times and queues 4) Report efficiency, operation times, order quantities and scrap

Flow manufacturing (high volume standard products) can be repetitive manufacturing (cars) or continuous manufacturing (gasoline). Major characteristics

1. routings are fixed and arranged accordingly; the amount of time to perform work at one center is roughly the same as other work centers
2. work centers produced a limited range of similar products
3. material flows via mechanical transfer (little WIP)
4. capacity is fixed by the line

Intermittent manufacturing has many variations in product design, process requirements and order quantities. Major characteristics

1. Flow of work is varied and depends on design. They will take more or less time at each work station (not balanced)
2. machinery and workers are flexible
3. throughput times are long, WIP is large
4. capacity required depends on the mix of products being built and is difficult to predict

• Production Activity Control (PAC) must have four Planning Files to route materials through manufacturing –– item master file, product structure file, routing fie and work center master file

• Item Master File – there is one record for each part number. Includes header information such as description, lead time, quantity on hand & available

• Bill of Material File listing the single level quantities to assemble a parent

• Routing file consists of a series of operations needed to make the item

• Work center master file contains all relevant data on a work center including capacity, number of machine and labor hours, efficiency, utilization, etc…

• Every active manufacturing order (in process) has a record in the shop order master file. The shop order detail file contains a record of each operation needed to make an item

• Objective of scheduling is to meet delivery dates and make the best use of manufacturing resources

Manufacturing lead time consists of 1) queue time 2) setup time 3) run time 4) wait time 5) move time (transit between work centers). Typically in intermittent manufacturing queue time consists of 85-95% of total lead time

Cycle Time / Throughput Time – length of time from when material enters a production facility until it exits

Forward scheduling assumes that material procurement and operation scheduling start when the order is received, and that the operations are scheduled forward from this date. This results in an early completion and the earliest delivery date for a product

Backward scheduling is scheduling the last operation first and working back to the latest start date. WIP is reduced and there is little slack may impact customer service

Infinite loading assumes that the workstations have capacity available when required. It does not consider the impact of other orders in the system

Finite loading takes into account the other orders
Operation overlapping – the next operation is allowed to begin before the entire lot is completed on the previous operation. This reduces total manufacturing time; need to decide sub-lot size

Operation splitting also reduces lead time – cut order in ½ and run on two machines at the same time; additional setup time is incurred but run time is cut in half

Load leveling shifts load to different time periods when there is a shortage of capacity

• Overloaded work stations are called bottlenecks when required capacity is greater than the available capacity, or “a facility, function, department or resource whose capacity is equal to or less than the demand placed upon it”

Throughput is the total volume of production going through a facility. Bottlenecks control the throughput of all products processed by them. Work should be scheduled at the bottleneck at the maximum rate it can process work (its capacity)

Bottleneck principles include the following:

1. utilization of a non-bottleneck resource is not determined by its potential (or capacity), but by another constraint in the system
2. using a non-bottleneck resource 100% of the time does not produce 100% utilization
3. capacity of the system depends on the capacity of the bottleneck
4. time saved at a non-bottleneck saves the system nothing
5. capacity and priority must be considered together
6. loads can, and should, be split
7. focus should be on balancing flow through the shop

Bottleneck principles include the following:

8. establish a time buffer before each bottleneck (an inventory queue)
9. control the rate of material feeding the bottleneck
10. do everything to provide the needed bottleneck capacity (better utilization, few setups)
11. adjust loads (use alternate work centers, subcontracting, even if more expensive)
12. change the schedule (last resort)

Theory of constraints is a five step process 1) identify the constraint (limits throughput not inventory or production) 2) exploit the constraint (consider rotating shifts so that the constraint is never allowed to be idle 3) subordinate everything to the constraint (don’t focus on anything else) 4) elevate the constraint (find ways to increase the available hours of the constraint) 5) once the constraint is not a bottleneck, find the new one and repeat these steps

• Scheduling system for the constraints is called Drum-Buffer-Rope

• Drum is the “drumbeat” or pace of production

• Buffer is important because the constraint should never be starved for inventory

• Rope – pull in material into the constraint at the right time

• To control queue and meet delivery commitments, production activity control must 1) control the work going in an coming out of a work center (called input / output control) 2) set the correct priority of orders to run at each work center. Generally, if queue can be controlled, delivery can be met

An Input / Output control system is a method of managing queues and work-in-process lead times by monitoring and controlling the input to, and output from, a facility. This information is shown on an input / output report

Operation Sequencing is a technique for short-term planning of actual jobs to be run in each work center based on capacity and priorities. Control of priorities is exercised through dispatching

Dispatching is the function of selecting and sequencing available jobs to be run at individual work centers. It contains the work center, standard hours, part number and details, priority information, and jobs coming to the work center

• Dispatching rules include 1) first come, first served 2) earliest job due date 3) earliest operation due date 4) shortest processing time

Critical ratio = (due date – present date) / lead time remaining. CR < 1 (order behind schedule) CR = 1 (on schedule) CR > 1 (order ahead of schedule) CR zero or less (order is already late)

Production reporting provides feedback on what is happening at the plant. Types of information needed include 1) order status 2) weekly input / output by work center 3) exception reports 4) inventory status 5) performance summaries