8 -scheduling_and_executing_operations

Alex Hill and Terry Hill

Scheduling and executing operationsAlex Hill and Terry Hill

Learning objectives

• Understand NATURE of capacity and the mix of RESOURCES involved

• Appreciate the PURPOSE of managing capacity and the IMPACT of having too little or too much capacity

• Explain how to DEFINE and MEASURE capacity in different organisations

• Understand the FACTORS involved in determining the level of capacity required

• Explain the key STEPS in capacity planning

• Recognise the key FACTORS in managing capacity

Lecture outline

• INTRODUCTION

• What is operations SCHEDULING?

• Operations scheduling SYSTEMS

• Critical REFLECTIONS

• SUMMARY

Ensures bothCUSTOMER REQUIREMENTS

and PERFORMANCE TARGETSare met

OPERATIONS SCHEDULING

What is operations scheduling?


•Schedules RESOURCES to•Meet CUSTOMER

requirements

•Cushions STABLE delivery system

•From UNSTABLE markets

HOW

WHAT

> KEY IDEA

Operations scheduling helps toCUSHION the delivery system from the INSTABILITY of the market

•BASIC mechanisms- Order backlog- Inventory; or- A combination of the two•SECONDARY mechanisms- Planned capacity- Forecasting; and- Demand management•SUPPLEMENTARY

mechanisms- Reactive capacity - e.g.

overtime


CUSHIONING MECHANISMS

Operations scheduling systems

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Vary by delivery system and process type


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System typeService or product type

Simple Complex

Bar charts

Network analysis

Non-repeat delivery systems and processes

Operations scheduling systemsBar chart

> KEY IDEA

Where the demand isNON-REPEAT and the delivery system contains only a FEW ACTIVITIES, aBAR CHART or INFORMAL scheduling system is used

Operations scheduling systemsNetwork analysis


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System type

Scheduling philosophy Functional coverage

Plan-push

Demand-pull

Constraint-based

Operations

Operations related

Other

MRP I

MRP II

ERP

JIT

Lean

OPT

TOC

Repeat delivery systems and processes


•Identify DEMAND for services and products- Determine for known orders- Forecast for unknown orders•Calculate REQUIREMENT for dependent items•Deliver services and products in line with

FORECAST

PHILOSOPHY

MRPI and MRPII

Operations scheduling systemsMRPI and MRPII

> KEY IDEARequirements with anINDEPENDENT PATTERN of demand have to be forecast based on KNOWN ORDERS

> KEY IDEARequirements with a DEPENDENT PATTERN of demand can beCALCULATED

Operations scheduling systemsMRPI and MRPII

> KEY IDEA

MRPI:• Determines FUTURE DEMAND for independent items; and then• Calculates REQUIREMENTS for dependent items

> KEY IDEA

MRPII:• Ties the MRPI ACTIVITIES in• With other RELEVANT FUNCTIONS

> KEY IDEA

ERP:• Evolved out of MRPII and• Covers the WHOLE ORGANISATION

CASE 8.1

IT SYSTEM CHANGESAT DELL

1.Why did the SAP R/3 introduction FAIL?

2.Why is the later installed system WORKING?

CASE 8.1

Question

Answer

SAP R/3 failed

Later system worked

• Each system BEST-FITS its requirements• STAGGERED introduction• Easier to CUSTOMISE each system

separately

IT SYSTEM CHANGES AT DELL

• ADVANTAGES of system:- Tried, tested, cheaper and covers all

functions• DISADVANTAGES of system:- Standardised- Business has to change to meet system- Difficult to install- Unable to change with business

Operations scheduling systemsJIT

IMPLEMENTATION

PHILOSOPHY

PRE-REQUISITES


PHILOSOPHY

•REVERSE the flow of information- Each stage places requirement on previous

stage•Minimise INVENTORY•Eliminate BOTTLENECKS- Minimise process uncertainty•Reduce SET-UP times- So can deliver small batches of services and

products


•Suits REPETITIVE operations- Normally high volume and low variety•Must be introduced and developed by

END-USER- In supply chain•FIRM schedules- Allowing sufficient time to deliver to next

stage•LOCAL suppliers- More responsive to changes

PRE-REQUISITES


IMPLEMENTATION

•PHYSICAL change- Layout and balanced flow•Staff INVOLVEMENT- Broader role- Responsibility for quality and

improvement

> KEY IDEA

•Whereas MRPI is PLAN-PUSH,•JIT is a DEMAND-PULL system

CASE 8.2

JIT SYSTEM DEVELOPMENTS AT NISSAN

1.Why does it suit a JIT scheduling system?

2.What are its ADVANTAGES of this system?

3.What are its DISADVANTAGES?

Question Answer

Suits JIT

Advantages

Disadvantages

• REPETITIVE high volume• VARIETY is known and fixed• END-USER (NIssan) is driving introduction and

development• FIXED schedules• LOCAL suppliers (Sommer-Allibert)

CASE 8.2

• Increased TRANSPORTATION COSTS as multiple deliveries

• Increased ENVIRONMENTAL COSTS as multiple deliveries

• Increased RISK for Nissan as more dependent on supplier

JIT SYSTEM DEVELOPMENTS AT NISSAN

• Low INVENTORY for Nissan and Sommer-Allibert• Reduced HANDLING COSTS delivered to assembly

line• Reduced VARIABLE COSTS from stable delivery

system

•Invest in PROCESS- Rather than inventory•Improve by EXPOSING PROBLEMS - Through inventory reduction•Give direct staff responsibility for INDIRECT

ACTIVITIES- Scheduling, quality conformance and

improvement•Eliminate WASTE- Inventory, movement and non-value adding•Reduce SET-UP- Deliver small batches of services or products

Operations scheduling systemsLean

PHILOSOPHY

Operations scheduling systemsLean

1.Identify the system’s CONSTRAINTS- Physical or non-physical • Identify constraints affecting the OVERALL

OUTPUT of the organisation•Decide how to maximise THROUGHPUT with

the current constraint(s)•Don’t fully load the NON-CONSTRAINT

resources•Manage the CONSTRAINTS- Keep them BUSY- Identify ways to IMPROVE them•When constraints are relaxed return to STEP

1

Operations scheduling systemsOPT and TOC

PHILOSOPHY

> KEY IDEA

CAPACITY CONSTRAINTS govern the rate of FLOW in operations

CasinoSpy mission

Planning and control

Scheduling and executing operations

Mission

Impossible(1998)

Gung Ho

(1986)

Film clip Spy Mission (Planning)

FilmTitleDirector (year)

Mission impossibleDe Palma (1996)

ClipStartFinish

00:03:4100:07:33

What clip shows A team planning a spy mission

Key learning objective

The methods used to plan a project manufacturing process



Film clip Spy Mission (Control)


Mission impossibleDe Palma (1996)

ClipStartFinish

00:10:1700:13:01

What clip shows A team executing a spy mission


The methods used to control a project manufacturing process



Film clip Casino (Planning)


CasinoScorsese (1995)

ClipStartFinish

00:04:5700:09:33

What clip showsHow a casino processes money from the gambling tables in Las Vegas to the casino bosses in Kansas City


The methods used to plan a high volume batch manufacturing process



Film clip Casino (Control)


CasinoScorsese (1995)

ClipStartFinish

00:21:0000:23:09

What clip showsThe casino being run and managed to make sure that people aren’t cheating or stealing money


The methods used to control a high volume batch manufacturing process



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Spy mission Casino

Planning methods

Controlling methods



Process type


Question

Spy mission Casino

Planning methods

Controlling methods

• Project schedule• Bar chart• Tasks for individuals• Overall sequencing• of activities

• Batch schedule• Resource loading• - Front office tables• - Back office counting• Maintain flow of money

• Video surveillance - Remote - Between individuals• Marking target

• Video surveillance• People on shop floor• Ex-cheats in balcony



Critical reflections

• Need to INTEGRATE all systems used within a business

• Each system needs to support DIVERSE needs

- Multiple MARKETS- Multiple SERVICES and PRODUCTS- Multiple ORDER-WINNERS and QUALIFIERS

• Must select system that best SUPPORTS- BUSINESS requirements- MARKET requirements- Recognise TRADE-OFFS

Summary

• Scheduling systems CUSHION- STABLE delivery systems from- UNSTABLE markets

• Alternative cushioning METHODS- BASIC - inventory, order-backlog, capacity- SECONDARY - plan capacity, forecast, manage

demand- SUPPLEMENTARY - reactive capacity

• Choice of scheduling SYSTEM - Varies by delivery system and process type

• NON-REPEAT scheduling systems- Bar charts, network analysis

• REPEAT scheduling systems- MRPI, MRP II, ERP, JIT, Lean, OPT, TOC

Revision questions

1 Which of the following is NOT a way to cushion a stable delivery system from unstable markets:a) Inventory or excess capacity

b) Long-term changes in capacity

c) Order backlog

Revision questions

2 Which of the following is NOT a factor that influences the choice of scheduling system:

a) The complexity of the service or product

b) The choice of delivery system or process

c) The nature of competition in the market

Revision questions

3 Which of the following is NOT a system used to schedule and manage operations:

a) Statistical process control

b) Network analysis

c) Enterprise resource planning

Revision questions

4 Which of the following is NOT a pre-requisite for implementing JIT:

a) It must be end-user driven

b) Operations schedules must be flexible

c) It is most suited to repetitive, high volume and low variety operations

Revision questions

5 Waste is an activity that:

a) Customer is not willing to pay for

b) Customer is willing to pay for

c) Both a) and b)

CASE FOR TUTORIAL

ASH ELECTRICS

8 -scheduling_and_executing_operations

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