manufacturing planning and control systems

MANUFACTURING PLANNING AND CONTROL

SYSTEMSCh.4 Capacity Planning

Prepared by:

Eng.Haitham Shehata HusseinEng.Ahmed Safwat

Under Supervision :

DR.Mohamed Emad Sdeek

Index

1. Capacity Planning Using Overall Factors (CPOF).

2. Capacity Bills.

3. Resource Profiles.

4. Capacity Requirements Planning (CRP).

5. Input/Output Control

6. The Capacity "Bath Tub“

Capacity Planning

CAPACITY PLANNING'S ROLE IN MPC SYSTEMS.

CAPACITY PLANNING AND CONTROL TECHNIQUES.

MANAGEMENT AND CAPACITY PLANNING.

DATA BASE REQUIREMENTS.

EXAMPLES OF APPLICATIONS.

1. Hierarchy of Capacity Planning Decisions.

2. Links to Other MPC System Modules.

1. Capacity Planning in the MPC System

2. Choosing the Measure of Capacity

3. Choice of a Specific Technique4. Using the Capacity Plan

•Data Base Design Considerations

1. Capacity Planning at Montell USA, Inc.

2. Capacity Planning at Twin Disc3. Capacity Planning at Applicon

1. Definition

CAPACITY PLANNING.

Capacity Planning

Capacity is defined as the ability to achieve, store

or produce.

For an organization, capacity would be the ability

of a given system to produce output within the

specific time period.

In operations, management capacity is referred

as an amount of the input resources available to

produce relative output over period of time.

In general, terms capacity is referred as maximum

production capacity, which can be attained within a

normal working schedule.

Capacity Planning

Capacity planning is essential to be

determining optimum utilization of resource

and plays an important role in decision-making

process.

CAPACITY PLANNING'S ROLE IN MPC SYSTEMS

Hierarchy of Capacity Planning DecisionsFinite capacity scheduling uses basically the same data as capacity

requirements planning but adjusts the schedule to ensure that the capacity required never exceeds a work center’s defined capacity limits in a given time period.

Hierarchy of Capacity Planning Decisions

The previous figure depicts the hierarchy of capacity planning decisions that can be made within a planning and control environment.

1)Planning resource capacities over long time horizons.

2)The rough-cut evaluation of capacity required by the

master production schedule.

3)Detailed capacity requirements of a particular

production schedule.

4)The use of finite loading procedures.

5)Monitoring actual outputs versus plan.

Links to Other MPC System Modules

The source of the loading data changes as you move

down this hierarchy:

Resource planning takes its capacity requirements from

the business plan.(Production Planning)

rough-cut capacity planning uses the master production

schedule as the source of its information.

Capacity requirements planning and the remainder of

these shorter-term planning modules take their loading

data from the Material Requirements Planning output.

Finite loading related to firms using details material

plans, but it can be better viewed as a shop scheduling

technique.

Input/output analysis linked to the shop-floor system and

data base for shop-floor control.

CAPACITY PLANNING AND CONTROL TECHNIQUES.

Capacity Planning and Control Techniques.

What capacity is needed to meet the production plan ?

For the aggregate plan, we reviewed different methods (resource planning) which all aim to find the required capacity in facilities, equipment and manpower.

From the aggregate planning, a MPS was built. And from the MPS, an MRP was derived. We have not yet considered the capacity aspects of these plans.

For the MPS, the Rough-cut capacity plans will provide estimates of the load of the different workcenters over the corresponding time horizon.

For the MRP, the capacity requirement plan will provide such an estimate.

We will review 4 techniques successively:

1) Capacity Planning using Overall Factors (CPOF).

2) Capacity bills.

3) Resource profiles.

4) Capacity Requirement Planning (CRP).

These techniques are more and more accurate but require more and more

information.

1.Capacity Planning using Overall Factors (CPOF). EX. Let us assume, we have only two end

products H and h with the following demand.

Total

Time period : 1 dayConsider 3 workcenters (or shops)CPOF method need the average relative workload

1.Capacity Planning using Overall Factors (CPOF). Modular Description

Here is specified the complete list of all the components.

Product components

Cup assembly Tray assembly

1.Capacity Planning using Overall Factors (CPOF). CPOF need Total amount of resource for

producing one unit of each end products.

Assume the unit to be the working hour.

1 H requires 0.15 hour = 9 min.1 h requires 0.1 hour = 6 min.Workcenter load = [(H total capacity/product)x(H product/period) + (h total capacity/product )x (h product/period)] x relative load Eq.1

1.Capacity Planning using Overall Factors (CPOF).At period time 5

Cup assembly = [9*100+6*150]*0.55 = 990 min = 990/60 = 16.5

hours

Tray label = [9*100 +6*150]*0.10 = 180 min = 180/60 = 3 hours

Tray assembly = [9*100+6*150]*.35= 630 min = 630/60 = 10.5 hours

Total capacity = 16.5 + 3 + 10.5 =30 hours The same calc with period 6,7,8

The method implicitly assume that for every production hour, 55 % are spent at the Cup Assembly, 35 % at the Tray Assembly and 10 % at the Tray Label.

Total

55%

10%35%

Hours

2.Capacity Bills.

Compared to CPOF, capacity bills take into account the detailed need of the different products at the different workcenters.

These needs can be specified as follows.

For each workcenter, the setup time is distributed on each unit of the lot size. The capacity bills can then be computed.

2.Capacity Bills.

Note that the production of 1 H TRAY requires 4 cups. The total is of course identical to what we already knew: the production of one H requires 0.15 hour.

Notes:When H is in production, the cup assembly requires 60% of the total work.When h is in production, the cup assembly requires only 50% of the total work. The CPOF method assumes a 55% average. This average is only correct when the same amount of H and h are manufactured. This means that the CPOF method is correct as long as the product mix remains the same.

2.Capacity Bills.

Capacity requirements Using Capacity BillsWorkcenter load = [H capacity bill/product )x (H

products/period) + (h capacity bill/product )x (h products/period)] Eq.2At period time 5 Cup assembly = [0.09*100+0.05*150] = 16.5 hours

Tray label = [0.02*100 +0*150] = 2 hours

Tray assembly = [0.04*100+0.1*150]= 11.5 hours

Hours

3.Resource Profiles

The idea here is to take the timing of the different workcenters into account.

Example. The production of 100 H units in

period 5 will lead to a workload of the

workshops. However, this load will not be

in period 5 but earlier, maybe in period 4 or

3 depending on the lead times.

3.Resource Profiles

Explode the demand for 1 end product in period iAssume: lead time for each operation =

1day

Except: lead time for assembly of the G

cups = 2 days.

3.Resource Profiles

Explode the demand for end products in period 7

3.Resource Profiles

This last calculation can be repeated for all the demands.

Hours

4.Capacity Requirements planning

Time bucket / Period / HorizonThe time bucket is the unit of time in use. One week is typical. The horizon is how much in the future one is looking, how many time buckets or periods we consider. By definition, we are at the beginning of period 1.Gross RequirementThis is the firm or forecast demand for the corresponding period. It is time-phased.Scheduled ReceiptsThese are parts which we are guaranteed to receive at the beginning of the corresponding period.On-hand (Projected available balance)This is the inventory at the end of the corresponding period. It should remain positive.Planned Order ReleaseHere are the orders which are planned to be launched to prevent the inventory from becoming negative. These orders are not yet placed. They are planned to be placed !

4.Capacity Requirements planningLead timeThis is the time required for an order to be completed. It is the time between the moment an order is placed and the the moment the products are delivered. It is made of 4 main parts.

Move - Queue - Setup - RunNote that queuing time depends on the workload and on the schedule !Safety timeThis is a time which is added to the lead time for safety reasons, typically when the lead time is not very reliable.Lot sizeThis is the technique used for deciding how much to order. The "lot for lot" technique means that we order exactly what is needed. Other methods are reviewed at the end of the chapter.Safety stockBy principle, an order is launched to prevent the inventory from becoming negative. With a safety stock, an order is launched as soon as the inventory would drop below this safety stock level. This security is often needed when scrap is common.

4.Capacity Requirements planningThe Kuczma Company makes sign mounts

for commercial customers. One

product is the H mount which is made up of a

painted surface on both sides of a wooden H

frame. The H mount is put together in final

assembly. The surfaces are painted in the

paint shop, and frame is made in the frame

shop. Kuczma wants to estimate the H mount

capacity needs for next five periods in final

assembly, the paint shop, and the frame shop.

Setup

Operation Work Center Time Run time

Mount assembly Final Assembly 2 hours 1.0 hours

Fabricate H frame Frame Shop 3 hours 0.5 hours

Paint surfaces Paint Shop 4 hours 0.4 hours


1 2 3 4 5 615 20 20 20 20 015

Projected available balance 10 10 20 0 10 20 2030 0 30 30 0 0

1 2 3 4 5 630 40 40 40 40 050

Projected available balance 25 45 5 15 25 35 350 50 50 50 0 0

1 2 3 4 5 620 20 20 20 20 20

Projected available balance 25 5 0 0 0 0 015 20 20 20 20

Item: H framePeriod

Gross requirementsScheduled Receipts


Planned order releaseQ = 50, LT = 1, SS = 5

Planned order releaseQ = 30, LT = 1, SS = 0

Item: Painted SurfacePeriod

Planned order releaseQ = L4L, LT = 1, SS = 0

Item: H mountPeriod


LT: Lead Time LS: Lot Size SS: Safety Stock


H Mount Assy S/U Time* Run Time/unit*

PAB15 20 20 20 20 2 1

H Frame15

PAB30 0 30 30 0 0 3 0.5

Painted Surface50

PAB0 50 50 50 0 0 4 0.4

GRSR

PORGRSR

PORGRSR

POR


Capacity RequirementsPeriod

Dept 1 2 3 4 5 6H Mount Assy 17 22 22 22 22 0H Frame 28.5 0 18 18 0 0Painted Surface 24 24 24 24 0 0

Note: 28.5 = 3 + 0.5(15) + 3 + 0.5(30)

Requires: Planned order and schedule receipt information from the MRP system, and setup and run times from the product routing file.

5.Input / output control.

Input-output Control is a technique that allows operation to manage

facility work flow.

It is used to control the size of the queues in front of work centers,

thereby helping to control manufacturing lead times. Refer to as "push

system" of linking work centers. When a batch of items is completed at

one work centre, it is pushed to the next work centre, where it waits in

a queue until it is selected to be worked at that work centre.

Input-output Control is important because it is a form of queue control,

and a great

portion of the time that a job spends in a plant is spent waiting in

queues. In many job shops and batch manufacturing factories 80 to

95 percent of the total time is queue time.

5.Input / output control.

Advantages of using Input-output Control

Customer service may improve due to the items or products

are produced on time.

Efficiency may be improved because of the less work-in-

process in cluttering the work centre and adding to overhead

costs.

Quality may be improved because less work-in-process hides

fewer problems.

MANAGEMENT AND CAPACITY PLANNING

1.Capacity Planning In MPC System From Hierarchy of Capacity Planning figure

there are relationship between MPC framework and various capacity planning modules (five modules range [long range –day to day] ):

o Vertical relationship among the capacity

planning modules

o Horizontal relationship with the material

planning modules of the MPC system .

1.Capacity Planning In MPC System

These relationships can affect managerial choices for capacity planning systems design and use in a specific firm.


To illustrate the importance of cps, let consider the

impact of production planning and resource planning

decisions on short-term capacity planning decisions.

To extent the production planning and resource

planning are done well, problems faced in capacity

planning can be reduced, since appropriate resources

have been provided.


For example: the production plan specifies a

very stable rate of output, then changes in

MPS requiring capacity changes are minimal .

If the material planning modules functions

effectively, the MPS will be converted into

detailed component production plans with

relatively few unexpected execution problems.

2.Choosing the Measure of Capacity

In this section, we can learn a method of measuring a capacity of system. Consider anything for which you need to measure the capacity, as a system.

Analyze the system into input, processing and output. When you analyze, see to that, where there is a less variability, choose that side and identify the product, process-resources, the input resources and attach time frame to provide the capacity measure.


Measure of Capacity through output Consider an automobile mass production

industry. You can’t find much variation in the output side compared to the input resources and processing parts. So the number of cars/time is considered as the measure. Mostly in the case of mass production industry the output side is considered to measure the capacity.


Measure of the capacity through Input Consider an educational institution; here

the output side is not taken into consideration because the number of outgoing students per time may vary depending upon the pass result. But the intake is always constant because the intake depends upon the government approved. So, the capacity of educational institution is measured through the input namely the number of students intake.


Measure of the capacity through processing Consider a sugarcane industry, the capacity of

that industry is not measured in terms of the output and input. There is a variability in terms of yield rate that means some times “y” tons of sugarcane may give “x” tons of sugar or some times same “y” may give more than or less than the “x” tons of sugar. Since variability is existing in both the input side and output side. Inputs and outputs are not considered for measuring the capacity. But in the processing side there is a less variability namely the crushing capacity or the number of tons of sugarcane could be crushed by the crushing machine is considered to be a best measure to measure the capacity of the sugarcane industry from the processing point of view.


System Components of System considered for capacity measure

Unit of Measure

Automobile Industry Bottling Plant University Auto repair shop Restaurant

Output

Output

Input

Processing

Processing

Number of Automobiles Gallons / Day Number of students intake per year Number of machines hour per day Seating Capacity

The table provides some of the systems and their corresponding measure to measure the capacity.


In summary, if you want to fix the measure

for the capacity, then see the system as

input, processing and output. Find where

there is a less variability choose that side

and correspondingly choose the product or

the resources to estimate the measure.

3. Choice of a Specific Technique.

CP Techniques for converting a material plan

into capacity requirements include three

different methods for rough-cut CP (CPOF,

Capacity Bills, and Resource Profiles) and

CRP. The choice of method depends heavily

on characteristics of the manufacturing

process.

3. Choice of a Specific Technique.

The three rough-cut methods are

most general, being applicable even in

companies using JIT methods for shop-

floor control.

Rough-cut can be useful in JIT

operations to estimate the impact of

changes in requirement called for by

revisions to the MPS.

3. Choice of a Specific Technique.CP Techniques Pros Cons

Capacity Bills 1. Easy to use2. Minimal

computational requirements

3. Consider product mix

1. Doesn’t consider lead times, inventory information, or gross-to-netting

2. Less accurate

Resource Profiles 1. Easy to use2. Minimal

computational requirements

3. Consider product mix

4. Considers lead times

1. Doesn’t consider inventory information or gross-to- netting

2. Less accurate

Capacity Requirements Planning

1. Considers: gross-to-netting, Inventory information, lead times

2. More accurate3. Consider product

mix

1. Requires MRP system, Time-phased records, Extensive computational requirements

4.Using the CP.

Capacity planning has seen an increased emphasis due to the financial benefits of the efficient use of capacity plans within MRP systems and other information systems.

Insufficient capacity can quickly lead to deteriorating delivery performance, unnecessarily increase work-in-process, and frustrate sales personnel and those in manufacturing. However, excess capacity can be costly and unnecessary.

The inability to properly manage capacity can be a barrier to the achievement of maximum firm performance. In addition, capacity is an important factor in the organization's choice of technology.

DATA BASE REQUIREMENTS.

Data Base Design Considerations

To be continue

manufacturing planning and control systems

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