Introduction to Materials Management

1. Introduction to Materials Management Chapter 5 – Capacity Management

2. Basic Capacity Definitions • Capacity Required – capacity needed to produce a desired output in a given time period • Capacity Planning – determining the resources and methods needed to meet the priority plan • Capacity Control – monitoring production, comparing with the capacity plan, and taking appropriate corrective actions • Capacity Management – determining capacity needed as well as providing, monitoring, and controlling the capacity

3. Capacity versus Load

4. Capacity Planning Levels • Resource Planning – Long range resource requirements linked to the production plan • Rough-cut Capacity Planning – Used to check feasibility of MPS • Capacity Requirements Planning – Detailed work center capacity plans linked to MRP

5. Capacity Planning Levels

6. Capacity Requirements PlanningInputs • Open Order File – found as scheduled receipts on MRP • Planned order releases from MRP – Potential future orders • Work Center file • Information on capacity in the work center • Move, wait, and queue time information

7. Capacity Requirements PlanningInputs - Continued • Routing file – the path that the work will follow • Operations to be performed • Operation sequence • Work centers used • Potential alternative work centers • Tooling needed • Standard setup times and run times

8. Sample Routing File Figure 5.3 Routing file

9. Capacity Available • Impacted by: • Product specification • Product mix • Methods used to make product • Pace of work

10. Finding Capacity Available • Rated Capacity = (available time) x (utilization) x (efficiency) • Available time : number of hours a work center can be used • Utilization = [(hours actually worked) / (available hours)] x 100% • Efficiency = [(actual production rate) / (hours actually worked)] x 100%

11. Capacity Load – Sum of all time required for orders on a work center - Example

12. Example Load Profile

13. Scheduling Orders • Back scheduling (the typical approach) – Start with the due date, use lead time to find the proper start date for each operation • Forward scheduling – Launch the order into the first (gateway) work center, then use the lead times to find when the order will be completed at each work center

14. Back Scheduling Example • An order for 150 of a component is due on day 135 • An order starts at the beginning of a day and finished at the end of a day • Operation times for the 150 ordered: • Operation 10 – 4 days in work center 12 • Operation 20 – 5 days in work center 14 • Operation 30 – 1 day in work center 17 • Operation 40 – 2 days in work center 03

15. Manufacturing Lead Time • Queue - time spent waiting before operation • Setup - time to prepare the work center • Run - time to make the product • Wait - time spent after the operation • Move - transit time between work centers

16. Manufacturing Lead Time Queue Setup Run Wait Need a lift truck here Move Move Queue Setup Run Wait

17. Data from the work center file

18. The resulting work schedule

19. The work schedule shown graphically

20. Making the plan

21. Managing the Plan – Adjusting Capacity • Use Overtime or Undertime • Adjust the number of workers • Shift workers from other work centers • Use alternative work centers to shift load • Subcontract work