Академический Документы
Профессиональный Документы
Культура Документы
Design and availability takes much importance during the introduction stage in
the PLC.
Delivery and price takes more importance during the Maturity phase.
Chapter: 2
Priority relates to what products are needed, how many and when they are
needed.
Chapter: 3
Master production scheduling forms a basis for calculating capacity and
resources required.
o Production plan
o Forecast for an individual end item
o Actual orders received for customers and for stock replenishments
o Inventory levels for individual end items
o Capacity restraints
For MPS minimum planning horizon is the longest cumulative lead time.
For periods after demand time fence, forecast influence the PAB so it is
calculated based on greater of forecast and customer orders.
o PAB = prior period PAB + MPS greater of customer orders or
forecast
Time fences:
o Frozen zone: Capacity and materials are committed to specific orders.
o Slushy zone: Capacity and materials are committed to less extent.
The extent of slushy zone is called as planning time fence. Within
time fence system will not reschedule MPS orders.
o Liquid zone: Any change can be made to the MPS as long as it is within
the limits set by production plan. Changes to MPS will occur.
Chapter: 4
Demand is of two types: Independent & Dependent
MPS can only be of independent demand items.
Dependency can be horizontal or vertical.
Material requirement planning is an input to production activity control.
MRP plans the release and receipt of the orders.
Input to material requirement planning is :
o Master production schedule
o Bill of material
o Inventory records
MPS is a statement of which end items are going to be produced, the quantities
of each and the dates they are to be completed.
Bills of material structures:
o Product tree: Tree structure
o Parent-component relationship:
o Multilevel bill: Having multiple levels, most parent level is 0 and it goes
as 1, 2, 3 Bill of material is not completed till all branches of the
product structure tree end in a purchased part.
o Multiple bill: Having different BOM for the slight change in the
components used for making two different types of part having same
kind.
o Single level bill: Having only single level showing parent and immediate
sub-assembly, reducing the need for different individual BOM creation
for the variants.
o Indented bill: Having parent on the left and the sub parts are indented to
right having req. of qty for each sub part.
o Summarized part list: Having all the required parts summarized in one
bill regardless of the way product will be made or assembled.
o Planning bill: they are the artificial grouping of components for planning
purpose. If we have 27 diff. variant of tables. We will shows percentage
req. of each component based on forecast and history on single bill.
o Releasing orders:
Planned order releases are only planned and not actually
released.
Order of material should not be released until planned order
release date arrives.
The meaning of releasing an order is to give authorization to
purchase or manufacture to make the compound.
When the planned order is actually released then planned
order receipt is canceled and a scheduled receipt is created in
its place.
o Open orders :
Scheduled receipt on the MRP record are open orders on the
factory and are the responsibility of purchasing and of production
activity control. When goods are received into inventory and
available for use, the order is closed out, and the scheduled receipt
disappears to become part of the on hand inventory.
Chapter: 5
Capacity required: It is the capacity of the system or resource needed to
produce a desired output in a given time period.
Load: It is the amount of released and planned work assigned to a facility for a
particular time period.
Capacity available is the rate at which work can be withdrawn from the system
and load is the amount of work in the system.
Capacity planning is the process of determining the resources required to meet
the priority plan and the methods needed to make that capacity available.
Planning levels:
o Resource planning: Long range capacity resource requirements and
directly linked to production. If resource plan cannot be devised to meet
the production plan, the production plan has to be changed.
o Rough-cut capacity planning: MPS is the key source behind this
planning analysis. The purpose is to check the feasibility of MPS, provide
warning of any bottlenecks, ensure utilization of work centers and advise
vendors of capacity requirements.
o Capacity requirement planning: It is directly linked to material
requirement planning. It is concerned with individual work centers and
calculates work center loads and labor requirements for each time period
at each work center.
Work center file: It contains information on capacity and move, wait, queue
time associated with the center.
Move time: It is the time normally taken to move material from one workstation
to another.
Wait time: It is the time a job is at a work center after completion and before
being moved.
Queue time: It is the time a job waits at a work center before being handled.
Lead time: It is the sum of queue, setup, run, wait and move times.
Back scheduling: It is the process to start with due date and using the lead
times to work back to find the start date for each operation. This process is
called back scheduling.
Work center file has all information from queue, run, setup, move, wait time to
work center capacity.
Chapter: 6
Dispatching: Releasing orders to shop floor as authorized by the material
requirement plan.
Manufacturing systems:
o Flow manufacturing:
This is concerned with the production of high-volume standard
products.
If the units are discrete it is called repetitive
manufacturing and if goods are made in continuous flow
then it is called as continuous manufacturing.
Routings are fixed. Work centers are arranged according to
that.
Variety is really less and special tooling are used for making
the product.
Less changeover and inventory buildup.
Throughput times are low.
Capacity is fixed by the line.
o Intermittent manufacturing:
Process flow.
Many variations in product design, process requirements and
order quantities.
Flow of work through the shop is varied and depends on design of
particular product.
Machines are grouped together according to the function they
perform.
Throughput times are generally long. There will be inventory
buildup
Machine changeovers are more.
Capacity required depends on the particular mix of products being
built and is difficult to predict.
o Project manufacturing:
Data requirements:
o Planning files:
Item master file
BOM
Routing file
Work center master file
o Control files:
Shop order master file
Shop order detail file
Setup time and run time comes under the control of industrial engineering
department.
Queue, wait and move time comes under the control of manufacturing and
production activity control department.
Scheduling techniques:
o Forward scheduling:
Material procurement and operation scheduling for a component
starts once order is received. The operations scheduled forward
from this date. This results in completion before due date and
accounts for inventory buildup.
This is useful to decide the earliest delivery date for the
product.
This kind of scheduling is helpful to calculate how long it will take
to complete a task.
This is useful in developing the promise dates for the customers or
figuring out whether an order behind schedule can be caught up.
o Backward scheduling:
The last operation in the routing is scheduled first and it is
scheduled for completion at the due date.
This logic is used in MRP planning system.
WIP is reduced but because there is a little slack time in system,
customer service may suffer.
This scheduling is normally used in production as it reduces
inventory
Infinite loading:
o Analysis can have over and under loading situation.
Finite loading:
o No overloading situation.
Operation overlapping:
o In operation overlapping, next operation is allowed to begin before the
entire lot is completed on the previous operation.
o It reduces the total manufacturing lead times because the second
operation starts before the first operation finishes all the parts in the
order.
o Move costs are higher if the operations done on different machines are
not close enough.
o It may increase the queue at second operation if the operation on
first lot at second operation is not completed before lot arrival.
o It potentially reduce the capacity if the second operation is idle
waiting for the parts from first operation.
o If run time on second operation is long the first lot should be of
small size and if run time on second operation on short then first
lot should be large enough to reduce the risk of idle time increase.
Operation splitting:
o The order is split into two or more lots and run on two or more machines
simultaneously.
o It is justified when setup time is less than run time.
o A suitable work center is idle.
Bottleneck:
o Overloaded workstations are called as bottlenecks.
Throughput:
o It is the total volume of production passing through a facility. Bottleneck
controls throughput of all products processed by them.
o If work center feeders feed bottleneck more than it can produce then
excess inventory will be built up.
o Work should be scheduled at the rate bottleneck can process the work.
o Work centers fed by bottlenecks have their throughput controlled by
them and the schedules should be determined by that of the bottlenecks.
Managing bottlenecks:
o Establish time buffer before each bottleneck: It is an inventory place
before each bottleneck because bottleneck must not be starved.
o Controlling the rate of material feeding the bottleneck: Bottleneck must
be fed at the rate equal to the capacity so the time buffer remains
constant. The first operation in the sequence of operations is called
a gateway operation.
Critical ratio: Index of the relative priority of an order to other orders at the
work center.
o CR = (due date present time)/lead time remaining = Actual time
remaining/lead time remaining.
o If CR <1, behind schedule.
o If CR = 1, on track.
o If CR >1, ahead of schedule.
o If CR =0 or less, already late.
Chapter: 7
Functional specifications: They are concerned with the end use of the item and
what item is expected to do.
Value analysis: The systematic use of techniques that identifies a required
functions, establish a value for that function and finally provide that function at
the lowest overall cost.
Selecting supplier:
o Sourcing:
Sole sourcing implies that only one supplier is available because
of patents, technical specifications, raw material, location
Multiple sourcing is use of more than one supplier for an item.
The potential advantages of multiple sourcing are that competition
will result in lower price and better service and that will be a
continuity of supply.
Single sourcing is a planner decision by the organization to select
one supplier for an item when several sources are available. It is
intended to produce long term partnerships.
Price determination:
o Fair price: It is competitive, gives the seller a profit, and allows the buyer
ultimately to sell as a profit.
o Prices have upper and lower limit. Market decides the upper limit and
seller decides the lower limit.
o Fixed cost: Costs incurred no matter the volume of sales.
o Variable cost: Directly associated with the amount produced or sold.
Total cost = Fixed cost + (variable cost per unit)(Number of units)
Buyers can lower the unit price paid by increasing the volume per order
using ling-term contracts or through the standardization of parts.
Sales volume less than break-even point shows loss and more than that
shows profit.
(Price per unit) (units sold) = fixed cost + (variable cost per unit) (number
of units)
Competitive bidding:
o Price negotiations:
Commodities: Price is set by the market supply and demand and
can fluctuate widely. Negotiation is concerned with contracts for
future prices.
Standard products: Items are standard and the choice of suppliers
large, prices are determined on the basis of catalog prices. Not
much room for negotiations.
Items of small value: Price negotiations of little purpose. Prime
objective is to keep the cost of ordering low.
Made to order items: Generally can be negotiated.
Internet/Intranet/Extranet
CRM includes several activities with the intent to build and maintain a
strong customer base. Customer wants and needs are assessed and cross
functional team from the company work to align company activities
around those customer needs.
Stable: the demand patterns for those which retain the same general shape are
stable.
Dynamic: opposite of above statement.
Average demand is the same for both stable and dynamic and it is usually
the average demand that is forecast.
Dependent demand items are not generally forecasted as they can be calculated
from the independent demand item.
Principles of forecast:
o Forecasts are usually wrong.
o Every forecast should include an estimate of error.
o Forecasts are more accurate for families or group.
o Forecasts are more accurate for nearer time period.
Anything that can be done in order to reduce lead time will improve
forecast accuracy.
Forecasting techniques:
o Qualitative techniques: Historical analogy, Test-market, Delphi method
o Extrinsic techniques: These are projections based on external indicators
which relate to demand for a companys products.
This method is mostly useful for forecasting the total demand
for a firms products rather than individual end items.
o Intrinsic techniques: Uses historical data to forecast.
Always forecast average demand.
o Moving average always lags in trend, the longer it will be, and causes the
greater lag.
Exponential smoothing:
Seasonality:
Average demand for all periods is the value that averages out seasonality
that is called as deseasonalized demand.
Normal distribution:
o Two important characteristics:
Central tendency and dispersion.
Tracking signal:
o Bias exists when cumulative actual demand varies from forecast.
o If variation is due to random variation, the error will correct itself and
nothing should be done to adjust forecast.
o If error is due to bias, forecast needs to be corrected.
o In normal circumstances actual demand will be within +/-3 MAD.
I = (t * A)/365
Inventory costs are calculated based on the average inventory during period.
Balance sheet:
Which means that with $500000 of Inventory Company is able to generate $1000000
in sales. So through better material management we can reduce the $0.5M cost.
Lot-for-Lot: This rule says to order exactly what is needed - no more - no less.
The order quantity changes whenever requirement changes.
Fixed order quantity: this rules specifies the number of units to be ordered
each time an order is placed for an individual item. Disadvantage of this method
is it does not minimize the costs involved.
Min-Max system: A variation on the fixed order quantity is this system. In this
system, an order is placed when the quantity available falls below the order
point. The quantity ordered is the difference between the actual quantity
available at the time of order and the maximum.
= (A/Q) * S
Annual carrying cost = average inventory * cost of carrying 1 units for 1 year
= (Q/2) * c * I
For any situation in which annual demand, cost of ordering and cost of carrying
inventory are given, the total cost will depend upon the order quantity (Q).
Q = sqrt(2*A*S/ic)
Quantity discounts:
o Savings in purchase cost.
o Ordering costs are reduced because fewer orders are placed since larger
quantities are being ordered.
o Inventory carrying costs are higher because of larger quantities.
Order quantities for families of product when costs are not known:
o For families of product, ordering costs and carrying costs are generally
same for each item.
o Now,
Q = sqrt(2* Ad * S/i)
o Now S and i are similar for all items. So ratio 2S/I must be same
for all items in the family,
o K = sqrt(2S/i)
o Q=K * sqrt(Ad)
Q = Ad/N
K* sqrt(Ad) = Ad/N
K = sqrt(Ad)/N
Chapter: 11
Order point system: when quantity on had in inventory falls to a
predetermined level, it is called as order point.
o OP = Demand during lead time + SS
o OP = (Average demand for a period) +SS
Normal curve:
o +/- 1 sigma, shows that 68.2% of points are within this area about the
nominal value.
o +/- 2 sigma, 95.4%
o +/- 3 sigma, 99.6%
Standard deviation:
o It shows how close the actual value is from the nominal value.
o Calculate the deviation for each period by subtracting the actual demand
from the forecast demand.
o Square each deviation.
o Add the squares of the deviation.
o Divide the value by number of periods to determine the average of the
squared deviations.
o Calculate the squared rood of the value.
The deviations in demand are for same time intervals as the lead time. If
the lead time is one week, then the variation in demand over a one-week
period is needed to determine the safety stock.
Different forecasts and lead time intervals:
o Sigma(LTI)/Sigma(FI) = SQRT(LTI/FI)
o New safety stock/Old safety stock = SQRT(New interval/old interval)
Distribution inventory:
o Decentralized system:
Each distribution center first determines what it needs and when,
and then places orders in central supply.
Each center orders on its own without regard for the needs of the
others, available inventory at central supply or the production
schedule of the factory.
The advantage of decentralized system is each unit operates on
their own and thus reduce communication and co-ordination
expense.
Disadvantage is the lack of coordination and effect this may have
on inventories, customer service and factory schedules.
Decentralized system is sometimes called as Pull system. As
orders are placed on central supply and pulled through system.
o Centralized system:
All forecasting and order decisions are made centrally.
Stock is Pushed out into system from central supply.
Distribution centers have no say about what they receive.
Disadvantage is poor local service level.
Chapter: 12
Marshal the shipment: Goods making up a single order are brought together
and checked for omissions or error. Order records are updated.
Dispatch the shipment: Orders are packaged, shipping documents are
prepared and goods are loaded on the right vehicle.
Cube utilization and accessibility:
o Warehouse capacity depends on how high goods can be stored.
o A palate standard dimensions are 48 inch deep * 40 inch side and 4 inch
thick.
o If we are placing two pallets side by side we need to keep 2 inch
allowance between them so they can be moved.
o Pallets can be stacked, usually the number of stacked pallets are three.
o Cube utilization is the use of space horizontally and vertically.
o One way to increase cube utilization is to install tiers of racks so lower
pallets can be removed without disturbing the upper ones.
Working stock: Stock from which withdrawals are made. Can be located near to
marshalling and shipping area,
Reserve stock: Used to replenish the working stock can be located more
remotely.
This allows order picking to occur in a compact area and replenishment of the
working stock in bulk by pallet or container load.
Floating location: Here goods are stored wherever there is appropriate space
for them.
o Improved cube utilization.
o Warehouse efficiency is greatly improved.
Inventory audit:
o Periodic (usually annually) counts of all items
o Cyclic( usually daily) counts of specific items
o It is important to audit record accuracy but more important to audit the
system to find the causes of record inaccuracy and eliminate them.
Cyclic counting does this, but periodic audits tend not to.
o Zone method: Items are grouped by zones to make counting more
efficient. The system is used when fixed location system is used, or
when work in process or transit inventory is counted.
o Location audit system: In floating location system, goods can be stored
anywhere. In location audit system, a predetermined number of stock
locations are checked each period.