MBA II -PROD MGMT UNIT III - Capacity Planning: Designing of any system involves planning for all aspects

such as inputs, conversion process and outputs of production operation. The effective management of capacity is the most important responsibility of production management. The objective of capacity management is to of a producing unit to produce within a stated time period, normally expressed in terms of output per unit of time. S. Buffa 1. 2. 3. 4. 5. 6. Capacity affects the cost efficiency of operations. Sufficient capacity is required to satisfy customers demand on time. Sufficient capacity is required to satisfy customers demand on time. The reasons for capacity planning are; Capacity affects the scheduling system. Capacity creation requires an investment.

match the level of operations to the level of demand. Capacity planning is to be carried out keeping in mind future growth and expansion plans, market trends, sales forecasting, etc. Capacity is the rate of productive capability of a particular machine or facility. It is usually expressed as volume of output per period of time. Capacity is the limiting capability

4). A beer plant uses cases of beer / month. MEASUREMENT OF CAPACITY: (TYPES) 1. Design Capacity: Design capacity of a facility is the planned or engineered rate of output of goods or services under normal or full scale operation conditions. Eg: The designed capacity of a cement plant is 100 Tonnes per day. (TPD) 2. System Capacity: System capacity is the maximum output of the specific product or product mix the system of workers and machines is capable of producing as an integrated whole. It is less than design capacity or at the most, equal because of the limitations of product mix, quality, specifications, breakdowns, etc. The actual is even less because of many factors affecting the output. Such as actual demand, downing time etc. 3. Actual Capacity: The actual capacity is even more reduced because of various short time effects such as breakdowns, inefficiency of labour, absenteeism etc. The system efficiency can be measured as ratio of actual measured output to the system capacity: System efficiency = Actual output

This is the first requirement of an organization when it decides to increase its production or to produce something new. MEASUREMENT OF CAPACITY: It is easy to measure the capacity of the unit manufacturing homogeneous and tangible products that can be counted. This can be expressed as number of units of out per peiod of time. However, it becomes difficult and complicated to measure and express capacity when the products manufactured are multiple and some of them require common facilities and others specialized ones. In such situations the capacity is not expressed as output per period of time. It is usually expressed as man-hours, machine hours or sometimes in terms of applicable resources. Eg: 1) A job shop can measure in terms of machine hours/ man hours 2). For hospitals it is bed days per month. 3). For transport facilities it is seats kms / month.

System output 4. Licensed Capacity: Capacity license by the various regular agencies or government authorities. This is the limitation of the output limited by the government. 5. Installed Capacities: The capacity indicated/ provided at the time of installation of the plant. 6. Rated Capacity: Capacity based on the highest production rate established by actual trials.

CAPACITY PLANNING: Capacity Planning deals with the long-term and short-term capacity needs of an organization and determining how these needs will be satisfied. These decisions are taken based on the consumer demand and this is merged with the human, material and financial resources available to the organization. The process can be seen as below;

Estimating Future Capacity Needs: Capacity requirement can be evaluated from two perspectives Longterm and Short-term strategies. 1. Long term Strategy: Long-term capacity requirements are more difficult to determine because the future demand and technology are uncertain. Forecasting for 5-10 years into the future is extremely risky and difficult. Products may become obsolete. Demand for the item may not exist after some time. This strategy is determined after market planning and determination of lifecycle of the product. Major changes that affect overall changes in the level of output and capacity may have to be made. Marketing environmental assessment and implementing the long-term capacity plans in a systematic manner are the major responsibilities of management. These vary for different products; (a) Multiple products: Companies produce more than one product, using the same facilities. In order to increase the profit. This will reduce the risk of failure. Having more than one product helps the capacity planners to do a better job. Because products are in different stages of their life-cycles, it is easy to schedule them to get maximum capacity utilization. (b) Phasing-in capacity: In high-technology industries and in industries where technological development is fast, the rate of obsolescence is very fast. The products should be brought into the market quickly. The solution is to phase the capacity on modular (standardized) basis. Strategies may be made for 3-5 years and then reviewed at the end of that period. (c) Phasing-out capacity: Outdated manufacturing processes cause excessive plant closures and down time. The impact of closures is not limited to only fixed costs of plant and machinery. The phasing out here is done in a humanistic way without affecting the community. Alternate arrangements are made for the work force like giving them alternate jobs at other locations, compensating the employees, etc.

2. Short-term Strategies: Managers often use forecasts of product demand to estimate the short-term workload the facility must handle. The output requirement for around the next 12 months are estimated and arrangements made for different resources. Then comparison is made between existing capacity and likely requirements and necessary adjustments are made. For short term periods of up to one year, fundamental capacity is fixed. Major facilities are not changed. Then adjustments are made for various increase or decrease of quantity of product. Capital intensive processes depend upon physical facilities, plant and equipment. Short-term capacities can be modified by operating these facilities more or less intensively than normal. In labour intensive processes, short-term capacity can be changed by layingoff or hiring people or by giving over time to workers, The strategies for changing capacity also depends on how long the product can be stored. FACTORS INFLUENCING EFFECTIVE CAPACITY: A. Forecasts of demand: Demand forecast influences the capacity plan in a big way, though it is very difficult to predict the demand with accuracy because of various factors such as life-cycle and number of products, capacity planning is essential for the effective running of any business. 1. Plant and labour efficiency: It is difficult to attain 100% efficiency of plant and equipment. It becomes less than 100% because of the enforced idle time due to machine breakdown, rescheduling and other factors. Plant efficiency varies from equipment to equipment and organization to organization. The standard time set for a worker by Industrial Engineers is for a representative or normal worker. Actually, workers differ in their speed and efficiency. Thus, both labour utility and equipment efficiency are essential.

2. Subcontracting: Sub contracting refers to off-loading some of the jobs to outside vendors, thus hiring outside agencies to meet the requirement of the plant. 3. Multiple shift operation: Multiple shifts enhance the capacity of a firm. This is specially suitable for process industries where the investment is very high. B. Management policy: Management policy with regard to subcontracting, multiplicity of shifts, the work station to be run for third shift, machine replacement policy, etc., are going to affect the capacity planning.

4. The cost of creating additional capacity is prohibitively high.

AGGREGATE PLANNING: Aggregate planning is an intermediate-term planning decision. It is the process of planning the quantity and timing of output over the intermediate time horizon. Within this range the physical facilities are assumed to be free for the planning period. Therefore fluctuation in demand must be met by varying labour and inventory schedule. Aggregate planning seeks the best combination to minimize costs. Aggregate Planning Strategies:

FACTORS FAVOURING PRODUCTION:

OVER

CAPACITY

&

UNDER

CAPACITY

It is very difficult to forecast demand as always there is an uncertainty associated with the demand of products. The forecasted demand may be either higher or lower than actual demand. So there is always an element of risk in capacity planning. This gives rise to under capacity or over capacity production. Over capacity: Over capacity Production is preferred when; 1. Fixed cost of the capacity is not very high. 2. Subcontracting is not possible because of secrecy of design/ quality etc. 3. The time required to add to capacity is very long. 4. The company cannot afford to miss the delivery or lose the customer. 5. There is an economic capacity size, under which it is not economical to operate the equipment. Under capacity Production is preferred when; 1. The time to build capacity is short. 2. Shortage of product does not affect the company or lost sales can be compensated. 3. The technology changes fast.

The variables of the production system are labour, materials and capital. To generate higher volume of output, more labour effort is required. If there is a limitation in the number of men, the variables such as overtime, subcontracting and multiple shift operation can be resorted to. Materials also help to regulate output. The company can use such alternatives as inventories, back ordering and subcontracting of certain products. These controllable variables constitute pure strategies by which fluctuations in demand and uncertainties in production activities can be accommodated.

AGGREGATE PLANNING GUIDELINES: 1. 2. 3. 4. 5. 6. 7. 8. Determine corporate policy regarding controllable variables. Use a good forecast as a basis for planning. Plan in proper units of capacity. Maintain a stable workforce. Maintain need control over inventories. Maintain flexibility to change. Respond to demand in a controlled manner. Evaluate planning on a regular basis.

Strategies to Meet Non-Uniform Demand:

1. Absorb demand fluctuations by varying inventory level, back ordering or shifting demand.

2. Strategy Change only the production rate in accordance with the non-uniform demand. 3. Change the size of the work force to vary production: Method 1. Hire additional personnel as demand for Increases . and recruitment, additional shift, if shift added. is Cost Employment costs

advertising cost of

2. Lay off personnel as demand compensation to Decreases. -

Cost

of

workers for lay off.

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services. The quest for excellence in quality is a continuous process. This process is based on a process that is called the Deming Wheel. The wheel generates activities with measurable outputs, is a process and the perfection of the process is the ultimate goal. In a Deming Wheel, the plan defines the process, which ensures documentation and sets measurable objectives against it. The DO executes the process and collects the information required. The CHECK analyses the information in suitable format. The SCT brings about the corrective action, using TQM techniques and methods. At the end of each cycle, the process is either standardized or adjusted. This brings about improvement in the process and quality.

TOTAL QUALITY MANAGEMENT: Total quality management is based on the premise that any production or service can be improved and that every successful organization must continuously strive for improvement of quality. The essence of TQM is continuous improvement at all levels to achieve the ultimate goal of customer satisfaction. Total means comprehensive ways of dealing with all sorts of problems in any production situation. Quality means meeting customers requirements, formal and informal at the lowest cost, first time and every time. This means that everyone should be involved in quality at all levels and across all functions, ensuring quality at every step. The management responsibility refers to the need for everyone to be responsible for their own jobs, which refers to managers as well as workers. The essence of TQM is value addition. A business unit draws on its resources and adds value in order to create an output or product that brings forth the customers delight. TQM perspective recognizes both qualitative as well as quantitative relationships between output and input. The value does not include only the physical goods but also the prestige, pride of ownership, warmth and pleasure in long lasting relationship with the customer. The TQM process highlights the fact that quality is a continuous process that can be broken anywhere in the system of supply and customer service. An organization can let each and every person in its organisation the importance of quality by making them aware of the important role each one plays in the formation of quality. In general, a process helps to change a set of inputs into desired outputs in the form of products and

Act

Plan

Check

Do

PDCA Cycle Deming Wheel The TQM process is both a working process and a quality philosophy. Principles and Actions of TQM ------------------------------------------------------------------------Principles Actions -------------------------------------------------------------------------The approach Management led The scope Company wide The scale Everyone is responsible for quality

The philosophy Prevention not detection The standard Right first time The control Cost of quality The theme Continuous improvement The dimensions Human, technical and cultural -----------------------------------------------------------------------------To develop TQM process the organization has to be guided through the following basic rules of action ; Stages of implementation of TQM: 1. Identification & preparation: This stage is concerned with the identification and collection of information about the organization in the prime areas where improvement will have most impact on the organisations performance. It is important also to find out the total cost of quality. This will include the cost of waste, error correction, failure appraisal and future prevention of errors in the organization. At this stage it is also important to understand the views and opinions of the customers, managers and employees. This will help to understand the magnitude of the problem. The measurement of the cost of quality made at the beginning of the TQM process can be compared to the cost at a later stage to establish the achieved improvement. The initial measurement of the cost will help to identify where the improvement must be made. It must be ensured that all data and information are correct. 2. Management Understanding: This step is concerned with ensuring that the management understands the objective and methodology of TQM and is ready to adopt those methods. Sometimes, to adopt TQM procedures, a significant change in management thought and process is often required and this takes time. Therefore, it is necessary to educate management so that they themselves can take the lead in the process and educate others. 3. Scheme for improvement: In this stage it is necessary to identify the quality problems in each division, in each department and throughout the whole organization. A scheme for training for improvement can be established after the realization of the following aspects of the organization;

Purpose of the department Customers and suppliers relationship Meeting customer needs Causes of problems and their best solutions. Prevention of recurring problems. Customer satisfaction. Priorities for improving efficiency. At this stage it is essential to know whether investment is required for training, management time and communication. Arrangement should be made for them. 4. Critical Analysis: At this stage new targets are set and this is informed to everybody, including suppliers and customers. Progress of various stages is also acquired. Everybody in the organization , including internal as well as external customers, is made to work as per TQM procedures. New targets as required by the customers are set up at this stage. This will automatically upgrade the quality standard of the organization and maintain the competitive position in the market. List of techniques for TQM: 1. Customers perception survey. 2. Quality function deployment 3. Cost of quality statement. 4. Top Team workshop 5. Total quality seminars 6. Departmental purpose analysis 7. Quality training 8. Improvement action team 9. Quality circles. 10. Suggestion schemes 11. Help calls 12. Visible data 13. Process management 14. Statistical process analysis 15. Process capability analysis 16. Fool proofing 17. Just in Time manufacturing 18. Business process reengineering

19. Quality Improvement Team. TQM Model: Customer satisfaction is the focus and main purpose of TQM. This benefits the company in the long term and short term range. Basically the customers satisfaction depends upon the gap between the expected and the actual quality of the product offered to the customer. If there is a balance between the two, there is customers satisfaction. If the actual quality is higher than the customers expectations or if something is given beyond the customers expectations, there is delight. TQM aims at customers delight. The delighted customer becomes a loyal customer and will have complete trust in what the company offers or gives. The quality of product results in better reliability and this results in retention of loyal and delighted customers. Total Quality Management Model |____________________ _________________________ PRODUCT & SERVICE Quality CUSTOMER SATISFACTION Reliability - Attracting & Retaining Customers On time delivery - Trust Building Error free products - Need Identification __________________________ ________________________________ _____________ _____________________ People COMPETITIVENESS Involvement @ Market Standing for continuous Customer preference improvement @ Profit _________________________ QUALITY SYSTEM

_____________ _________________________ ______________________ ___________________________________________ ORGANISATIONAL GAINS Costs * Employee turnover Cycle time * Creativity & Innovations Employee satisfaction

The quality of the product depends on the ability of the company to identify both stated and unstated needs, translation of these needs into design specifications and designing and managing the process to keep quality level as per design and ensuring correct performance. This is possible only with a well designed quality system in which all employees and managers are involved at all times. Total Quality Management: Total Quality Management incorporates the features like: products that meet customer needs, control of process to ensure their ability to meet design requirements and quality improvements for the continued enhancement of quality. Customers satisfaction is based on the subjective comparison between the expectations and the actual quality received. Customers satisfaction depends on the timeliness and quality of the product. Quality system should possess a sound as well as technical perspective. To develop such a quality system, customers preference should be studied. Employees should be trained to be sensitive to the needs and rewards should be given to employees for making customers satisfaction their primary goal. Total Quality management should be based on the premise that any production or service can be improved and the process of improvement should be a continuous procedure. The essence of TQM is continuous improvement through collaborative efforts across functional boundaries and between organizational levels with the ultimate goal of providing customer satisfaction. This means that everyone at all levels should be involved in the process. Quality means meeting customers needs, formal and informal at lowest cost, first time and every time.

* Process quality Mgmt. * Bench Marking * Process performance @

EVOLUTION OF TQM: 1. Quality Inspection: Solving, sorting, investigating, corrective actions, identifying the source of non conformance and dealing with them. 2. Quality Planning: Developing quality manuals, producing process performance data, planning for quality. 3. Quality Management: Statistical process control, third party approval, quality system audit, use of quality costs, involvement of non-production operations. 4. TQM: continuous improvement system at all levels. Performance measurement, focus on leadership, employees empowerment. THE TQM APPROACH: Quality is a continuous process that can be broken anywhere in the system of supply and customer service. By motivating the employees and teaching them how they can contribute to the customers satisfaction, quality can be brought about consistently. The organization must remember that throughout the process of production there will be internal as well as external customers. In general, a process helps to change a set of inputs into desired outputs. The quest for continuous improvement of quality is a continuous cycle. The process of continuous improvement is based on the Deming Wheel. The wheel shows a continuous movement in a certain direction. The idea behind this is that the input which generates activities with measurable out put, is a process and the perfection of the process is the ultimate objective. PDCA CYCLE Deming Wheel

In a Dennings wheel, the plan defines the process, which ensures documentation and sets measurable objectives against it. The Do executed the process and collects the information required. The CHECK analyses the information in suitable format. The ACT obtains corrective action using the TQM Techniques. And methods and assesses future plans. At the end of each cycle the process is either standardized or targets are adjusted based on the analysis and the cycle continues. The TQM approach is both a practical working process and a quality philosophy for the organizations committed to growth and survival. It starts with a vision to continuously improve quality to continuously satisfy customers. SUCCESSFUL FACTORS OF TQM: Successful implementation of TQM depends on the following aspects; Training Bench Marking Customer satisfaction surveys Recognition and rewards Management commitment PRODUCTION PLANNING & CONTROL: Production planning and control is a tool available with management to achieve stated goals. Production planning starts with analysis of given data , ie, demand for product, delivery schedule etc., and on the basis of the information available, a scheme of utilization of firms resources like machine, material and men are worked out to obtain the target in the most economical way. Once a plan is prepared it is executed in line with the details given in the plan. Production control comes into action if there is any deviation

Act

Plan

Check

Do

between the actual and the planned. Whatever corrective action is required is taken to achieve the target, by using control methods. This is a pre-production control activity. Need for PPC: 1. Effective utilization of resources. 2. To achieve production objectives with respect to quality, quantity, cost and timeliness of delivery. 3. To obtain uninterrupted production flow in order to meet customers varied demands, 4. To help the company to supply products of good quality at competitive rates. Factors that affect production system , causing deviations; 1. Non-availabilty of material 2. Plant , machine and equipment breakdown 3. Changes in demand and rush orders 4. Absenteeism 5. Lack of coordination and communication between functional departments. Objectives of PPC: 1. Systematic planning of function of production activities to achieve the highest efficiency in products. To organize means of production like man, material, etc to achieve stated products in time and cost. Optimum scheduling of resources Coordination with other departments in regards to production. To conform to delivery schedule commitment Material planning and control To enable adjustments arising out of change in demand and rush orders. Functions of PPC: 1. Materials function: Raw material , finished parts, and components should be made available in required quantities and at the required time to ensure correct start and end of each production. This will ensure uninterrupted production. Functions include the

correct specification of materials, delivery dates, variety reduction, ie, standardization and procurement decision. 2. Machine and equipment function: This function is related to the detailed analysis of available production facilities, equipment down time, maintenance policy, procedures and schedules. The function is to make available machine time, with minimum down time because of breakdown 3. Methods: This function is concerned with the selection of best possible method of production. Developing specifications and deciding sequence of operation is an important function of PPC 4. Process planning (Routing): This function is concerned with the specific path or route that the raw material should follow to get transformed in to the finished product through such methods as fixing the layout and path of travel of raw material, breaking down of each component of operation for detailed analysis and deciding the set up time and process time for each operation. 5. Estimating: Operation time for each process is estimated. Standard time for each operation is established. 6. Loading and scheduling: Scheduling is concerned with preparation of machine loads and fixation of starting and ending dates for each of the operations. Machines are loaded according their capacity and availability. 7. Dispatching: Orders are released . Definite work is assigned to machines, work centres and men. Required material are issued from stores. Jigs and fixtures are made available . Necessary work orders are released. Keeping a record of all working of man and machine. 8. Expending: This is the work of keeping a close eye on the progress of each work. Bottlenecks are identified. Correction of errors are made and ensures that production rate is in line with schedule. 9. Inspection: Stage inspection is carried out to ensure proper quality of material and smooth running of equipments. 10. Evaluation: The entire process is evaluated and correction and improvement methods are found.

PRODUCTION PROCEDURE:

The PPC function depends on the type of product that is being produced. It is important to know whether manufacturing system is jobbing, batch, mass or flow system. It is the job shop unit that requires all the functions of PPC. PPC consists of; 1. Sales forecast: A detailed forecast of the demand and requirement of the product is submitted to the management by the Sales Department. 2. Preparation of Production budget: Production budget is prepared by the Finance Department. Management reviews the forecast and the budget required to take a decision on the annual quantities to be produced. 3. Engineering department to prepare details: The Engineering department then prepares drawings and Bill of Materials to check or modify the existing machines to meet the requirements. 4. Production Planning activity: Production planning activity begins as soon as the technical information is received from the engineering department. A schedule or time table is prepared. Inventory levels are checked. Make or buy decisions are made. The complete data on methods, process sheets, machine loading and production schedule is sent to the dispatch section. 5. Dispatching: Detailed production orders are sent to the dispatch department and the shops to specify how, when and where the operations are to be performed. 6. Progressing: Progress in manufacturing is continually checked and suitable corrective actions are taken whenever necessary. 7. Inspection: Inspection is carried to ensure that the end products are the same as planned. 8. Evaluation: Evaluation is carried out after and before production so that any sort of correction measures required can be carried out. 9. The finished product is transferred to stock and then delivered to the customers.

b) Standard tools are stocked and special tools are made in house or purchased from outside. c) Process planning activity normally does not exist. Supervisors decide the work methods, fixes the machines and estimates the completion time of the operation, based on the drawings and specifications. d) Schedules are prepared to mark the beginning and end of each activity. e) Progressing is done through meetings with supervisors. Batch Production Function of PPC: a) In this case materials and tools control are strict and rigorous. b) Systematic stock replenishment is made. c) Detailed route sheets of man material and processes are prepared. d) Detailed loading and scheduling schedules are prepared, in consultation with supervisors are prepared. e) Progressing is done thoroughly and detailed data is collected on the progress of the work. Continuous production: PPC function: a) Materials function is critical. No tools control is required because of the nature of the plant. b) No process planning activity is required to be done. c) Scheduling is restricted to final quantity required. d) Progressing required for only the final product quantity. Problems of Production, Planning and Control: A. Decision at Macro level at Production level B. Decisions at Macro level at operation and control level. Decision at Macro level at Production level (a) Process design (b) Work station design and equipment selection (c) Flow of work (d) Replacement policies.

MANUFACTURING METHODS AND PPC: Job production Functions of PPC a) Materials are purchased on receipt of the order.

Decisions at Macro level at operation and control level (a) Materials and tools control (b) Production control (c) Quality and cost control (d) Labour control PRODUCTION CONTROL:

Progress Control

Labour control

Dispatch

Material

PRODUCTION CONTROL: Production control is the function of management which plans, directs and controls the material supply and processing activities of an enterprise so that specified products are produced by specific methods to meet an approved sales programme. Outline of production control Loading and scheduling: The sales department issues work order which authorizes the manufacturing of a product. This order is the starting point of production control department. The Master Production Schedule (MPS) is prepared. This involves assessing labour, materials required and availability and determination of dates by which major functions must be completed. The loading of various work centers are carried out. Material Control: The function of material control section is that of assessing the need for material and then taking appropriate steps to meet those requirements. Dispatch and Progress: All plans and authorizations for production are dispatched to concerned manufacturing departments and regular inspection is carried to ensure that material is being manufactured as per planned design and quality. Any deviation is rectified. Loading, sequencing and scheduling: Output plans specify when products are needed but these specifications must be transformed into operational terms to be implemented on the shop floor. The Operational system is as follows; Sales Programme

Manufacture

Customer Functions of production Loading, Sequencing & Scheduling: Output plans specify when products are needed . These plans are to be transformed into operation terms to be implemented on the shop floor. The actual system is as follows;

Out Plan Master Schedule & Materials Requirem ent Plan Loading Sequencing Scheduling Assigning specific jobs to each Work centre for the planning period Determining the order for processing Of all jobs Establishing start and finish time

Material Schedule

Expediting Monitoring progress LOADING: Each job may be specific and have a unique specification and a routing system through various work centres. When a job order is released, each job is allocated to the work centre and this establishes the work load of that centre. This is called loading. The work is assigned to a specific

machine or worker. Loading can be expressed through the following means; 1. Gantt Charts 2. Visual Load profiles. GANTT CHARTS: This is a tool used for both loading as well as scheduling. This chart consists of a simple rectangular grid. Vertical lines divide the chart into units of time. The unit can be year, month, day, hour, as per requirement. The horizontal section divides the chart into sections that can represent work tasks or work centres. This chart has the advantage of being very easy to read and conveying information about production on the shop floor quite clearly. Eg: There are three jobs which are to be processed, I, II, III. The job centres are A, B, C and D. This can be represented in the Gantt Chart as below;

When there are overloads, some of the load can be shifted to alternative work centres. This can be done either by lot shifting where a job order is split and only part of it is processed and others are processed later. Or it can be done by operation splitting where some of the work jobs are processed in one work centre and some others in another work centre. PRIORITY Sequencing: Sometimes when there are more jobs than can be handled with exiting facilities, priorities have to be fixed. All jobs are kept in a queue. The job with the highest priority is assigned Priority Sequencing. Criteria for sequencing: 1. Set up cost 2. In process inventory 3. Idle time 4. Average time to complete job 5. Average number of jobs waiting in the queue 6. Average time the job is likely to take. Priority sequencing rules: 1. First come fist served FCFS) 2. Earlier Due Date (EDD) 3. Shorting processing time. (SPT) 4. Least Slack (LS) 5. Longest Processing Time (LPT) 6. Preferred Customer Order (PCO) Sequencing Problems: Problems in sequencing arise when there is need for determining optimum order or performing a number of jobs of facilities according to some pre-assigned order to optimize the out put in terms of cost, time or profit. Production consists of several operations to be performed in a given sequence. Frequently there are many operations that are required to be done in the same work station at the same time. Under such situations, it is necessary to chose from the operations. There are some jobs, say n number of jobs , each of which must be processed through machines no. m1, m2, m3, .mn, one at a time. The order of processing each job through the machines is given and the time taken to process each job on each machine.

Days

C B A

B A C B

C B A

II

A III

Jobs

VISUAL LOAD PROFILES: This is a graph that compares work loads and capacities on a time scale.The load consists of open orders, ie, existing orders from customers assigned to work centres. In computer systems, the load consists of open orders and planned ,ie, work from prospective customers.

The problem is to determine the order of processing of n jobs so that the total elapsed time is all the jobs will be minimum Assumptions: 1. No machine can process more than one job at a time. 2. Process times are independent of processing jobs. 3. Once job is started, it is continued till completion. 4. Moving a job from machine to machine is negligible Solutions: 1. N jobs and 2 machines problems Rule: 1. Select the smallest processing time from the given list of processing times Rule: 2. Do the job with the minimum time required first in the first machine and do the job requiring the maximum time for processing first on machine no. 2. Rule 3: Repeat this procedure for all jobs. Rule 4: Find the total processing time as per the sequence determined. Also find out the idle time. 2. N job three machine problem: There are three machines M1, M2, M3. Rules: 1. Convert the three machine problem into two machine problem by introducing two fictitious machines G and H So that G1 = M1 + M2i H1 = M2 + M3i where I = 1.2.3.4.n Rule 2: Once the problem is converted to n job 2 machines, the sequence is determined using the first procedure. Rule 3: For the optimal sequence determined, find out the minimum total elapsed time and the times associated with the machines. Forwarding Scheduling and Backward Scheduling: Forward Scheduling: This is commonly used in job shops where customers place their orders on need as soon as possible basis. The scheduling determines start and beginning of next priority job by assigning it the earliest available time slot from that time.. It also determines when the job will be finished at that particular work centre. Since the jobs are started and begun as early as possible, they will also be consequently available at the market before they are due.

The set forward method generates in-process inventory that are needed at subsequent work centres and higher inventory cost. Backward scheduling: This method is often used in assembly type industries where delivery dates are committed in advance. The method determined the start and finish times of a waiting job by assigning them to the latest available time slot that will enable each job to be completed just when it is due, but not before. This minimizes inventories and inventory holding cost. As it is made at the last minute, it has to be sent directly to the market from the work centre. Obt raw Oper 1. Oper 2. Final Material Assly. Forward Scheduling Time Period 9 Backward Scheduling Final Assly.

1 10

2 11

obt. Raw mat

Opr 1

Oper 2.

Critical Ration Scheduling: This is a technique for establishing and maintaining priorities among the jobs in a factory. Critical ratio is an index that sets relationship between the time that a product is required and when it can be supplied. Time the job is need (Demand time --------------------------------------------Supply lead time Product is required in 20 days ----------------------------------------------------- = 2 Product can be made available in 10 days.

Critical Ratio Eg: Critical Ratio

The critical ratio of 2 means that time available for delivery of material is twice the time required to manufacture the product. Critical ration of i) Greater than one means there is sufficient time and job can be completed ahead of schedule. ii) Equal to one means just on schedule and requires close watch. iii) Less than one means that the job is critical and needs to be expedited to complete on schedule.

Questions: Q1. What are the different measures of capacity? Define capacity planning. Q2. What are the short-term and long-term capacity planning strategies? Enumerate the factors that favour under capacity and over capacity in production. Q3. Define TQM. What will be the scheduling strategy in case of continuous and intermittent production? Q4. Q5. What are the factors influencing effective capacity? How will you estimate future capacity needs?