Manufacturing

Planning and Control

MPC 6th Edition
Chapter 8

McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Production Activity Control

Production Activity Control (PAC) concerns
the execution of material plans.
A number of MPC activities, including
Shop-floor Scheduling and Control
(SFC), Vendor Scheduling and Followup, Order Release, and Purchasing fall
partly or completely within the realm of
Production Activity Control.
8-2

Agenda

8-3

Production Activity Control in

the MPC System
Resource
planning

Sales and operations

planning

Demand
management

Master production
scheduling
Detailed capacity
planning

Detailed material
planning
Material and
capacity plans

Order release
Shop-floor scheduling
and control (SFC)

Purchasing
Production
activity
control

Vendor scheduling
and follow-up
8-4

System LinksMPC and

Production Activity Control

8-5

Just-in-Time (JIT) Effect on

PAC

Formal systems for shop-floor control are largely

unnecessary under JIT
PAC functions are simplified
Order

release through kanbans or other pull system

Limited work-in-process inventories
Detailed scheduling is not needed
No data collection or monitoring requirementsonly raw
material and finished goods inventories

Vendor scheduling may be more complex under JIT

8-6

Production Activity Control

and Company Environment
The primary PAC objective is managing
material flows to meet MPC plans
Other objectives may pertain to efficient use
of capacity, labor, tools, time, or materials
Under JIT the objective is material velocity
PAC objectives reflect the firms strategy and
competitive position

8-7

Production Activity Control

Techniques

8-8

Basic Shop Floor Concepts

Routing and lead-time data are essential

inputs
Routing

specifies the operation, its duration,

and the work center performing the work
Lead times typically consist of four elements

Run time
Setup time
Move time
Queue time
8-9

Routing Data and Operation

Setback Chart

10
8-10

Operation Setback Chart

Part D has three
operations

Sub-Assembly

Finished Product

Component parts
8-11

Lead-Time Management
The four elements of lead time (run, setup,
move, and queue) can be compressed with
good PAC management
A basic principle of MPC systems is to
substitute information for inventory

The

knowledge of when an order will arrive at

a work center replaces the need to WIP
inventory feeding the work center
8-12

Gantt Charts

Gantt charts show a schedule

Each

step listed separately

Relationship between steps portrayed visually

8-13

Gantt Charts
The incoming orders at Tom's Sailboard follow different routes through the shop
but all orders must stop at each of the three work centers in the plant. The table
below shows all tasks for four jobs that arrive over 5 days and need to be
scheduled at the company. It is currently November 10 and Tom works a sevenday week.

_____________________________________________________
Order
(B)iff
(G)riffin
(H)erbie
(K)errie

Arrival
date
Nov. 10
Nov. 10
Nov. 12
Nov. 14

Job/WC Processing time (days)

routing WC 1 WC 2 WC 3
1-3-2
1
3
1
2-3-1
2
2
2
3-2-1
3
1
2
2-1-3
1
3
1

Assume that the new material for all orders is in stock and that a
first-come/first-served sequencing rule is used at all work centers. All three
work centers are idle as work begins on orders B and G on November 10.
14
8-14

Toms Sailboard
a. Construct a Gantt chart depicting the processing and idle times for the
three work centers for these four jobs.

Order
(B)iff
(G)riffin
(H)erbie
(K)errie

Arrival
date
Nov. 10
Nov. 10
Nov. 12
Nov. 14

Job/WC Processing time (days)

routing WC 1 WC 2 WC 3
1-3-2
1
3
1
2-3-1
2
2
2
3-2-1
3
1
2
2-1-3
1
3
1
15

8-15

Toms Sailboard

b.

How many days does each job wait in queue for processing at work center 2?
The determination of how long jobs wait at work center 2 is as follows: B and G
are processed immediately at work center 2, order K must wait 1 day (11/14) and
order H waits 4 days (11/12, 11/13 at WC3) and (11/16 and 11/17 at WC2).
16
8-16

Priority Sequencing Rules

Determine which job to run next at a particular
work center
When a job is near completion, the available
jobs in the queue are evaluated

8-17

Priority Sequencing Rules

Common rules
Order

slackwork on the job with the least total slack

Slack per operationdivide total slack by the number
of remaining operations, then work on job with least
slack
Critical ratiocalculate (time remaining)/(work
remaining) and work on job with lowest ratio
Shortest operation nextwork on the job that can be
completed most quickly
8-18

Priority Sequencing Rules

First Come, First Served
Shortest Operation Next
Earliest Due Date
Order Slack: (Time Remaining until Due Date
Sum of Remaining Setup and Run Time)
Slack per Operation
Critical Ratio: (Due Date-Now)/(Lead Time
Remaining)
_______________________________________
Lead Time Remaining includes setup, run, move
and queue time for all remaining operations.

19
8-19

Knox Machine
2.

The jobs below are waiting to be processed at the P&W Grinder at the
Knox Machine Company. (There are no other jobs and the machine is
empty.)

__________________________
due
Job
A
B
C
D

Machine processing
time (in days)*__
4
1
5
2

Date job arrived

at this machine
6-23
6-24
7-01
6-19

Job

date__
8-15
9-10
8-01
8-17

*Note: This is the final operation for each of these jobs.

___________________________________________________________

20
8-20

Knox Machine: Solution

a.

The production manager has heard about three dispatching rules:

the Shortest Operation Next Rule, the First-Come/First-Served
Rule, and the Earliest Due Date Rule. In what sequence would
these jobs be processed at the P&W grinder if each rule was
applied?
1.
2.
3.

Job
A
B
C
D

The shortest operation next rule: B-D-A-C

The first-come, first-served rule: D-A-B-C
The earliest due date rule: C-A-D-B

Machine processing
time (in days)*__
4
1
5
2

Date job arrived

at this machine
6-23
6-24
7-01
6-19

Job due
date__
8-15
9-10
8-01
8-17

*Note: This is the final operation for each of these jobs.

21
8-21

Knox Machine: Solution

b.

If it's now the morning of July 10 and the

Shortest Operation Next Rule is used, when
would each of the four jobs start and be
completed on the P&W grinder? (Express your
schedule in terms of the calendar dates
involved, assuming that there are 7 working
days each week.)

P & W Grinder

Job B
Date

7/10

D
7/11

7/1
2

A
7/1
3

7/14

7/15

C
7/16

7/17

7/18

7/19

7/20

7/21

22
8-22

Critical Ratio Scheduling

Eight weeks remain for constructing the a

50foot yacht. Assume that each week
consists of 5 work days, for a total lead time
of 40 days. The work required to complete
the yacht comprises 10 operations, 4 days
for each.
23
8-23

Yacht Project Example

a.

On Tuesday morning of week 3, 3 of the 10

operations had been completed and the
yacht was waiting for the fourth operation.
What's the critical ratio priority?

Critical Ratio

Time Remaining 40 11

1.04
Work Remaining
28

24
8-24

Yacht Project Example

b.

What's the critical ratio priority if only 2 of

the 10 operations are completed by
Tuesday morning of week 3?

Time Remaining 40 11
Critical Ratio

.91
Work Remaining
32

25
8-25

Finite Loading

26
8-26

The Bundy Company

The Bundy Company produces for three
products (A, K, and P). Each order goes
through the same three machine centers, but
not necessarily in the same sequence. Each
order must be finished at a machine center
before another can be started. Orders cannot
be split. The shop works a single eight-hour
shift five days per week. Assume that the time
to move between machines is negligible. each
machine center is operated eight hours per
day. All three machines are currently available
for scheduling, and no further orders will
arrive.
27
8-27

The Bundy Company

Machine
center
Order routing
A
3-1-2
K
2-3-1
P
3-2-1

Processing time
at machine center
___(in days)____ Order
1
2
3
due date
1
3
2
14
3
1
3
12
2
3
4
10

Note: Order due dates are fixed based on the

shop calendar. It is now 8:00 A.M. Monday (day
1), Monday of next week is day 6, etc.
28
8-28

The Bundy Company

Using the horizontal loading procedure with
earliest-due-date priority sequencing rule, prepare
a Gantt chart showing the production schedule for
the three orders above.

29
8-29

The Bundy Company

Using the vertical loading procedure and the
shortest-operation-next priority sequencing rule,
prepare a Gantt chart showing the production
schedule for the three orders above.

30
8-30

Process Design Impact

Scheduling

Batch Manufacturing: Work Orders

Repetitive Manufacturing: JIT/Kanban

31
8-31

Theory of Constraints (TOC)

TOC focuses effort on bottleneck resources

Bottlenecks

limit the capacity of the entire plant

Objective is to maximize throughput

Bottlenecks may be constraints other than
work centers
Constraints are identified, buffered with
inventory, and their importance is stressed to
the entire factory

8-32

Theory of Constraints
Scheduling

Drum-Buffer-Rope
Drumbottleneck

work centers which control the tempo

of workflow through the plant
Bufferinventory and/or scheduling activities to protect
the throughput at bottlenecks from random variation
Ropeuse of pull scheduling at non-bottleneck
resources

Material moves through non-bottleneck resources as

quickly as possible, bottlenecks are managed for
maximum efficiency
8-33

TOC Scheduling

Potential bottlenecks are

identified using rough-cut
capacity planning

Scheduling is completed
according to the work
center type
8-34

Capacity Utilization Chart

Work centers over a

capacity threshold (80%)
are considered bottlenecks

8-35

Buffers

TOC uses both safety stock and safety lead

time at bottleneck operations
Safety

lead time is introduced between

sequential orders at the bottleneck
Safety stock of completed parts from
preceding, non-bottleneck operations is held in
front of the bottleneck to prevent shortages

8-36

TOC and Lot Sizing

Lot sizes are calculated differently for bottleneck

and non-bottleneck resources
For

the same finished item, lot sizes at different

operations may be different
TOC splits orders at non-bottleneck resources
and combines orders at bottlenecks

This maintains supply of non-bottleneck parts

while reducing setup time and/or increasing
efficiency at the bottleneck
8-37

Managing the TOC

Schedule

Schedule new orders on the bottleneck operations (drums)

Exploiting the drums

Release raw materials to non-bottlenecks only when scheduled

Proactive management of buffers

If necessary, add capacity to drums by moving work or outsourcing

Material releaseropes

Finite backward scheduling

Ensure that bottleneck resources are not starved for orders

Elevating the drum

Increase capacity at the bottlenecks to allow the organization to grow

8-38

TOC Contributions

8-39

TOC Implementation Issues

Requires a major shift in manufacturing

mindset (paradigm shift)
Its

OK to not work (at a non-bottleneck) if

there are no orders

Firm needs sound systems, education, topmanagement support, and willingness to

change

8-40

Vendor Scheduling and

Follow-Up
Objectivealign orders with due dates
Vendor must have continually updated
information concerning priorities
Contractual agreements may limit the type
and degree of change the vendor must
accommodate
Use of the Internet can enhance the speed
and efficiency of information exchange

8-41

Principles

Production activity control system design must be in

concert with the firms needs.
Vendor capacities should be planned and
scheduled with as much diligence as internal
resources.
Lead times must be managed.
Feedback from the PAC should provide both status
and early warning information to other MPC
modules
8-42

Principles

E-based systems can improve communication between

customer and vendor, reducing lead time and overhead.
TOC scheduling provides improved performance by
focusing on the constraining resources.
TOC implementation requires a change in culture.
Traditional priority rules can play a role in scheduling
non-bottleneck resources.
Stability in manufacturing loads and capacity plans
facilitates shop-floor execution.

8-43

Quiz Chapter 8

Production activity control (PAC) actions take place mainly in

which section of the MPC system?
The shop-floor control system is kept current on changes in
material plans by the MRP system? (True/False)
Formal shop-floor control systems are unnecessary under
JIT? (True/False)
A visual representation of the scheduling process can be
provided by _________ charts.
The TOC scheduling process is called ______-__________________.
In TOC scheduling, buffers are maintained before and after
_____________ resources.
8-44