Production Activity Control

Arnold, Chapman, & Clive: Intro Materials
Management, 6
th
ed.
2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Production Activity Control
Chapter 6
The time comes when plans must be
put into action

Management, 6
th
ed.
Responsible for executing the:
Master Production Schedule (MPS)
Materials Requirements Plan (MRP)

At the same time:
Make good use of labor, machines and materials
Minimize work-in-process inventory
Maintain customer service
Management, 6
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Release work orders
Control work orders to complete on time
Control the flow of work
Through manufacturing
Carrying out the plan
To completion
Manage day-to-day activity and provide support
Management, 6
th
ed.
Production
Planning
Master
Production
Scheduling
Material
Requirements
Planning
Production
Activity
Control
Purchasing
Input/
Output
Control
Operation
Sequencing
Planning
Implement
and
Control
Figure 6.1
Priority planning and production activity control
Management, 6
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Planning
To meet delivery dates
Ensure:
The required materials, tooling, personnel and
information
Schedule:
Start and completion times for each shop order
Develop load profiles for the work centres`
Management, 6
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ed.
Implementation
Gather information needed to make the
product
Release orders to the shop floor
MRP authorized

Dispatching

Management, 6
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Control
The production order has been released
Is corrective action necessary?
Rank the orders by priority
Establish a dispatch list
Track performance to planned schedule
Replan, reschedule, adjust capacity
Monitor and control WIP, lead times, cues
Report work center effciency, scrap, times

Management, 6
th
ed.
Feedback
PRODUCTION ACTIVITY CONTROL
PLAN
Schedule
Replan
CONTROL
Compare
Decide
EXECUTE
Work
Authorization
Dispatch
MANUFACTURING OPERATIONS
Figure 6.2 Production control system
Management, 6
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ed.
Manufacturing Systems
Flow manufacturing
Intermittent manufacturing
Project manufacturing
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ed.
Flow Manufacturing
High volume
Standard products
Repetitive or
Continuous
Management, 6
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ed.
Flow Manufacturing
Routings are fixed
Work centers arranged according to the routing
Dedicated to a limited range of products
specifically designed equipment
Use of mechanical transfer devices
Low WIP and throughput times
Capacity is fixed by the line

Management, 6
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ed.
Flow Manufacturing
Plans the flow of work
Planned schedule of materials to the line
Implementation and control are relatively
simple
Management, 6
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Intermittent Manufacturing
Many variations in:
product design
process requirements
order quantities
Management, 6
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Flow of work is varied - work flow not
balanced
Machinery and workers must be flexible
Usually grouped according to function
Throughput times are generally long
Capacity required depends on product mix
Management, 6
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ed.
Production Activity Control is complex:
number of products made
variety of routings
scheduling problems
PAC is a major activity
Controlled through shop orders for each
batch
Management, 6
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ed.
Project Manufacturing
One or a small number of units
Usually in one place
Close coordination between:
Manufacturing, Marketing, Purchasing,
Engineering
Examples:
Shipbuilding
House construction

Management, 6
th
ed.
Data Requirements
Need to know:
What and how much to produce
When parts are needed
What operations and times are required
Work center capacities
Organized into databases:
Planning or Control
Management, 6
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Planning Files
Item master file
Product structure file
Routing file
Work center master file
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Item Master File
Part number
Part description
Manufacturing lead
time
Lot size quantity
Quantity on hand
Quantity available
Allocated quantity
already assigned to
other work orders
On-order quantities
Management, 6
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ed.
Product Structure File
Bill of material file
A listing of single-level components to make an
assembly
Forms a basis for a pick list
Management, 6
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Routing File
Step-by-step instructions on how to make
the product
Operations and their sequence
Operation descriptions (brief)
Equipment tools and accessories
Operation setup times
Operation run times
Lead times for each operation
Management, 6
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Work Center Master File
Details on each work center
Work center number
Capacity
Shifts, machine hours and labor hours per week
Efficiency
Utilization
Average queue time
Alternative work centers
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Control Files
Shop order master file
Summarized data on each shop order

Shop order detail file
Current record of each operation
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Shop Order Master File
Shop order number
Order quantity
Quantity completed
Quantity scrapped
Quantity of material
issued to the order

Due date
Priority
Balance due
Cost information
Management, 6
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ed.
Shop Order Detail File
Operation number
Setup hours planned and actual
Run hours planned and actual
Quantity complete (at this operation)
Quantity scrapped (at this operation)
Lead time remaining
Management, 6
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Order Preparation
A check for available:
Tooling
Materials
Capacity - when it is needed
Management, 6
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Scheduling
To meet delivery dates
Make the best use of resources
Need information on:
Routing
Capacity
Competing jobs
manufacturing lead times
Management, 6
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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
Management, 6
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Manufacturing Lead Time
Queue Setup Run Wait
Move
Queue Setup Run Wait
Move
Need a lift truck here
Management, 6
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ed.
Cycle Time
The length of time from when material
enters a production facility until it exits
APICS Dictionary 11th Edition

Synonym - throughput time
Management, 6
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ed.
Example Problem
Work Center A operation time = 30 + (100 x 10) = 1030 minutes
Wait time = 240 minutes
Move time from A to B = 10 minutes
Work Center B operation time = 50 + (100 x 5) = 550 minutes
Wait time = 240 minutes
Move time from B to stores = 15 minutes
Total manufacturing lead time = 2085minutes
= 34 hours, 45 minutes
Management, 6
th
ed.
Scheduling Techniques
Forward Scheduling
Start when the order is
received
May finish early
Used to determine the
earliest completion
date
Determine promise
dates
Builds inventory
Backward Scheduling
Uses MRP logic
Schedule last operation
to be complete on the
due date
Schedule previous
operations back from
the last operation
Reduces inventory
Management, 6
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ed.
Order Recieved Due Date
Forward Scheduling
Backward Scheduling
1 2 3 4 5 6 7 8 9
Figire 6.4 Infinite load profile
Forward and Backward Scheduling:
Infinite Load
Material
Ordered
3rd
Operation
1st
Operation
2nd
Operation
Material
Ordered
3rd
Operation
1st
Operation
2nd
Operation
Management, 6
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Capacity
Capacity Underload
Capacity Overload
Figure 6.5 Infinite load profile
Infinite Load Profile
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Order Recieved Due Date
Forward Scheduling
Backward Scheduling
1 2 3 4 5 6 7 8 9
Figure 6.6 Forward and Backward scheduling: finite load
Forward and Backward Scheduling:
Finite Load
Material
Ordered
3rd
Operation
1st
Operation
2nd
Operation
Material
Ordered
3rd
Operation
1st
Operation
2nd
Operation
Management, 6
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Capacity
Figure 6.7 Finite load profile
Smoothed Load
Finite Load Profile
Management, 6
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Example Problem
Backward Scheduling
A company has an order for 50 brand X to be
delivered on day 100
Only one machine is available for each operation
The factory works one 8 hour shift 5 days a week
The parts move in one lot of 50
Part Operation Time
A 10 5
20 3
B 10 10
X Assembly 5
X
A B
Management, 6
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85 90 95 100
X
Assembly
Part B
Part A
Working Days
Example Problem Answer
OP 10 OP 20
OP 10
Management, 6
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Operation Overlapping
The next operation is allowed to begin
before the entire lot is completed
Reduces the manufacturing lead time
Order is divided into at least two transfer
lots
SU
Lot 1 Lot 2
Operartion A
SU
Lot 1 Lot 2
Operation B
T T
Transfer Time
Management, 6
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ed.
Operation Overlapping
Costs involved:
Handling costs between work centers
May increase queue and wait for other
orders
Idle time if the second batch doesnt arrive
in time
Management, 6
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ed.
Size of the Transfer Batch
SU
A
= Set up time operation A
SU
B
= Set up time operation B
RT
A
= Run time per piece operation A
RT
B
= Run time per piece operation B
Q
T
= Total order size
T
1
= size of the first transfer batch

T
1
= Q
T
x RT
A
- SU
B
T
2
= Q
T
- T
1

RT
A
+ RT
B

Management, 6
th
ed.
Size of the Transfer Batch
If the second operation is slower than the
first make the first transfer batch small
i.e. get the slower machine started early

If the second machine is faster than the first
make the first transfer batch large
i.e. the second machine will be able to catch up
Management, 6
th
ed.
Example Problem
30
70 x 10 = 700 30 x 10 = 300
Operartion A
50
70 x 5 = 350 30x5 = 150
Operation B
T T Transfer Time
0 30 730 1,000 (Minutes)
740 790 1140 1290
1,010
Stores 1305
Management, 6
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ed.
Operation Splitting
Reduces manufacturing lead time
The order is split into at least two lots
Similar machines are run simultaneously

Setup time is low compared to run time
Operators can run more than one machine

Management, 6
th
ed.
Operation Splitting
SU
Run
SU
Run
SU
Run
One Machine
Two Machine Operation Splitting
Reduction in
Lead Time
Figure 6.9 Operation splitting
Management, 6
th
ed.
Load Leveling
Load Report
Tells PAC the current and upcoming load
on a work center
Based on standard hours of operation for
each order
Management, 6
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Load Report
Work Center: 10 Available Time: 120 Hours per week
Description: Lathes Efficiency: 115%
Number of Machines: 3 Utilization 80%
Rated Capacity: 110 standard hours / wk
Week 18 19 20 21 22 23 Total
Released
Load
Planned Load
105 100
80
60
30
80
0
130
0
80
315
350
Total Load 105 100 140 110 130 80 665
Rated
Capacity
110 110 110 110 110 110 660
(Over) /
Under
Capacity
5 10 (30) 0 (20) 30 (5)
Figure 6.10 Work centre load report
Management, 6
th
ed.
Scheduling Bottlenecks
Some workstations are overloaded and
some are underloaded

Bottlenecks
a facility, function, department, or resource
whose capacityis equal to or less than the
demand put upon it.
APICs Dictionary 11th Edition
Management, 6
th
ed.
Throughput
The total volume of product passing
through a facility
Bottlenecks control the throughput
Work centers feeding bottlenecks will build
inventory
Work Centers fed by bottlenecks have their
throughput controlled by the bottleneck
Management, 6
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ed.
Example Problem - Bottlenecks
Wagon Wheel Assembly - 1200 sets (2) per week
Handle Assembly - 450 per week
Final Assembly - 550 wagons per week
a. What is the capacity of the factory?
b. What limits the throughput of the factory?
c. How many wheel assemblies should be made?
d. What is the utilization of the wheel assembly?
e. What happens if utilization is 100%
Management, 6
th
ed.
Example Problem - Bottlenecks
a. 450 units per week
b. Throughput is limited by the handle
assembly operation
c. 900 wheel assemblies per week
d. Utilization of the wheel assemblies =
900 1200 = 75%
e. Excess inventory of wheel assemblies
Management, 6
th
ed.
Bottleneck Principles (7)
1. Utilization of a non-bottleneck resource is not determined
by its potential, but by another constraint in the system.
2. Utilization of a non-bottleneck 100% of the time does not
produce 100% utilization.
3. The capacity of the system depends on the capacity of the
bottleneck.
4. Time saved at a non-bottleneck saves the system nothing.
5. Capacity and priority must be considered together.
6. Loads can and should be split.
7. Focus should be on balancing the flow in the shop.
Management, 6
th
ed.
Managing Bottlenecks
1. Establish a time buffer before each bottleneck.
2. Control the rate of material feeding the bottleneck.
3. Do everything to provide the bottleneck with
capacity.
4. Adjust loads.
5. Change the schedule.
Back schedule before the bottleneck; forward
schedule after the bottleneck.

Management, 6
th
ed.
Theory of Constraints
1. Identify the constraint
Process 1
5 per hour
Process 2
7 per hour
Process 3
4 per hour
Process 4
9 per hour
Marketing sells
5 per hour?
Figure 6.11
Management, 6
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ed.
Theory of Constraints continued
2. Exploit the constraint. (idle time?)
3. Subordinate everything to the constraint.
4. Elevate the constraint.
5. Once the constraint is a constraint no-
longer, find the new one and repeat the
steps.
Management, 6
th
ed.
Drum-Buffer-Rope
Drum - pace of production set by the
constraint
Buffer - inventory established before the
constraint
Rope - coordinated release of material
Management, 6
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ed.
Example Problem
Work Center 20: Capacity = 40 hours per week
Y: Setup = 1 hour, Run Time = .3 hours per piece
Z: Setup = 2 hours, Run Time = .2 hours per piece

Let x = the number of Ys and Zs to produce
1 + 0.3x + 2 + .2x = 40 hours
0.5x = 37 hours
x = 74 (you can produce 74 Ys and 74 Zs)
X
Y Z
Management, 6
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ed.
Implementation
Issuing shop orders to manufacturing
Which have a good chance of being
completed on time
Orders which have the:
tooling
material
capacity
Management, 6
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ed.
Shop Order Information
Order number,
description
Engineering Drawings
Bills of Material
Route Sheets
Material Issue Tickets
Tool Requisitions
Job Tickets
Move Tickets
Management, 6
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ed.
Review Order
Check Tooling
and Material
Availability
Check Capacity
Requirements
and Availability
Release
Order
Okay?
Okay?
Resolve
No
Yes
Resolve
or
Reschedule
No
Yes
Figure 6.12
Order Release
Process
Management, 6
th
ed.
Control
Control the work going into and out of a
work center: Input/output control

Set the priority of orders to run at each work
center

Management, 6
th
ed.
Input / Output Control
Input Rate
Control
Output Rate
Control
Queue
(Load, WIP)
Figure 6.13
Input/output control
Management, 6
th
ed.
Work Center: 201
Capacity per period: 40 standard hours
Period 1 2 3 4 5 Total
Planned Input 38 32 36 40 44 190
Actual Input 34 32 32 42 40 180
Cumulative Variance -4 -4 -8 -6 -10 -10
Planned Output 40 40 40 40 40 200
Actual Output 32 36 44 44 36 192
Planned Backlog 32 30 22 18 18 22
Actual Backlog 32 34 30 18 16 20
Figure 6.14 Input/output report
Management, 6
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ed.
Cumulative Variance
The difference between the total planned for
a given period and the actual total for that
period

Cumulative variance
= previous cumulative variance + actual
- planned
Management, 6
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ed.
Work Center: 201
Capacity per period: 40 standard hours
Period 1 2 3 4 5 Total
Planned Input 38 32 36 40 44 190
Actual Input 34 32 32 42 40 180
Planned Output 40 40 40 40 40 200
Actual Output 32 36 44 44 36 192
Planned Backlog 32 30 22 18 18 22
Actual Backlog 32 34 30 18 16 20
Figure 6.14 Input/output report
Cumulative variance week 2 = -4 + 32 -32 = -4
Management, 6
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ed.
Example Problem: Input/Output
Week 1 2
Planned Input 45 40
Actual Input 42 46
Cumulative Variance
Planned Output 40 40
Actual Output 42 44
Cumulative Variance
Planned Backlog 30
Actual Backlog 30
Management, 6
th
ed.
Operations Sequencing
a technique for short term planning of
actual jobs to be run in each work center
based on capacities and priorities.
APICS Dictionary 11th Edition

Priority: The sequence in which jobs should run
at a work center
Management, 6
th
ed.
Dispatching
Selecting and sequencing jobs to be run at a
work center
Dispatch list
Plant, department, work center
Part number, shop order number, operation number
and description
Standard hours
Priority information
Jobs coming to the work center
Management, 6
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ed.
Dispatching Rules
FCFS - First come, first served
EDD - Earliest job due date
ODD - Earliest operation due date
SPT - Shortest processing time
CR - Critical ratio
Management, 6
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ed.
Critical Ratio
CR= due date - present date
lead time remaining

= actual time remaining
lead time remaining
CR<1 Behind
Schedule

CR=1 On Schedule

CR>1 Ahead of
Schedule

CR<0 Already late
Management, 6
th
ed.
Sequencing Rule
Job
Process
Time
(days)
Arrival
Date
Due
Date
Operation
Due Date
FCFS EDD ODD SPT
A 4 223 245 233 2 4 1 3
B 1 224 242 239 3 2 2 1
C 5 231 240 240 4 1 3 4
D 2 219 243 243 1 3 4 2
Figure 6.16 Application of sequencing rules
Sequencing Rules
Management, 6
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ed.
Production Reporting
Feedback of what is actually happening on
the shop floor
Needed for management decisions

on-hand on-order
job status shortages
scrap material shortages
Management, 6
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ed.
Summary
Converting MRP plans into action
Reporting results
Revising plans
Need:
detailed and current schedules and priorities
Results:
on-time deliveries, well utilized labor, and
equipment, minimum inventory levels

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Arnold, Chapman, & Clive: Intro Materials

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