278 4 The MRP II / ERP Concept: Business Processes and Methods

The following describes infinite loading techniques. Infinite loading is

frequently the best capacity planning method. In many companies it is
possible to modify labor capacities within one day by more than 50%.
• Order-oriented infinite loading aims to achieve a high delivery
reliability rate, or to meet the due date for production or procure-
ment orders. Overcapacity is often maintained intentionally for
strategic reasons (meeting due dates). After scheduling (backward
or forward, for example) all the orders, each scheduled operation
represents a load at the specified work center and in the time
period containing its start date. The sum of all these loads is
compared to the available capacity for each time period. This
yields load profiles showing the overcapacity or undercapacity for
each work center and time period. The subsequent planning then
attempts to balance capacity against load. This commonly used
technique for infinite loading is also called capacity requirements
planning (CRP), particularly in connection with software for
capacity management. There exist also some variations of CRP.
See Section 13.2.
• Kanban and the cumulative production figures principle (CPFP)
were introduced above in Section 4.3.2. It is noteworthy that these
two simple materials management techniques serve at the same
time as simple capacity management techniques. Execution control
by the kanban technique is a form of infinite loading, as it assumes
a very high level of flexibility of capacity in the immediate term.
See Sections 5.3 and 5.4.
• Order-wise infinite loading (order for order, individually): For
companies handling small numbers of high value-adding orders,
such as for the production of special-purpose machines, planning
takes place after loading each new order, or even after each new
operation. As soon as an overload is detected, all work centers are
checked, and load and capacity are adjusted until a feasible
schedule is obtained. See Section 13.2.

The following describes finite loading techniques:

• Operations-oriented finite loading aims to minimize possible
delays in individual operations and thus average potential delay in
the entire production order. The individual operations are planned
time period by time period on the basis of orders, starting from the
start date determined by lead-time scheduling. This means
establishing meaningful rules of priority for the sequence in which
operations are scheduled (sequencing rules), with the aim of
achieving maximum throughput. The queues waiting upstream of
 4.3 Introduction to Detailed Planning and Execution 279

the work centers are monitored and adjusted. This type of planning
provides a production simulation, that is, an actual working
program for the coming days, weeks, or months, according to the
planning horizon. See Section 13.3.1.
• Order-oriented finite loading ensures that as many orders as
possible are executed on time with low levels of goods in process.
Orders are scheduled in their entirety, one after the other, in the
time periods. The objective is to find priority rules that will enable
as many orders as possible to be scheduled. Those orders that can-
not be scheduled for completion on time by a computerized algor-
ithm are highlighted for attention by the planner, who may decide
to change order completion dates. This technique is a commonly
used technique for finite loading. See Section 13.3.2.
• As bottlenecks control the throughput of a production system,
constraint-oriented finite loading plans orders around bottleneck
capacities. It follows a theory of constraints (TOC) approach. An
application of this is drum–buffer–rope. Work centers feeding
bottlenecks should be scheduled at the rate the bottleneck can
process. A time buffer inventory should be established before the
bottleneck. A space buffer should be established after the bottle-
neck. Work centers fed by the bottleneck have their throughput
controlled by the bottleneck. Another application is the optimized
production technology (OPT) technique. First, only orders with a
minimum batch size are generated. These lots then come together
at bottleneck capacities, but are kept separate for the upstream and
downstream operations. Then, operations at the bottleneck
capacities are scheduled. Operations before the bottleneck are then
scheduled backward, while later ones are scheduled forward and
planned using normal lead times. See Section 13.3.3.
• Load-oriented order release (Loor) has high load as its primary
objective. Equally important are its secondary objectives of low
levels of work-in-process, short lead times in the flow of goods,
and delivery reliability. The aim of this heuristic technique is to
adapt the load to the capacity that is actually available. Thanks to a
heuristic, the matching of load to capacity can be limited to one
time period. See Section 14.1.2.
• Capacity-oriented materials management (Corma) is an operations
management principle that enables organizations to play off work-
in-process against limited capacity and lead time for customer
production orders. Corma makes intelligent use of critical capacity
that is available short term, by releasing stock replenishment
orders earlier than needed. This in turn provides for optimal
280 4 The MRP II / ERP Concept: Business Processes and Methods

sequencing, which reduces set-up time. All in all, Corma follows

the natural logic of production management as it is implemented in
practice in many medium-sized companies. In principle, stock
replenishment orders are viewed as “filler” loadings. The
achievement of flexible utilization of capacity demands a price,
however, as work-in-process increases. It is important that the total
costs for capacity and work-in-process and inventory in stock be
kept to a minimum. See Section 14.1.3.
• Order-wise finite loading (order for order, individually): In
practice, this can be considered to be identical to order-wise
infinite loading, with more flexibility in time axis.

All of these techniques can be used independently of company-

organizational implementation of planning & control. Thus, they can be
found in software packages of many kinds (logistics software or electronic
planning boards [Leitstand], simulation software, and so on). In one and
the same enterprise, it is quite possible that the company will use different
techniques for short-term planning and long-term planning.

4.4 Logistics Business Methods in Research and

Development (*)

Planning & control in the research and development area is basically

project management. The individual processes do repeat themselves, but
always with new products. This section will present some important
concepts and methods common to planning & control in this area. The
concepts will be treated later in the book only with regard to computer-
supported processes (in Section 16.5), so that the material in this section is
more extensive than that in Section 4.3 with regard to distribution,
production, and procurement.

4.4.1 Integrated Order Processing and Simultaneous

Engineering

Time-to-market is the total lead time through research and development

logistics for new products. It is the time required for product innovation,
that is, from product concept to introduction of the product to the market.