Introduction to Materials Management Chapter 5 – Capacity Management
Basic Capacity Definitions
Capacity Required – capacity needed to produce a desired output in a given time period Capacity Planning – determining the resources and methods needed to meet the priority plan Capacity Control – monitoring production, comparing with the capacity plan, and taking appropriate corrective actions Capacity Management – determining capacity needed as well as providing, monitoring, and controlling the capacity
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity versus Load
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Capacity Planning Levels
Resource Planning – Long range resource requirements linked to the production plan Rough-cut Capacity Planning – Used to check feasibility of MPS Capacity Requirements Planning – Detailed work center capacity plans linked to MRP
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity Planning Levels
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity Requirements Planning Inputs
Open Order File – found as scheduled receipts on MRP Planned order releases from MRP – Potential future orders Work Center file
Information on capacity in the work center Move, wait, and queue time information
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity Requirements Planning Inputs - Continued
Routing file – the path that the work will follow
Operations to be performed Operation sequence Work centers used Potential alternative work centers Tooling needed Standard setup times and run times
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Sample Routing File
Figure 5.3 Routing file
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity Available
Impacted by:
Product specification Product mix Methods used to make product Pace of work
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Finding Capacity Available
Rated Capacity = (available time) x (utilization) x (efficiency)
Available time – number of hours a work center can be used Utilization = [(hours worked)/(available hours)] x 100% Efficiency = [(actual production rate)/(standard production rate)] x 100%
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Capacity Load – Sum of all time required for orders on a work center - Example
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Example Load Profile
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Scheduling Orders
Back scheduling (the typical approach) – Start with the due date, use lead time to find the proper start date for each operation Forward scheduling – Launch the order into the first (gateway) work center, then use the lead times to find when the order will be completed at each work center
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Back Scheduling Example
An order for 150 of a component is due on day 135 An order starts at the beginning of a day and finished at the end of a day Operation times for the 150 ordered:
Operation Operation Operation Operation
10 20 30 40
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
– – – –
4 5 1 2
days in work center 12 days in work center 14 day in work center 17 days in work center 03
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Data from the work center file
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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The resulting work schedule
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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The work schedule shown graphically
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Making the plan
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
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Managing the Plan – Adjusting Capacity
Use Overtime or Undertime Adjust the number of workers Shift workers from other work centers Use alternative work centers to shift load Subcontract work
Introduction to Materials Management, 7th Edition Arnold, Chapman, Clive
© 2012, 2008, 2004, 2001, 1998, 1996 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.