Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing
Planning and Control
Lecture 9 Topic :
Segment A Topic:
Planning Concepts
ADVANCED
MANUFACTURING
SYSTEMS DESIGN
Manufacturing Planning
and Control
Planning Concepts
Slide 2
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Overview
• Manufacturing Planning
– Fundamental Concepts
– Variation –”The Enemy”
– Dealing With Variation
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Slide 3
Product Design
Demand Patterns
Aggregation
In Production and Distribution
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Fundamental Concepts (1)
Appropriate Manufacturing Philosophy
– Job, Batch, Mass Production
– Where Product is in Product Life Cycle
– Dealing With Variations
• Product Design
• Process Design
• Production/Demand
– Inventory of Goods
– Excess Capacity/Change capacity
– Degree of Automation/Technology
• Repetition
Slide 4
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Fundamental Concepts (2)
Appropriate Manufacturing Philosophy
– Concept of Quality
– Likely Competitor Actions
– Management Philosophy/Style
• Centralized/Decentralized
– Infrastructure
• Core Competencies
• Information Systems
• Worker Skills, Unionization
– Capital Recovery Requirements
– Risk/Reward Tradeoff
Slide 5
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Basic Framework for
Manufacturing Planning
and Control Systems
• Objectives
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–
–
–
–
Right Products, at the
Right Time, in the
Right Quantities, at the
Right Quality, at the
Right (Minimum) Cost
• Achieved in an Integrated, Rationalized
System
Slide 6
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Sources of Variation in
Manufacturing Systems • Timing of Demand Receipt
– Make to Order
– Make to Stock
• Quantity
– Reductions/Additions
• Available Production Resources
– Breakdowns
– Supplier Deliveries
– Errors in Estimates
Slide 7
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Strategies for Dealing with
Variation
• Identify
• Eliminate
• Reduce
• Acknowledge/React/Modify
Slide 8
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Basic Activities in Planning
and Control Systems
•
•
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•
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Determination of Product Design(s)
Determination of Amount to Produce
Balancing Demand for Resources (Time)
Determination of Operation Parameters
Detailed Planning/Sequencing
Dealing with Variation During Lead Time
Production and Delivery of Product
Slide 9
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Variation and Basic Mfg.
And Control Activities
• Product Design Variation
– Pre-release
– Post Release
• Demand Variation
• Resource Availability
– Breakdown
– Diversion
• Model vs. Reality
– Actual vs. Estimated
Slide 10
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Product Design Variation (1)
• Sources of Variation
– Overly Diversified Product Line
• Main Products
• Options within Main Products
– Different Solutions for Same Functionality,
Components
• Different Designs
• Different Suppliers
– Different Processes for Same Part Features
• Different Production Processes
• Different Routing (Same Processes)
Slide 11
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Product Design Variation (2)
• Strategies to Eliminate/Reduce Variation
– Overly Diversified Line
• Determine “Core” Products
• Determine “Core”/”Standard” Features
• Divestiture
– Differing Solutions for Same Function,
Component
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•
•
•
Slide 12
Group Technology
Concurrent Engineering
Long Term Relations with Suppliers
Bring Production In-House
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Product Design Variation (3)
• Strategies to React to Variation
– Overly Diversified Line
• Reevaluate Product Line
• Focused Factories Concept
– Differing Solutions for Same Function,
Component
•
•
•
•
•
Slide 13
Agile Manufacturing
Group Technology
Concurrent Engineering
Long Term Relations with Suppliers
Bring Production In-House
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Demand Variation
• Sources
– Inherent Variation in Demand Pattern
• Randomness in Customer Behavior
• Incomplete Forecasting Model
– Historical Data Missing or Unavailable
• Inability to Monitor/Predict Underlying Factors
– E.g., Weather, Government Action, …
– Changes in Factors Affecting Demand
• Individual Customers
• Market Conditions (General Economy)
• Competitive Environment (Competitor Actions)
Slide 14
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Forecasting of Demand
Pattern and Level
• Methods of Forecasting
– Historical Data
• Averaging Methods
• Exponential Smoothing
• Time Series
– Causal Factors
• Correlated Products
– Leading Indicators
– Source Products
– Changes in Competing Products
» Predict and Monitor Competitors, Total Market
Slide 15
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Existing/New Product
Forecasting
• Forecasting - Historical Data
– Best Fit (Curve Fitting, Least Squares)
– Regression (Factors)
– Reaction and Damping
• Forecasting - New Products
– Market Surveys
• Size of Market
• Degree of Penetration
– “Best Guess”
Slide 16
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Eliminating/Reducing
Demand Variation
• In Demand Pattern and Level
– Add Complementary Products To Line
• Seasonality
• Economic Conditions
– Aggregate Planning
– Coordinate Marketing and Manufacturing
• Concurrent Efforts (Manufacture and Marketing)
• In Forecast of Demand
– Use Multiple Models to Reduce Risk
• Historical
• Correlated Products
Slide 17
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Reacting to Demand
Variation (1)
• Frequent Recalculation/Reevaluation
• Reduce Risk/Uncertainty
– Convert Basis of Planning from Prediction to
Actual
• Customer Relationships (information Sharing)
• Incentives for Orders (Pricing)
– Reevaluate Closer to Delivery Date
• Shorten Administrative Lead Time
• Shorten Production Lead Time
• Shift Problem to Suppliers
– Add/Reduce Sub-Contracting as Needed
Slide 18
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Reacting to Demand
Variation (2)
• Eliminate/Reduce Forecast Error
– Use Strategies for Demand Pattern Variance
Reduction
– Improve Forecasting Models/Methodology
• Forecasting Errors are Inevitable
– Accept It
– Plan Using Range Rather than Point
Estimates
Slide 19
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Reacting to Demand
Variation (3)
• Aggregate Planning
– Earlier, Distributed Production
– Varying Delivery Schedules
– Varying Pricing/Marketing Strategies
• Varying Capacity
– Labor (Hire/Fire/Subcontract)
– Capital Equipment (Sub-Contract, Make/Buy)
• Maintain Inventories
• Maintain Surge Capacity
Slide 20
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing Planning
and Control
Segment A Topic: Planning Concepts
Lecture 9 Topic:
END OF SEGMENT
Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing
Planning and Control
Segment B Topic: Aggregate Planning
and Progress Control
Lecture 9 Topic :
ADVANCED
MANUFACTURING
SYSTEMS DESIGN
Manufacturing Planning
and Control
Aggregate Planning and Progress
Control
Slide 23
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Overview
• Aggregate Planning
– Definition and Philosophy
– Quantitative Analysis
• Progress Control
– Concept
– Methods
• MRP
• JIT
Slide 24
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Aggregate Planning (1)
• Definition - Production Planning using
Aggregated Information
– Define General Approach
– Feasibility Sought
• Philosophy
– Aggregated Data Displays Less Variation
than Individual Data Patterns
– Reduce Size/Complexity of Problem
• Decide to React Rather than Predict/Dictate
Slide 25
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Aggregate Planning (2)
Aggregation Procedures
– Determine Common Unit of Measure
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•
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•
Usually Labor and/or Machine Hours
Assumes Complete Substitutability of Resources
Balance Capacity (of Unit of Measure vs. Need)
“First Cut” Procedure to Determine Production
Strategy
• May or May Not Include Flow Time Analysis
Slide 26
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Aggregate Planning:
An LP Approach
• Linear Programming Approach
– Determine Aggregation Attribute
– Estimate Constraints, Resources
• Estimate Product Requirements/Timing
• Estimate Each Product’s Resource Requirements
• Define Availability of Resources
– In-House, SubContract, Breakdowns
• Set Operating Philosophy
– Backorders Allowed (0 – X %)
– Overtime/Contracting Allowed
Slide 27
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Examples of Parameters
• Capacity
– Available Hours on Production Centers less
Non-Working, less Set-Up, less Scrap
Production, Less Breakdowns @ Productivity
Level
– Available Hours Determined by Management
(2nd, 3rd Shifts, OT, etc.)
– Subcontracting Available
• Resource Requirements
– Labor/Machine Hours per Unit of Output via
BOM, Lead Times
– % Scrap, % Set-up Time (Batch Sizing)
Slide 28
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
LP Formulation
• Objective Equation
– Minimize Cost
• Production (Hire/Fire/Overtime/Subcontract)
• Inventory/Backorder Costs (Timing)
– Subject To (Constraints)
• Not Exceed Available Capacity
– Machine Routings Often Ignored/Lost in the
Aggregation (Labor Hours Used)
– Can Do by Machine/Process Type (Assumes
Detailed Sequence will be Manageable
• All Demand Met (Feasible Solution Exists)
Slide 29
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Dynamic Programming
Formulation
• Wagner-Whitin Algorithm (1960)
– Used for Batch Production
• High Set-up Costs
• Demand NOT Uniform over Year
– Each Period Evaluated
• Should Product be Made this Period (I.e., Should a
set-up cost be Incurred?)
• Balances Inventory Carrying Cost and Set-up Cost
• Once Optimal Sequence Established It is
Independent of Later Demand
– Basis of MRP Concept
Slide 30
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Aggregate Planning
Process
• Drawbacks
– Often only One Scenario Considered
– All Products Have Same
Backorder/Warehousing Costs,
Opportunities
– Little Sensitivity Analysis Performed
• Range of Demand
• Advantages
– Simple
– Errors Often Offset
Slide 31
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Aggregate Planning Drawbacks
Problems with LP Approach
– Illusion of Precision
• Precision Function of Estimates/Aggregation
– Definition of Period (Length)
– Flow Times/Batch Transition
– Resource Constraints
• Assumed May Not be Actual Constraint
– Abstraction of Reality
Slide 32
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Detailed Manufacturing
Release/Progress Control
• Disaggregation of Aggregate Plan
– Controls What Made and When
– Provides Guidance to Operating Personel
• Options
– Individual Products, Families (GT)
– Pre-Planned (Push) – MRP
– Dynamic, Real Time (Pull)
• Job Sequencing (Johnson’s Rule, Heuristics)
• JIT
Slide 33
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Manufacturing Release/
Progress Control Problems
• Aggregate Plan is Never Achievable
– Actual Demand Differing from Prediction
– Missed Delivery Dates (External)
• Suppliers
• Wrong Parts, Poor Quality
– Missed Delivery Dates (Internal)
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•
•
Slide 34
Breakdowns (Labor or Equipment)
Scrap
Priority Order Disruption
Bad Estimates of Production Time
Lack of Sufficient Skills
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Detailed Manufacturing
Planning
• Strategies to Deal with/
Eliminate/Reduce Variation
– Reduce Inherent Demand, Forecasting
Variation
– More Accurate Resource Requirements
– Accept Reasonable Variation (Range)
– Ignore in Planning, Empower Floor
Slide 35
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Variation During Production
• Strategies to Eliminate/Reduce
Variation
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Decoupling Line Using Buffer Inventories
Preventive Maintenance
Improved Supplier Relationships
Penalty Clauses for Missed Delivery
Minimize Priority Interrupts
• Strategies for “Handling” Variation
– Excess or Expand Capacity (OT)
– Material, Component Inventories
– Shop Floor Control Systems
Slide 36
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Variation in Delivery of
Product
• Sources of Variation
– Delivery Mechanism/Reliability
– Errors in Routing/Addressing
– Wait to Aggregate into Unit Load/Shipment
• Strategies to Eliminate/Reduce
Variation
– Quote FOB at Your Site
– Bring Delivery In-House
– Use More Reliable Transporter/Deliverer
Slide 37
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing
Planning and Control
Segment B Topic: Aggregate Planning
and Control
END OF SEGMENT
Lecture 9 Topic :
Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing
Planning and Control
Segment C Topic: Release and Progress
Control
Lecture 9 Topic :
Overview
• Releasing and Progress Control
• Manufacturing Requirements Planning
• Just in Time
• Toyota Production System
Slide 40
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Releasing Methods
• Machine/Cell Scheduling Rules vs. MRP
vs. JIT vs. Varying Production Hours
– Function of Type of Production
System/Products
• Job Shop => Machine/Cell (Job) Scheduling
• Batch => MRP or JIT
– Function of Demand Variation
• Mass Production => Few scheduling Decisions
– Vary Hours Facility Works
– Rebalance Facility, Output Rate
Slide 41
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Release/Progress Control
• MRP
– Centralized
– Automated (Computerized)
– Adjusted at Fixed Points in Time
(Recalculated)
– Key = Time Phased Plan
• JIT
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–
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–
Slide 42
Decentralized
Manual (Kanbans)
No Pre-calculation of Release Times/Dates
Key = Constant Demand, Kanban
Size/Number
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Material Requirements
Planning (1)
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•
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•
Determine Planning Period
Determine/Estimate Demand Per Period
Establish Bill of Materials (Gozinto)
Determine “Critical Path”
1
2
3
4
5
6
7
8
9
10
LEAD TIME
Slide 43
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Material Requirements
Planning (2)
11
10
9
4
6
3
8
7
2
5
1
1
Slide 44
2
3
4
5
6
Computer Integrated
Manufacturing Systems
7
8
9
10
© 2000 John W. Nazemetz
Material Requirements
Planning (3)
PRODUCT MADE
BEFORE WEEK 10
PRODUCT TO BE MADE
AND DELIVERED AFTER
PERIOD 10
1
Slide 45
2
3
4
5
6
Computer Integrated
Manufacturing Systems
7
8
9
10
© 2000 John W. Nazemetz
Just In Time (1)
• Use Parts as Needed
• When Kanban Empty, Send Upstream
• When Empty Kanban Received, Fill
Slide 46
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Just In Time (2)
• Key Calculations
– Number of Kanbans
– Size of Kanbans
• Key Parameters
– Set Up Time (Short or Use Signal Kanbans)
– Receipt Time (Short or Use Signal Kanban)
• Determine Using Linear Programming
Slide 47
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Analysis of Releasing and
Progress Control
• Push/Pull -- MRP vs. JIT
– Determining Factors
• Mixed Model Production System
• Period to Period Stability of Demand
– Low => JIT
– Higher => MRP
• Set-Up/Changeover Requirements, Lot Sizing
– Low => JIT
– Higher => MRP w.Wagner-Whitin
– Determine Sequencing
• Sequence Dependant Time/Cost
Slide 48
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Acknowledgement
• The illustrations on the following seven
(7) slides are taken from Singh,
Systems Approach to Computer
Integrated Design and Manufacturing,
John Wiley and Sons, New York, New
York, c1996. Pages 507, 511-4.
Slide 49
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
An Integrated GT and MRP
Framework
• Ham, et al
Slide 50
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (1)
Minimize Cost
Minimize Production Time
Balance Workloads
Slide 51
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (2)
Slide 52
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (3)
Slide 53
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (4)
Slide 54
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (5)
Slide 55
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
GT - MRP Example (6)
Slide 56
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Toyota Production System
• Philosophy
– Eliminate
• MUDA (Waste)
– Defects, Overproduction, Unneeded Processing,
Unneeded Conveyance, Excess Inventory,
Unneeded Motions, Delays
• MURA (Uneveness)
– Unbalanced Lines (Bottlenecks), Variation
• MURI (Overburdening of Resources)
– Provide Surge/Excess Capacity
Slide 57
Computer Integrated
Manufacturing Systems
© 2000 John W. Nazemetz
Advanced Manufacturing Systems
Design
© 2000 John W. Nazemetz
Manufacturing Planning
and Control
Discussion Topic C: Release and Progress
Control
END OF SEGMENT
Lecture 6 Topic: