Production Activity
Control
Chapter 5
MPC System with PAC
(VBW, figure 5.1)
Resource
planning
Detailed capacity
planning
Production
planning
Demand
management
Master production
scheduling
Front end
Detailed material
planning
Material and
capacity plans
Order release
Engine
Purchasing
Back end
Shop-floor
scheduling and
control (SFC)
Production
activity
control
Vendor scheduling
and follow-up
PAC Framework

PAC concerns execution of material plans, aided by
use of shop-floor computers, EDI, and the Internet.

Usual linkage is to MRP system.
• Shop-floor and vendor activities begin when an order is
•


released.
Feedback: status information and warning signals.
JIT may limit the need for most PAC activities.
Primary PAC objective is managing material flows
(JIT, material velocity); other objectives may include
efficient use of capacity.
PAC Responsibilities

Execution
• Scheduling
• Dispatching

Control
• Work order progress – move tickets
• Labor efficiency – labor tickets
• Quality – scrap/rework tickets
• Shop status – machine/tool tickets
Planning for Shop Order Release

Review planned orders
• Material availability
• Order quantity and due date
• Routing and tooling availability
• Capacity data and labor standards

Verify lead times

Authorization for release creates an open
shop order (scheduled receipt)
Planned Lead Time

Job order – setup time and run time

Work center – queue time

Material handling – wait time and move
time

Longer lead time leads to more jobs in
the system, which leads to longer queue
and more work-in-process inventory
Scheduling Focus

Scheduling individual jobs – need dates,
release dates, processing times, priority
adjustments, performance measures, etc.

Scheduling the shop – work-in-process,
average lead time, labor efficiency,
machine utilization, percent early/late, etc.
PAC Techniques

Basic shop-floor concepts:
• Essential inputs—routing and lead time data
(see figure 5.3)
• Queue/wait times often accounts for 80%+ of
total lead time.
• Operations setback chart—based on each part’s
lead times.
• Work center schedules—based on various
elements of lead-time elements
PAC Techniques

Gantt charts (or bar charts) – Figure 5.4
• Show a schedule based on lead time
assumptions (maybe omit queue, wait, and
move times)
• Often shown on a schedule board.
• Primary problem—updating.
• Computer systems can bring updating into
real-time and to the shop floor.
PAC Techniques

Priority sequencing rules: which job to run next
(usually determined as the current job is being
completed).
• Earliest operation due date.
• Earliest part due date.
• Order slack (based on all part data).
• Slack per operation (all part data).
• Critical ratio (time/work).
• Shortest operation time.

PAC creates a dispatch list that shows the priority
sequence for the work center.
PAC Techniques

Finite loading system—detailed schedule for
each work center based on work center capacity
and other scheduled jobs. (Will only schedule
work up to w/c capacity.)
• May conduct a simulation of each w/c for the
planning horizon
• May consider jobs coming from upstream w/c
as well as the current queue
• Matching parts may have inconsistent due date
PAC Techniques
Finite Loading (continued)

Vertical versus horizontal loading:
• Vertical—scheduling w/c job by job.
• Horizontal—scheduling jobs (by priority) across all
w/c’s.

Front versus back scheduling:
• Front—load an order as soon as w/c capacity was
•

available.
Back—load a job backward from its due date.
Optimized Production Technology (OPT) approach
may be used.
PAC Techniques

Vendor scheduling and follow-up
• Similar to SFC system, but customer demands
are managed by the vendor with its MPC
system.
• Schedule and priority changes must be sent to
the vendor, but may be contractual limits to the
amount of change allowed.
PAC Techniques

Lead time management.
• All elements except setup and run times (which
may only be 10-20% of total lead time) can be
compressed with a good PAC system.
• Lead time and WIP are directly related.
• Some WIP may be needed to ensure
capacity utilization—but not too much.
• System queue times are often over-stated.
Dispatch System


Create and maintain an open shop order for
each scheduled receipt.
Maintain a dispatch list.
• Basis for priority control
• Identify required resources, work units, work
contents

Perform status and audit reports
• Open order status
• Exception reports
Schedule Adjustments

Reschedule order release

Reschedule due date

Vary lost size

Relocate labor

Alternative equipment or routing

Overlap operations (move portion of lot)

Lot splitting
PAC Database


Relation to MPC system (see figure 5.9.)
•
•
•
•
•
Open shop orders with due dates.
Routing files.
Standard operations (run) time estimates.
Move, wait, and queue time data.
Work center information.
Data acquisition and feedback
•
•
•
•
Automate WIP data collection (bar coding).
Decentralized computer systems.
Base scheduling on real-time transactions
Integrate other systems (quality, maintenance,
CAD/CAM/CIM).
Concluding Principles




PAC system design must be in concert with the
firm’s needs.
The chop-floor control system should support
users and first-line supervisors, not supplant
them.
Vendor capacities should be planned and
scheduled with as much diligence as are internal
capacities.
Lead times are to be managed.
Concluding Principles

Organizational goals and incentives must be
congruent with good PAC practice.

Discretion and decision-making responsibilities in
PAC practice need to be carefully defined for both
shop and vendors.

PAC performance should be defined and
monitored.

Feedback from PAC should provide early warning
and status information to other PAC modules.
Concluding Principles

Automated reading systems and and distributed
computers should facilitate data acquisition and
shop-floor decision making.

Database design and integrity must be assessed
for PAC systems to be effective.

The ongoing evolution in PAC systems as firms
increasingly adopt world class manufacturing
methods is reduced detail, smaller databases,
and simpler systems.
Chapter 5 Assignments

Problems 5.2 and 5.12

Due Tuesday, November 12