INTEGRATIVE MANUFACTURING PLANNING AND CONTROL SYSTEMS

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INTEGRATIVE MANUFACTURING PLANNING AND CONTROL
SYSTEMS

• ME 445INTEGRATED MANUFACTURING SYSTEMS

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MANUFACTURING PLANNING AND CONTROL SYSTEM

• The primary objective of an manufacturing
  planning and control system (MPCS) in any
  organization is to ensure that the desired
  products are manufactured
• at the right time,
• in the right quantities,
• meeting quality specifications, and
• at minimum cost.

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The manufacturing planning and control system
(MPCS) in a company is achieved by integrating
the activities as

• determining product demand,
• translating product demand into feasible
  manufacturing plans,
• establishing detailed planning of material flows,
• capacity to support the overall manufacturing
  plans, and
• helping to execute these plans by such actions as
• detailed cell scheduling
• purchasing

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The benefits achieved through the use of
integrated MPCS are

• reduced inventories
• reduced capacity
• reduced labor costs
• reduced overtime costs
• shorter manufacturing lead time
• faster responsiveness to internal and external
  changes as
• machine and other equipment failure
• product mix
• demand changes
• etc.

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The major elements of a integrated MPCS are

• Demand management
• Aggregate production planning
• Master production scheduling
• Rough-cut capacity planning
• Material requirement planning
• Capacity planning
• Order release
• Shop floor scheduling and control

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A Basic Frame Work of MPCS
Customer Orders
Demand Management
Aggregate Production Plannig
Engineering Design
Master Production Schedule
Engineering Changes
Rough-Cut Capacity Planning
Material Requirement Planning
Bill of Materials
Inventory Management
Detailed Capacity Planning
Process Planning
Shop-Floor Control
Purchasing
Vendors
Finished Products
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DEMAND MANAGEMENT

• Demand for products is the driving force for any
  production activity.
• Demand management is therefore an important input
  to production planning.

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• Demand management contains activities as
• demand forecasting
• order transaction entry
• customer-contact activities
• physical distribution management

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• Demand forecasting
• Forecasting is concerned with estimating future
  demand ( or requirement) for products.
• Forecasting is necessary for production planning.

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• There are three approaches to forecasting
• The qualitative approach
• The explanatory approach
• The descriptive approach

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• 1. Qualitative approaches rely on the opinion of
  experts to predict certain events of interest.
• Example What kind of technological
  breakthroughs are possible in the field of
  personal computers by the year 2020?
• There are some prediction techniques for long
  range planning, like, 5, 10, 15 or 20 years.

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• 2. Econometric models are example for
  explanatory approaches. Causal relationship is
  an important aspect of this approach.
• Example Growth in economic activity increases
  employment, which in turn increases the buying
  power of the people, which in turn increases the
  demand.
• Econometric models have been used successfully
  for planning and resource allocations for
  national economies.

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• 3. Descriptive approaches to forecasting include
  statistical models.
• The basic assumption in these approaches is that
  the underlying demand-generating process is an
  extension of its past performance into the near
  term future. Planning horizon normally varies
  from months to a year.
• The demand history in the form of time series
  is used to predict the future.

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• Moving average
• A simple time series model may be
• xt a0 et a0 constant (average
• value)
• et a random variable with zero mean and
  variance of st2 (error)
• xt demand observations through
  period t (t 1, 2, .., T)

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The forecast for any future period considering
only N recent observations is given by

• Mt average of the most recent N observation

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EXAMPLE

• In the last 7 days the demand for spark plugs
  (in boxes) for four cylinder cars was
• x120, x226, x319, x424, x523, x621, x728.
  
• Each box contain 250 spark plugs. Develop a
  forecast for the 8th day.

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The 7-day moving average is
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The forecast for the next day is
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Now suppose the actual demand for the 8th day is
34 then x1 is dropped and x8 is added to obtain
the new moving average. Accordingly,
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Therefore, the forecast for the next day is
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Exponential smoothing

• In exponential smoothing more weight is attached
  to the recent data and the weight decreases with
  the age of the old data.

where xT the actual demand for period
T ST smoothed statistic for period T ST-1
average of the demand of the first (T-1)
period a weight (usually between 0.1 and 0.3)
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EXAMPLE

• ABC Company manufactures a large variety of
  high-pressure steel cylinders for its domestic
  and defense market.
• ABC wishes to forecast the number of cylinders
  per week for one of their recent product.
• The data is as follows

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Forecast the demand for the 11th week using
exponential smoothing by using a 0.2
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• Auto Regressive (AR) models
• AR(m) model
• xt f1 xt-1 f1 xt-2 fn xt-m at
• AR(1) model
• xt f1 xt-1 at
• Model for IBM stocks (random walk)
• xt 0.999 xt-1 at

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Auto Regressive Moving Average (ARMA) Models

• ARMA(m,n)
• xt f1 xt-1 f1 xt-2 fn xt-m at
• q1at-1 -q2 at-2 -- qn at-n
• ARMA(2,1)
• xt f1 xt-1 f1 xt-2 at - q1at-1

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AGGREGATE PRODUCTION PLANNING

• In a high-variety, discrete manufacturing
  environment, demand for product may fluctuate
  considerably.
• On the other end, the resources of the company
  (number of machines, number of workers, etc.)
  remain constant during the planning horizon
  (normally 12 months).
• The best approach to obtain feasible solutions
  is to aggregate the information being processed.

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• For aggregation purposes the product demand
  should be expressed in a common measurement unit
  such as production hours.
• Production planning is concerned primarily with
  determining optimal production, inventory, and
  work force levels to meet demand fluctuation.

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• Basic strategies to absorb the demand
  fluctuations are
• Maintain uniform production rate and absorb
  demand fluctuations.
• Maintain work force but change the production
  rate by permitting planned overtime, idle time
  and subcontracting.
• Change the production rate by changing the size
  of the work force through planned hiring and
  layoffs.
• Explore the possibility of planned backlogs if
  customers are willing to accept delays in
  delivery of products .
• A suitable combination of these strategies should
  be explored to develop an optimal aggregate
  production plan.

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EXAMPLEData on the expected aggregated sales of
three products, A, B, and C, over planning
horizon of six 4-week periods are as follows
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Data on the aggregate demand forecast in
cell-hours is given in the table below
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• The company has developed machining cell-hours
  as a common unit for aggregation purposes.
• Product A 2 cell-hours/unit
• Product B 2 cell-hours/unit
• Product C 1 cell-hours/unit
• The company has the regular production capacity
  of 300 units/period.
• Overtime is allowed up to 60 units/period.
• Requirements exceeding overtime capacity may be
  satisfied by subcontracting.

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• Two alternative production policies are
  developed as follows
• PLAN 1 Produce at the constant rate
• of 350 units/period for the
• entire planning horizon
• PLAN 2 Produce at the rate of 400
• units/period for the first 4 periods and
  then at the rate of 250 units/period for the
  subsequent periods.
• Analyze these two aggregate production plans.

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PLAN 1 Uniform Regular Production Rate Policy
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PLAN 2 Varying Regular Production Rate Policy
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MASTER PRODUCTION SCHEDULE

• The primary use of an aggregate production plan
  is to level the production schedule so that the
  production costs are minimized.
• However, the output of an aggregate plan does
  not indicate individual product. This means that
  the aggregated plan must be disaggregated into
  individual product. The result of such a
  disaggregation methodologies is what is known as
  master production schedule.

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• Master production schedule does not present an
  executable manufacturing plan. Because the
  capacities and the inventories have not been
  considered in this stage.
• Therefore, further analysis for the material and
  capacity requirements is required to develop an
  executable manufacturing plan.

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ROUGH-CUT CAPACITY PLAN

• The objective of rough-cut capacity planning is
  to ensure that the master production schedule is
  feasible.
• For each product family the average amount of
  work needed and key work centers unit can be
  calculated from each items bill of materials and
  from production routings (process planning
  sheets).

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EXAMPLE

• Consider two families of steel cylinders and the
  resource profile developed in standard hours of
  resources per 200 units of end-product family as
  follows

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• The available resources are compared with the
  resource requirements profile obtained for all
  the work centers considering all the product
  families.
• If the available resources are less than
  required, then decisions related to overtime,
  subcontracting, hiring workers must be made.

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MATERIAL REQUIREMENTS PLANNING

• The material requirements planning system is
  essentially an information system consisting of
  logical procedure for managing inventories of
  component assemblies, subassemblies, parts, and
  raw materials in a manufacturing environment.
• The primary objective of an MRP system is to
  determine how many of each item in the bill of
  materials must be manufactured or purchased and
  when.

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• The key concept used in determining material
  requirements are
• Product structure and bill of materials
• Independent versus dependent demand
• Parts explosion
• Gross requirement
• Common-use items
• Scheduled receipts
• On-hand inventories
• Net requirements
• Plant order releases
• Lead time

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Product structure and Bill of Materials

• Product is the single most important identity in
  an organization. A product may be made from one
  or more assemblies, subassemblies and components.
  
• A bill of material is an engineering document
  that specifies that the components and
  subassemblies required to make each end item
  (product).

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EXAMPLE
E1 End item
Level 0 (end item)
S1 (1)
S2 (2)
Level 1 (subassemblies)
C1 (1)
C2 (2)
C3 (2)
C4 (3)
C5 (1)
Level 2 (components)
Material M1 (1)
Material M2 (1)
Material M3 (2)
Material M4 (2)
Material M5 (1)
Level 3 (raw materials and other components)
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Independent versus Dependent Demand

• The demand for the end item originates from
  customer order and forecasts.
• Such a demand for end items and spare parts is
  called independent demand. The demand by a parent
  item for its components is called dependent
  demand.

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EXAMPLE

• X independent demand (number of end item)
• Y number of components for each end item
• XY dependent demand (number of subassembly
  demanded)

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Parts Explosion

• The process of determining gross requirements
  for component items, that is requirements for the
  subassemblies, components, and raw materials for
  a given number of end-item units is known as
  parts explosion.
• Part explosion represents the explosion of
  parents into their components.

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Gross Requirements of Component Items

• Gross requirement of component items is the
  total number of component items required to
  manufacture the end products. Gross requirement
  of component items is computed by using the
  information from the product information and the
  bill of materials.

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EXAMPLE

• If the demand for end-item E1 is 50, determine
  the gross requirements for the item components.

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Level 0 (end item)
E1 End item
Level 1 (subassemblies)
S1 (1)
S2 (2)
C1 (1)
C2 (2)
C3 (2)
C4 (3)
C5 (1)
Level 2 (components)
Material M1 (1)
Material M2 (1)
Material M3 (2)
Material M4 (2)
Material M5 (1)
Level 3 (raw materials and other components)
Demand of S1 1 x demand of E1 50 units Demand
of S2 2 x demand of E1 100 units Demand of C1
1 x demand of S1 50 units Demand of C2 2 x
demand of S1 100 units Demand of C3 2 x
demand of S2 200 units Demand of C4 3 x
demand of S2 300 units Demand of C5 1 x
demand of S2 100 units
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Common-Use Items

• They are the component items which are used
  different subassemblies of different
  end-products. These items must be added to have
  more economic purchasing.

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On-Hand Inventory, Scheduled Receipts, and Net
Requirements

• On-hand inventory is the available items in
  stock from the previous period.
• Scheduled receipt is the items already been
  ordered but not been received from the vendors
  yet.
• Net requirements is found by subtracting the
  on-hand inventory and scheduled receipts from the
  gross requirements.

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Planned Order Release

• Planned order releases refer to the process of
  releasing a lot of every component item for
  production or purchase. Determination of lot size
  is an economic issue. The trade off is between
  the inventory holding costs and the set up costs.
• Lot sizes in MRP system are determined for
  component items for each stage sequentially
  starting with level 1, then level 2 and so on.

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Lead Time and Lead Time Offsetting

• The lead time is the time it takes to produce or
  to purchase a part.
• The lead time depends on
• setup time
• production time
• lot size
• sequence of machines on which operations are
  performed
• queuing delays
• The purchasing lead time is the time between
  placing an order with a vendor and receipt of the
  order.
• The manufacture or purchase of component items
  must be offset by at least their lead times to
  ensure availability of these items for assembly
  into their parent items at the desired time.

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EXAMPLE
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Economic Order Quantity

• In order to balance the costs of keeping the
  items in inventory and the costs of setup, the
  concept of Economic Order Quantity (EOQ) is
  introduced.
• Normally, the ordering policy is set as
  displayed below, where the demand is fairly
  constant

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Economic Order Quantity
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• Based on this kind of inventory policy, the total
  annual inventory cost may be written as

Where TIC total annual inventory
cost (/year) Q order quantity
(pieces/order) Ch holding cost
(/piece/year) Csu cost of setup (/setup or
/order) Da annual demand (pieces /year) Da/Q
number of orders per year (batches of parts
produced per year)
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• The holding cost Ch is generally taken to be
  directly proportional to the value of the item
  that is,
• Ch h Cp
• where
• Cp cost per piece (/piece)
• h annual holding cost rate(year-1)

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• The setup cost Csu includes the cost of idle
  production equipment during the changeover time
  between batches, as well as whatever labor costs
  are involved in the setup changes. Thus,
• Csu Tsu Cdt
• where
• Tsu setup or changeover time between
  batches, (hr)
• Cdt cost rate of machine downtime, (/hr)

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• In cases where parts are ordered from an outside
  vendor, the price quoted by the vendor usually
  includes a setup cost, either directly or in the
  form of quantity discounts.
• Cdt should also include the internal costs of
  placing the order to the vendor.
• If the cost of production of a part is Cp ,
  then, the annual cost of part production will be
  DaCp.

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• Then, the annual total cost is

By taking the derivative of both sides, we obtain
the economic order quantity (EOQ) formula, which
minimizes the sum of carrying costs and setup
costs
where EOQ economic order quantity
(number of parts that should be produced
in the batch)
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EXAMPLE

• Annual demand rate is 12,000 units. One unit of
  product costs 10.00 and the holding cost rate is
  24/year. Setting up to produce a batch of
  products requires changeover of equipment, which
  takes 4 hr. The cost of equipment downtime plus
  labor is 100/hr.
• Determine the economic order quantity and the
  total inventory costs for this case.

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Solution

• Setup cost
• Csu 4 x 100 400
• Holding cost per unit
• Ch 0.24 x I0.00 2.40
• Using these values and the annual demand rate in
  the EOQ formula, we have

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• Total inventory costs are given by the TIC
  equation

The annual total production costs TC 12,000
x 10 4800 124,800
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CAPACITY PLANNING

• The output of MRP does not produce an executable
  manufacturing plan, because it contains material
  requirement information only but does not contain
  information about the manufacturing capacity of
  the plant.

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• To develop an executable manufacturing plan, it
  is essential to establish the feasibility of the
  planned order releases obtained from the MRP
  system.

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• Capacity planning is concerned with ensuring the
  feasibility of production plans by determining
  resources such as labor and equipment with a view
  to developing what is known as an executable
  manufacturing plan.

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• The process of capacity planning is complex and
  involves a number of decisions
• Exploring overtime/multiple shifts/subcontracting
  options
• Developing alternative process plans for
  effective resource utilization
• Splitting lots
• Increasing or decreasing employment levels to
  respond to capacity changes
• Inventory options
• Increasing capacity by adding capital equipment
  such as machine tools

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ORDER RELEASE

• Once an executable manufacturing plans are
  obtained, the orders are released to the shop
  floor.
• Order release documents should include
• Material inventories allocated to the order.
• Routing sheets having information on
• operation sequences,
• machines,
• work centers,
• tool and fixture allocations,
• batch sizes,
• standard machine time allowed for each operation,
  etc.
• Appropriate shop floor records such as cards,
  move cards, and part lists for assembly jobs.

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• The order release triggers a number of
  activities at the shop floor
• Scheduling of job orders on the work centers.
• Sequencing of jobs on a work center.
• Allocation of jigs and fixture.
• Loading of work centers considering optimal
  cutting conditions (cutting speeds, feed rates,
  depth of cuts).
• Coordination of material handling, storage,
  warehousing, and machine tools.

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SHOP FLOOR CONTROL

• When the planned orders are released to the shop
  floor for manufacturing, the primary objective is
  to deliver the product
• at the right time,
• in the right quantities,
• meeting quality specifications.
• But some unexpected event (machine breakdown for
  example) may cause delays.
• In order to take action (changing the scheduling
  for example), the up to date information from the
  shop floor must be send to the management a fast
  and a steady manner.

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• A number of methods are used for data collection
  in industries, such as
• Hand written reports.
• Manual data entry terminals.
• Bar code readers and sensors such as optical and
  magnetic reading devices that automatically
  update an items progress through the shop floor.
• Voice data entry system.

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• The major functions of a shop-floor control
  system are
• to schedule job orders on the work centers,
• to sequence the jobs in order on a work center,
• to provide accurate and timely order status
  information.

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• The work order status information includes
• order batch sizes
• job completion
• remaining jobs and operations
• The work order status information is used
• To monitor the progress of manufacturing
  activities.
• To determine priorities for scheduling jobs in
  the shop in response to changes in job order
  status.
• To maintain and control work in process.
• To provide output data for capacity control
  purposes.

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Operation scheduling

• There are two major activities to be performed
  when work orders are released to the shop floor
• The work orders are assigned to the work centers
  such that due dates are satisfied. Allocation of
  jobs to work centers is referred to as machine
  loading.
• The sequence of each work order through each work
  center is determined. This process is referred to
  as job sequencing.

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• The objectives of operation scheduling are
• Meeting due dates.
• Minimizing manufacturing throughput time.
• Minimizing work-in-process.
• Maximizing work center utilization.

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• To achieve these objectives may be conflicting
  sometimes.
• For example if we add extra machining centers
• Meeting due dates improves
• Minimizing manufacturing throughput time improves
• Minimizing work-in-process improves
• Maximizing work center utilization get worse

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• The loading time is calculated as
• Loading time setup time Q unit run time
• The average manufacturing throughput time (MTT)
  is calculated as
• MTT setup time Q unit run time move and
  queue time

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EXAMPLE
Develop a detailed scheduling and loading plan.
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Job Sequencing and Priority Rules

• Normally, the total number of jobs exceed the
  number of work centers. Therefore, priority rules
  should be develop to determine the sequencing of
  machining operations.

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• Some of the simple rules used in industry are
• 1. First-come, first served (FCFS) rule assign
  jobs on a first-come, first- served bases.
• This rule is blind with respect to all other
  information such as due date and urgent jobs.

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• 2. Shortest processing time (SPT) rule gives the
  highest priority to the job with the shortest
  processing time.
• This rule results in the shortest manufacturing
  lead time, therefore, lowest work-in process
  inventory.

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• 3. Earliest due date (EDD) rule gives the highest
  priority to jobs with the earliest due date.

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• 4. Least slack (LS) rule assign the highest
  priority to the job with least slack.
• The slack is defined as
• Slack time remaining until due date -
  process time remaining

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• 5. Least slack per operation (LSPO) rule assigns
  priority based on the smallest value obtained by
  dividing the slack by the number of number
  remaining operations.

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• 6. Critical ratio (CR) rule assigns priority
  based on index defined as follows

where Time remaining until due date due date
- now Lead time setup run move queue
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• The least slack, least slack per operation,
  critical ratio, and earliest due date rules
  consider the relative urgency of the jobs.

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EXAMPLE Today is 10
First-come, first-served (FCFS) rule Sequence
A, B, C, D. Shortest processing time (SPT)
rule Sequence A, C, D, B. Earliest due date
(EDD) rule Sequence A, D, C, B.
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• Least slack (LS) rule
• Slack time remaining until due date -
  process time remaining
• Slack for A (17 - 10) - 4 3 days
• Slack for B (29 - 10) - 18 1 days
• Slack for C (27 - 10) 8 9 days
• Slack for D (26 - 10) - 12 4 days
• Sequence B, A, D, C.

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• Least slack per operation (LSPO) rule
• LSPO for A 3/8 0.375
• LSPO for B 1/18 0.055
• LSPO for C 9/16 0.5625
• LSPO for D 4/2 2
• Sequence B, A, C, D.

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• Critical ratio (CR) rule

CR for A (17 - 10)/4 1.75 CR for B (29 -
10)/18 1.05 CR for C (27 - 10)/8 2.125 CR
for D (26 - 10)/12 1.33 Sequence B, D, A, C.
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JUST IN-TIME PRODUCTION

• Just-in-time (JIT) is an approach to production
  that was developed in Japan to minimize
  inventories.

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DefinitionJust-in-time (JIT) manufacturing is a
Japanese management philosophy applied in
manufacturing which involves having the right
items of the right quality and quantity in the
right place and at the right time.
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• Inventory ties up investment funds and takes up
  space.
• To reduce this form of waste, the JIT approach
  includes a number of principles and procedures
  aimed at reducing inventories, either directly or
  indirectly.
• Indeed, the scope of JIT is so broad that it is
  often referred to as a philosophy.

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• Just-in-time procedures have proved most
  effective in high-volume repetitive
  manufacturing, such as the automobile industry.
• The potential for in-process inventory
  accumulation in this type of manufacturing is
  significant because both the quantities of
  products and the number of components per product
  are large.

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• Just-in-time system produces exactly the right
  number of each component required to satisfy the
  next operation in the manufacturing sequence just
  when that component is needed just-in-time.

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• To the Japanese, the ideal batch size is one
  part. As a practical matter, more than one part
  are produced at a time, but the batch size is
  kept small. Under JIT, producing too many units
  is to be avoided as much as producing too few
  units.
• This is a production discipline that contrasts
  sharply with traditional U.S. practice, which has
  promoted use of large in-process inventories to
  deal with problems such as machine breakdowns,
  defective components, and other obstacles to
  smooth production.
• The U.S. approach might be described as a
  just-in-case philosophy.

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• Although the principal aim in JIT is inventory
  reduction, this cannot simply be achieved.
  Several requisites must be pursued to make it
  possible.
• These include
• stable production schedules,
• small batch sizes and short setup times,
• on-time delivery,
• defect-free components and materials,
• reliable production equipment,
• pull system of production control,
• a work force that is capable, committed, and
  cooperative, and
• a dependable supplier base.

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• Stable Schedule
• For JIT to be successful, work must flow
  smoothly with minimum perturbations from normal
  operations. Perturbations require changes in
  operating procedures
• increases and decreases in production rate,
• unscheduled setups,
• variations from the regular work routine, and
  other exceptions.

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• Small Batch Sizes and Setup Reduction Another
  requirement for minimizing inventories is small
  batch sizes and short setup times.

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• Some approaches used to reduce setup time
  include
• perform as much of the setup as possible while
  the previous job is still running
• use quick-acting clamping devices instead of
  bolts and nuts
• eliminate or minimize adjustments in the setup
  and
• use group technology and cellular manufacturing
  so that similar part styles are produced on the
  same equipment.

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• For the success of JIT production
• On-time Delivery
• Zero Defects
• Reliable Equipment
• must be established

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Pull System of Production Control
Process 1
Process 2
Process 3
A push system
Process 1
Process 2
Process 3
A pull system

• JIT requires a pull system of production control
  
• MRP is a push system.

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JUST IN TIME PHILOSOPHY

• PULL SYSTEM
• - ONLY WHAT IS NEEDED IN THE NEXT STAGE OF
  PRODUCTION IS PRODUCED.

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• One famous pull system is the Kanban system used
  by Toyota, the Japanese automobile company.
• Kanban (pronounced kahn-bahn) is a Japanese word
  meaning card. The Kanban system of production
  control is based on the use of cards to authorize
  production and work flow in the plant.

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• There are two types of kanbans
• production kanbans and
• transport kanbans
• A production kanban authorizes production of a
  batch of parts. The parts are placed in a
  container, so the batch must consist of just
  enough parts to fill the container. Production of
  additional parts is not permitted.
• The transport kanban authorizes movement of the
  container of parts to the next station in the
  sequence.

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QUALITY ASSURANCE

• Quality is maintained in two ways
• each worker monitors his or her work and
• periodic inspections are performed by individuals
  from the quality control function.

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• Inspection is necessary at several places in the
  manufacturing process, including
• Inspection of raw materials
• Inspection of manufactured product
• Preprocess
• In-process
• Post process

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• Inspection of production process
• parameters
• Tools
• Fixtures
• Production machinery
• Verification/calibration
• Inspection fixtures
• Inspection gauges
• Inspection machinery

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• Ideally, suppliers should provide good products.
  
• If the receiving firm can depend on the quality
  of the materials, quality assurance will not have
  to inspect incoming product.

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• If inspection is required, statistical sampling
  techniques are often used.
• These procedures are called acceptance sampling
  and are based on the premise that a random sample
  drawn from a batch is representative of the
  entire batch.
• Thus, only the sample is inspected in
  determining the quality of the entire batch.

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• In many companies where the production of
  high-quality parts is the company policy, workers
  inspect the parts during the production process
  to ensure that the process is under control.

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• Some operations involve 100 inspection and some
  use random samples.
• Statistical process control (SPC) charts may be
  used to assist in monitoring the production
  process.

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CONTROL CHART
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• In recent years there has been growing
  recognition of the value of SPC charts, since
• 1. Control charts are a proven technique for
  improving productivity.
• A successful control chart program reduces scrap
  and rework, which are primary productivity
  killers in any operation.
• If scrap and rework are reduced
• productivity increases,
• cost decreases, and
• production capacity (measured as the number of
  conforming parts per time period) increases.

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• 2. Control charts are effective in preventing
  nonconformity.
• The control chart helps keep the process in
  control, which is consistent with the do it
  right the first time philosophy.
• It is rarely cheaper to sort out good units from
  bad ones later on than it is to build them
  correctly in the first place.
• If there is no effective process control,
  operators are being paid to make non-conforming
  product.

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• 3.Control charts prevent unnecessary process
  adjustments.
• A control chart can distinguish between
  background noise and abnormal variation no other
  device, including a human operator, is as
  effective in making this distinction.

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• 4.Control charts provide diagnostic information.
• Frequently, the pattern of points on the control
  chart will contain information of diagnostic
  value to an experienced operator or engineer.
• This information allows the implementation of a
  change that improves the performance of a process.

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• 5. Control charts provide information about
  process capability.
• The control chart provides information about the
  value of important process parameters and their
  stability over time. This allows an estimate of
  process capability to be made.
• Since quality is an extremely important
  consideration in global competitive markets, it
  is easy to understand why SPC and control charts
  are being implemented by many firms.

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