Capacity Requirement Planning

1
Capacity Requirement Planning
2
Defining Capacity

• Capacity is the amount of work that can be done
  in a period of time
• It is usually stated in standard hours of work
• It must be determined at plant, department, and
  work center levels.

3
Capacity Planning Process

• Determine the capacity available
• Translate the released and planned orders into
  capacity required
• Sum up capacities required for each work center
• Resolve differences between available capacity
  and required capacity

4
Determining Capacity Available

• Capacity available is the capability of a system
  or resource to produce a quantity of output in a
  particular time period.
• Available (theoretical) capacity can be
  calculated or measured
• To calculate available capacity, one needs to
  know
• Available time
• Utilization
• Efficiency

5
Capacity Measurements

• Theoretical capacity
• Demonstrated capacity
• Calculated capacity

6
Utilization and Efficiency
Actual Hours
Charged Utilization
Scheduled Available Hours
Standard Hours Earned Efficiency
Actual Hours Charged
7
Rated Capacity

• Rated Capacity Available time x Utilization x
  Efficiency

8
Load Sources

• Open Orders
• MRP - Planned Order Releases
• Other Sources
• Rework
• Excess scrap
• Quality problems

9
Routing Data

• Operation identification code
• Operation description
• Planned work center
• Standard setup time
• Standard run time per unit
• Tooling requirements

10
Lead-Time Elements

• Queue
• time waiting before operation begins
• Setup
• time getting ready for operation
• Run
• time performing operation
• Wait
• time waiting after operation ends
• Move
• time physically moving between operations

11
Adjustments to Capacity or Load

• Increasing Capacity
• Add extra shifts
• Schedule overtime or weekends
• Add equipment and/or personnel
• Reducing Load
• Subcontract work to outside suppliers
• Reduce lot sizes
• Hold work in production control
• Reduce the MPS
• Reducing Capacity
• Eliminate shifts or reduce length of shifts
  worked
• Reassign personnel temporarily

12
Continued

• Increasing Load
• Make items normally purchased or subcontracted
• Release orders early
• Increase lot sizes
• Increase the MPS
• Redistributing the Load
• Use alternate work centers
• Use alternate routings
• Adjust operation start dates forward or backward
  in time
• Revise the MPS

13
Production Activity Control
14
Objectives of PAC

• Execute the MPS and MRP
• Optimize use of resources
• Minimize work in process
• Maintain customer service

15
PAC Functions

• Plan
• Ensure resources available
• Schedule start and completion dates
• Execute
• Gather relevant shop order information
• Release shop orders
• Control
• Establish and maintain order priority
• Track actual performance
• Monitor and control WIP, lead times, and queues
• Report work center performance

16
Data Requirements

• What and how many to produce?
• When parts are needed?
• What operations are needed?
• How much time operations will take?
• How much capacity is available at each work
  center?

17
Scheduling

• Objectives
• Meet delivery dates
• Effectively use manufacturing resources
• Involves
• Establishing start and finish dates for each
  operation needed to complete an order

18
Scheduling and Loading Techniques

• Forward scheduling
• Activity starts as soon as the order is received
  .regardless of due date
• Backward scheduling
• Activities are scheduled back from the due date
• Infinite loading
• Assumes capacity is infinite at any work center
• Finite loading
• Assumes there is a definite limit to capacity at
  any work center

19
Bottlenecks Management

• Bottlenecks control the throughput of all
  products processed by them
• Work centers feeding bottlenecks should be
  scheduled at the rate the bottlenecks can process
• A time buffer inventory should be established
  before the bottleneck
• Work centers fed by the bottleneck have their
  throughput controlled by the bottleneck

20
Input/Output Analysis
21
Input, Output, Queue, and Capacity
Input Input Input
Queue
Capacity
22
Actual Output Less Than Planned Output
Input Input Input
Not enough input? Queues and lead times
increase Insufficient Capacity?
Queue
Capacity
23
Actual Input Less Than Planned Output
Input Input Input
Feeding work centers behind schedule Work
released late Late orders
Queue
May run out of work
Capacity
24
Actual Output Greater Than Planned Output
Input Input Input
Queue
Excess Capacity
May run out of work
Capacity
25
Actual Input Greater Than Planned Input
Input Input Input
Queue
Feeding work centers ahead of schedule Work
released early Queues and lead times will
increase
Capacity
26
Actual Output Less than Actual Input
Input Input Input
Queue
Preceding work centers ahead Releases early
Queues and lead times increase Not enough
capacity?
Capacity
27
Actual Output greater Than Actual Input
Input Input Input
Feeding centers behind Releases late Idle
capacity Late orders
Queue
May run out of work
Capacity