Production Planning and Control

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Session 15 PPC in Pull Production Lecture delivered by: Vijaya Kumar S Kumar. Asst. Professor MSRSAS. MSRSAS S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 1 PEMP EMM2517 Session Objectives At the end of the session the delegate would have understood: ? Requirements of PPS in a Pull System. g y p ? How to design a new PPS system or adapt an existing planning system to a Pull environment. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 2 PEMP Push & Pull Systems EMM2517 • What is a Push system of production?

In a traditional setup execution of a sales demand is setup, achieved by the use of work orders, which authorize the release for manufacturing in lot sizes, pre-decided, g ,p , and subsequent assembly. This system is referred to as push systems, since each work order is tracked and pushed through a series of work centers. Results in excessive inventory between work centers. In I a pull system all work centers are activated only ll ll k i d l when there is a withdrawal/consumption. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 3 PEMP EMM2517 Push & Pull Comparison p sales mps final M R P f 4 Info matl s ka ub fab S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore PEMP EMM2517 Continued • Pull production system is also called JIT production OR stockless production. p • Though this system will help in reduction of WIP, it is not possible to produce with no in-process inventory. Some inventory must be held in the buffers • Other conditions for pull production are: • More responsibility for short term planning & control must be with shop supervisors/workers. • Everywhere reduction of inventory & Production=Demand must be practiced. M. S Ramaiah School of Advanced Studies – Bangalore 5 S. Vijaya Kumar, MSRSAS PEMP EMM2517

Continued Minimum b/downs by PM & TPM. Total quality assurance by prevention. Setup times must be small Layout must facilitate linking of operations and smooth flow/as balanced a cap as possible. • Leveled production schedules • Cooperative team work must be built. working. • Kaizen must be a way of working S. Vijaya Kumar, MSRSAS • • • • M. S Ramaiah School of Advanced Studies – Bangalore 6 Manufacturing Planning and Control System Resource planning Production planning Demand mgt PEMP EMM2517 MPS Detailed Cap plan Detailed Matl plan Matl and cap plans Shop-floor system Vendor system M. S Ramaiah School of Advanced Studies – Bangalore

Front end Engine S. Vijaya Kumar, MSRSAS Back end 7 PEMP EMM2517 Constituents of a PPS in Pull • Having understood the basics of Pull Systems ,PP&C for a Pull environment is divided into centralized & de-centralized de centralized components. • Push system depend on MRP type system for long range decisions which are definitely required in a pull scenario also • Centralized part of the system performs Order entry demand forecasting, RCCP,MPS MRP. forecasting RCCP MPS & MRP • See the links with Plant/process improvement during RCCP • Level MPS in a dynamic manner, daily production schedules y , yp to the final stage with corrections. balanced between customer demand and need of leveling them. ) S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 8 PEMP EMM2517 Continued • Centralized Manufacturing Control Central control system Information flow Manufacturing facilities g Control is from above. There is an attempt to determine / plan. Work load of individual m/cs. So massive data collection Updating are required S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 9 PEMP Continued • Distributed manufacturing control. Simple manu control system EMM2517 Info flow Product cell Product cell Product cell Product cell

Different, detailed local control systems S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 10 PEMP Continued EMM2517 S. Vijaya Kumar, MSRSAS • Decentralized system is basically a shop-floor based system. • The role starts from studying the pre-plan MPS and confirm its y g p p do-ability. With exception of the final stage every other dept and work cell is responsible for its own schedule and execution of work. work Necessary schedule changes due to shop exigencies are handled by supervisor/worker teams. • The shops send to the centralized system frequent updated info about production rates, setup times, uptimes etc. Even in traditional systems this does happen but there is an informality and spontaneity whereas here supervisors and spontaneity, workers are trained to be competent to schedule and control work and are trained in formal shop schedule techniques for pull, like Kanban, etc. M. S Ramaiah School of Advanced Studies – Bangalore 11 PEMP EMM2517 More Details • Let us study both systems in more detail: • C Centralized planning & control system li d l i l Three main functions are – monthly planning of MPS, daily d il schedule of fi l production stage, material h d l f final d ti t t i l forecasting & procurement.

Planning MPS is divided into 2 periods – MPS for future periods & MPS for shop-floor planning. Both are shown in the next slide. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 12 PEMP EMM2517 Continued • The constituents are; • MPS for f t re periods & MPS for shop floor future shop-floor planning • Daily scheduling Scheduling to time bucket of 1 day, Integrating recent demand information Daily order alterations information, alterations. • Material procurement forecast Kanban link MRP supplier link link, S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 13 PEMP EMM2517

Continued • Monthly Planning Process M+n M+ flex M+3 M+2 M+1 Current wk S. Vijaya Kumar, MSRSAS w+1 w+2 +1 +2 fixed w+3 +3 Current Mth M 14 M. S Ramaiah School of Advanced Studies – Bangalore PEMP EMM2517 Continued • Planning MPS for future periods. Each month the demand over some planning horizon is estimated. MPS i then prepared f each of the months taking i d is h d for h f h h ki into account forecasts, pre-existing production capacity, Inventory levels and known customer orders. The MPS’s are then leveled. leveled The tentative MPS’s for more months into the future are basis for estimating production cap requirements. l note that MPS’s for current and next month are considered fairly firm as actions would have been taken on their basis. • Planning MPS’s for shop floor planning. Tentative MPS’s for future months are circulated around middle MPS s of the month to assess daily production demands, resources needed etc. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 15 PEMP EMM2517 Continued • Daily Scheduling. The MPS for the current month is broken down into weekly schedule then into daily schedules; incorporating at each breakdown the most recent information on forecasted demand and customer orders. rders Incorporating the most recent orders would make the schedules choppy. However this choppiness would have to be contained within 10%. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 16 PEMP Continued • How to integrate recent demand information. Every wk info @ q for 10 day period y @reqmt yp Every week the centralized sys receives customer order at least 1 wk prior to the 2-week time block that the info represents. This allows time to sort Out and sequence products suitably. This MPS is used to estimate the daily production rate for each end-item. I N F o

EMM2517 W-1 S. Vijaya Kumar, MSRSAS W+1 M. S Ramaiah School of Advanced Studies – Bangalore 17 PEMP EMM2517 Continued • A further refinement is that in some companies a daily alteration plan is received These reflect new orders cancelled orders and received. orders, other changes affecting the most recent 10day period. • This updated version becomes the final daily production schedule. • In well coordinated companies this schedule is prepared 4 days in advance, all related assemblies, materials etc are finalised and transmitted to plant two days before actual production the plant production. etermines the MMP schedule and is executed resulting in products coming out of the assembly reflecting customer order information 4 d i f ti days b k! back! S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 18 PEMP EMM2517 Continued • Material procurement forecast: q y p • The quantity of materials and parts are determined from the monthly MPS and BOM’s as per MRP logic. At the start of each month anticipated daily material requirements and forecast requirements for next two months are sent to suppliers. y p p y • Many pull production systems have Kanban links to suppliers. Daily production schedules, set a wk/4days in advance are used to d d determine d il material requirements. E i daily i l i Every wk the parameters of Kanban – like delivery CT, no of supplier Kanban’s, delay frequency, no. of Kanban s, units/container are reviewed. M. S Ramaiah School of Advanced Studies – Bangalore 19 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Continued • Other systems having MRP links, where, the production schedule f 4 d d i h d l for days l later and BOM’ are d BOM’s combined to order the parts which are supplied 8 times/day. imes/day • For common standard products orders could be once in 2 wks and for special/low volume parts only monthly monthly. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 20 PEMP EMM2517 Continued • Decentralized planning and control system comprises of: Initial capacity planning, capacity fine tuning, Visual mgt tools, team working The worker teams at each cell or stage or department has its own computers for doing capacity planning quality planning planning, planning, inventory control, and reporting. The information about Daily schedule and BOM is got from the central PPC.

Information about present cap/inv is fed back. Adjustments of capacity are possible by OT, flexible work cells, improved SOP, etc. which helps met schedule under all circumstances. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 21 PEMP EMM2517 Continued • Visual controls; The basic idea of collecting information from shop floors should be to provide relevant information for schedule controlling. Kanban s, Andon s, SOR s, Kanban’s, Andon’s, SOR’s, quality procedures, are all posted at convenient points to know what needs to be fast and easily. Role of worker teams; Part of the role of worker teams is to track all performance measures like—lead times, scrap, setup times, production, OEE etc. The members update these information on charts ,supervisors supervisors prepare summaries and send it to the centralized system. So central planning is in touch with reality and this is the key. M. S Ramaiah School of Advanced Studies – Bangalore 22 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Continued • Adapting MRP- based PPS systems to pull production Simplified BOMS, Flat BOMS, Phantom Records, Identification of stock areas ; Point of use for all MRP records. s deduc d educ ss • Post deduct and Deduct Lists Back flushing, Rate based schedules. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 23 PEMP EMM2517 BOM’S • Simplified BOM’S are called flat BOM’s S. Vijaya Kumar, MSRSAS BOM as above dictates that MRP to maintain and track 13 records for this product x. Every movement of materials into or out of stock represents a transaction and a stock record that must be updated updated. **—–Phantom records M. S Ramaiah School of Advanced Studies – Bangalore 24 PEMP EMM2517 Continued S. Vijaya Kumar, MSRSAS M.

S Ramaiah School of Advanced Studies – Bangalore 25 PEMP EMM2517 Cell Manufacturing helps BOM flattening • 2 CELL PROCESS S N S. Vijaya Kumar, MSRSAS C Stock area F O X 26 M. S Ramaiah School of Advanced Studies – Bangalore PEMP EMM2517 continued • Items marked with asterik are at intermediate storage and are taken up b next process i a short time. Thi h h k by in h i This has happened d d due to formation of work cells. Instead of removing them altogether, they can be held as phantom records. Thus the original BOM y p g can be transformed without altering the basic structure of the BOM or of the inventory data files.

Useful when maybe these intermediate items need to be tracked for some purpose . • Generally these are dormant but can be activated when needed. • Stock areas and point of use: p Ultimately stock areas and point of use should become same. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 27 PEMP EMM2517 Inventory Check • Post Deduct and Deduct Lists: In pull system also it is necessary to keep track of the qty of completed end it l t d d items and procured parts and raw materials d d t d t i l needing replenishment. Updating of stock records is done thru post-deduct.

Or back flushing. For every completed end item, the qty on the MPS or final schedule is decreased by a unit, and the on-hand inventory bal of y , y all parts going into the end-item is reduced by the amount used. When stock reaches predetermined levels, a replenishment transaction is initiated electronically/by fax y y etc. Above procedure occurs at all points designated as deduct points. here the inventory records to be updated are specified on a deduct list. Scanners, Scanners data entry terminals are used to simplify Example–simplify. M. S Ramaiah School of Advanced Studies – Bangalore 28

S. Vijaya Kumar, MSRSAS PEMP Summary Summary of how to implement MRP PPS system in pull. • Create a logical flow, improve material handling: EMM2517 – M i i stock to b l Maximize k be located on shop fl d h floor near point of use, extra i stock i f in k room – All areas of shop to have links with good material handling . – MRP system should show new l ti t h ld h locations of all materials. f ll t i l – At this stage MRP continues to release orders; meantime setup, maintenance, quality would have to be improved to continuously reduce stocks. stocks and batch size size. Schedules are leveled. – Layout should encourage flow. S. Vijaya Kumar, MSRSAS Once all of above stabilize and process is able to produce in small batches and follow a somewhat level schedule, the next step can begin. M. S Ramaiah School of Advanced Studies – Bangalore 29 PEMP EMM2517 Continued • Introduce the pull system: A pull system using containers cards deduct points can be containers, cards, phased in It is better to bring in stages, starting from the last stage and working backward. Determine container size, no of cards, stock areas, signal method can be set up.

Initial trial will expose problems with setup quality layout etc . when these are being setup, quality, when sorted out ,one must have extra stocks. • Quality / rejections;lt;1% need to be achieved for pull success. this will be achieved eventually thru quality of design and a host of conformance issues. • MRP at this stage only places work orders on final stage and on suppliers. BOMs are flattened also. M. S Ramaiah School of Advanced Studies – Bangalore 30 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Continued • Create a new layout

Once the pull system for a product family or mixed-model group has been balanced and demand is stable, a new layout-a flow line, or linked cells can be created. As stocks become less operations can be moved closer together. The role of MRP now will be to—accumulate forecasts and customer-order information for generating MPS; Release daily production rates to the final stage; generate and release orders for materials to external suppliers that are not Kanban-linked; update remaining inventory records in the BOM through the post deduct process expand to include entire company.

S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 31 PEMP EMM2517 Session Summary • Role of Centralized and de-centralized systems in a pull PPS have been introduced. p • Need for altering layouts suitably for pull and hence the modification of BOMS has been explained. • Role of shop floor personnel and their training and provision of IT infrastructure to enable their role in the planning and scheduling has been introduced. introduced S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 32 PEMP EMM2517

Session 16 Scheduling Sched ling For Smooth Flo Flow Lecture delivered by: Vijaya Kumar. S Asst. Asst Professor MSRSAS. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 33 PEMP Flow ; PPS EMM2517 • A characteristic of an efficient production system is the smooth flow of job and materials, with least waiting and most production lead time being l l d ti b i value added. dd d • Production scheduling is the link between demand and shop activities and so smooth production flow is largely a matter of production scheduling. We will examine ways to prepare production schedules that meet customer d demand, yet minimize production di d i i i d i disruptions and i d changes needed in production capacity. • We will understand Production leveling, mixed model production, MTS, ATO, MTO Production systems and connected PP;S. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 34 PEMP EMM2517 Traditional Scheduling g • Typical batch production for 3 products—large variation in batch size & batch interval – result of demand variation & production uncertainties. d d i ti d ti t i ti S. Vijaya Kumar, MSRSAS

M. S Ramaiah School of Advanced Studies – Bangalore 35 PEMP EMM2517 Leveling Production • Any variation in scheduled production for a finished product has a ripple effect on the production and delivery schedules of every upstream operation ; supplier. Traditional way of the upstream stages of production / distribution to absorb that variation is to carry b ff stocks of WIP D i slack d buffer t k f WIP. During l k demand, machines are d hi kept busy producing to stock. • But as we know this inventory has lot of adverse consequences y q like blocked money, longer lead times, obsolescence etc. Is there no other way to absorb these variations ? • Yes ,we have to Level the production schedule!! S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 36 PEMP EMM2517 Leveling production With Uniform Schedules… • Schedule A —– one type of level schedule—-batch size yp and interval for each product stays constant. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 37 PEMP EMM2517 Continued…. Schedule S h d l B — another type of level schedule — more th t fl l h d l leveled than A S.

Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 38 PEMP EMM2517 Continued…. • With a uniform, level production schedule, the same quantity is made in each production run for a product, and the production runs occur at regular schedule intervals. intervals With such leveling every upstream operation leveling, follows a pattern that specifies how much and when to produce for every product. This pattern introduces an element of routine into the daily work of every work centre and routine is easier to handle than change. Schedule ‘B’ is leveler than schedule’ A’ i e B will B schedule A i. e. , result in smoother flow of material, which means smaller backlogs. less WIP, and shorter lead times than ‘A’. M. S Ramaiah School of Advanced Studies – Bangalore 39 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Preconditions • For Production leveling to be practical, three conditions g p , must be met. They are: • Stable product demand • Short setup times • Production = Demand S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 40 PEMP EMM2517 Buffer? • Suppliers Demand upstream operations—- ?

Final Assly operations initial **** final LS S. Vijaya Kumar, MSRSAS BUFFER M. S Ramaiah School of Advanced Studies – Bangalore 41 PEMP Demand Management EMM2517 S. Vijaya Kumar, MSRSAS • Continuous stable demand; A buffer is needed to maintain a level schedule in the presence of fluctuating demand. This buffer protects the entire production / g p p distribution process from demand variability. • The question arises,: with variable demand what to keep in buffer? • For this to be practical a company has to manage its demand so as to practical, minimize variation.

One way is tiering: 1st tier—–high volume, common processes 2nd tier substantial volume much process commonality tier—-substantial volume, 3rd tier—-low volume, sporadic orders, little process commonality Customers in first two tiers normally constitute 75% sales & 25% in i numbers. Sh ld b possible t get advance i f b Should be ibl to t d information so th t ti that there is no need to carry stocks. Schedules can be gradually varied to meet demand or a statistical service level calculation can be made to decide stock levels levels. M. S Ramaiah School of Advanced Studies – Bangalore 42

PEMP EMM2517 Setup Reduction • Short Setup Times • The time to change over a process from one product to another must be short. • Aim must be ;lt; 10 Minutes • Benefits? let us see in a simple calculation; Set up time = 4 hrs, CT = 1 min; Case A C A, 1 Lot = 100, Unit of Time (UOT) = ( 240 + 100) / 100 =3. 4 min Case B, 1 Lot = 1000, UOT = ( 240 + 1000 ) / 1000 = 1. 24 min 1000 1 24 However nowadays above method of handling is unacceptable as this g p p y, y, q y thinking hampers product diversity, flexibility, quality —– for the sake of one thing – minimum setups.

New aim = 24 minutes setup time so that even for 100 batch size UOT = 1. 24 minutes. SMED AIM IS , 10 Minutes FOR ANY SETUP! M. S Ramaiah School of Advanced Studies – Bangalore 43 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Single Minute Exchange of Di Si l Mi E h f Dies • N Name i shortened t SMED is h t d to • Also called set up reduction • Th method can b applied to change over on any The h d be li d h type of machine or process. • It’ all about quick change over of j b It’s ll b t i k h f jobs. • Single minute means – less than 10 Minutes. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 4 PEMP EMM2517 Benefits B fit The natural progression of SMED is—–p g • Reduce set up time a u actu e s a e batc es s poss b e • Manufacture in smaller batches is possible • Results in shorter lead time • Reduces quantity of inventory and WIP • Better response to customer demand S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 45 PEMP EMM2517 Lead Time • • • • • • • • S. Vijaya Kumar, MSRSAS Made up of 5 items:—-Queue — usually longest time Set – up Process Wait Move WIP occupies precious floor space Large batches affect quality M.

S Ramaiah School of Advanced Studies – Bangalore 46 PEMP EMM2517 First, First reduce the Set up Time • Set up reduction enables us to reduce batch sizes: p number of repeat batches will increase, WIP in Q will be reduced, Q time decreases, lead time decreases, increases flexibility. Case Study S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 47 PEMP EMM2517 Quality Benefits • Besides achieving greater customer satisfaction from increased delivery flexibility, there are other side effects. Q li h id ff Quality i easier to control is i l when there is less WIP. Because if quality problems occur there are occur, fewer parts in WIP. g g g p • Engineering changes can be implemented with less delay. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 48 PEMP EMM2517 Importance of SMED • If set up time is reduced; g y • We can change over a machine as many times a day as is required by customer demand. • 70 to 75% reduction is possible—that is change over ti time can b as littl as 20% of original be little f i i l time. cost. • Mostly low cost • Measure to see the improvement. S. Vijaya Kumar, MSRSAS M.

S Ramaiah School of Advanced Studies – Bangalore 49 PEMP EMM2517 Background of SMED • Developed by the pioneers of JIT—Toyota in 1969. 1969 • Shigeo Shingo the consultant employed by ‘Ohno’ managed to miraculously reduce set up time in 1000 presses in Toyota from 4 hrs to 3 minutes. • They had benchmarked Volkswagen who were doing this in 2 hrs as compared to Toyota’s 4 hrs. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 50 PEMP EMM2517 Principles of SMED • • • • • Separate internal and external parts of the set up. External element —-M/c is running Usually 50% of set up time.

Ex – prepare preset tools for next job. job S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 51 PEMP EMM2517 Principles of SMED • • • • • • Internal element—element Set up after M/C has stopped. Ex – load tools. tools Then: Convert internal to external external. Streamline internal elements. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 52 PEMP EMM2517 Match P d ti t D M t h Production to Demand d • Production = Demand The frequency of production runs and size of batches in leveled production should roughly correspond to the average actual demand.

So both should be periodically adjusted. Let us work out some simple examples. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 53 PEMP EMM2517 Time Period of Leveling Ti P i d f L li • Leveling for a p g product g p group. Issues are – Time period of leveling? Occas o a y eve as Occasionally level has to be changed. Of course this c a ged. O cou se t s depends on demand volatility. p year As a start and a simple case let us consider a 1 y ; 2 year time frame. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 54 PEMP EMM2517 Example Year 1 Year 2 production demand S. Vijaya Kumar, MSRSAS Level L l production over 2 year ; 1 year periods d i i d M. S Ramaiah School of Advanced Studies – Bangalore 55 PEMP EMM2517 Continued… • Points to be noted: 2 year leveling is inappropriate as initial inventory required likely high inventory at end of 2 year period longer forecasts more unreliable. unreliable 1 year leveling ; 2 levels is better as y p more closely meets demand patterns lesser inventory, better forecast base. So it is very clear that the level of production chosen cannot simply be the average demand over some time horizon. orizon So, if demand has considerable variation between seasons / months, then Level of production must be adjusted seasonally: production = demand M. S Ramaiah School of Advanced Studies – Bangalore S. Vijaya Kumar, MSRSAS 56 PEMP EMM2517 Continued…. • Single Product Leveling — seasonal variation Demand is as follows Winter Wi t 12,000 12 000 Spring 48,000 Summer 60,000 60 000 Autumn 42,000 One way would be — Dec-Feb 1000 units / week; Mar-May 4000 / y ; y week June – Aug 5000 units / week ; Sep-Mar 3500 units / week OR To avoid extremes the schedule could be 3500 / week in 1st & 3rd qtrs. trs Of course some inventory would have to be carried from 1st to 3rd qtr M. S Ramaiah School of Advanced Studies – Bangalore 57 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Continued… • Multiple Product Leveling Assume there are 3 products and their requirements are Product A 4000 / Month Product B 2000 / Month Product C 1000 / Month Other Oth products are made too, but A, B, C are high volume. d t d t b tA B hi h l S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 58 PEMP EMM2517 Weekly, Daily, Shift wise MPS • Three MPS alternatives. b Week 1 2000 A 1000 A 500 B 250 C Day 1 200 A 100 B 50 C Week 2 2000 A 1000 A 500 B 250 C Day 2 200 A 100 B 50 C Week3 Week 4 2000 B 1000 C 1000 A 1000 A 500 B 500 B 250 C 250 C Day 3 etc 200 A 200 A 100 B 100 B 50 C 50 C c S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 59 PEMP EMM2517 Continued… • The choice of alternates depends on ability to reduce changeover times efficiently. • Obviously with schedule ‘c’ every upstream operation every day produces the same volume of every kind of part for the three products. products This is known as a Daily Level Schedule Schedule. This leveling can be done for part of a month and another important point is Daily adjustment of 10% is possible. • This makes the concept very, very practical. • It has to be a combined TEAM effort because promotional sales, marginal order acceptance i t h i l d t interchangeable parts, capacity clarity, bl t it l it changeover issues – ALL can make or break leveling efforts. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 60 PEMP EMM2517 Level Production & Safety Stocks • We will see another example of daily production leveled for volume and mix mix. Demand: Model A = 5000, Model B = 2500, Model C = 2500. Total = 10,000 / Month, Working days = 21, Available Time = 440 Mins Mi Level Daily Volumes Model LDV Model Takt Time A 238 1. 84 min B 119 3. 70 min C 119 3. 70 min Total 476 0. 92 min S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 61 PEMP EMM2517 Continued… Non Level S h d l N L l Schedule Quantities of abc vary daily Level S h d l L l Schedule Quantities of abc Constant 525 Q Quantity 450 500 Quan ntity 476 Throughout S. Vijaya Kumar, MSRSAS Days 1, 2, 3……… Days 1, 2, 3…… 2 M. S Ramaiah School of Advanced Studies – Bangalore PEMP Continued EMM2517 • In order for a leveled production plan to function effectively in an environment where there is variation in the daily ship requirements of customers an optimum quantity of FG inventory customers, must be kept so that sharp increases in daily demand can be met. • A simple method to calculate this stock is accomplished by considering three variables: Production process capacity to ramp up production on short notice Demand variability Confidence interval Example is given later on S.

Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 63 PEMP EMM2517 How to determine optimum FG inventory In a level production environment ? • Clutch assembly cell – Determine capability to produce extra: • Cell cycle time = 2 Min; So capacity = 220units / schedule • Additional capacity = OT 1hr = 30 units, using all breaks = 37 units • Total production capability = 287 units / shift – Determine deviation of daily release (DRD) w. r. to Level Daily Volumes (LDV) – Say; Daily release =100, 150, 100, 300, 200. —- so on • Total mthly demand = 4600 i. e. , 219 / day is LDV Calculate DRD = ——————————- = 89. 4 units M. S Ramaiah School of Advanced Studies – Bangalore 64 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Calculate Daily Release Deviation y • DRD = Standard Deviation • = v ? (Daily release qty-Level daily vol)2 qty Level n = 89. 4 S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 65 PEMP EMM2517 Continued • Determine the FG quantity that corresponds to the confidence interval you select • S 98% CI i used.

Say is d • LDV=219, 98% CI = 2*DRD = 179, Total = 398units Minus production capability = 287units p p y Optimum quantity of FG —— = 120 units This Thi means that if u k h keep 120 units of FG i i f inventory on h d with hand, i h the ability to build 287 units when needed, you can be 98% certain that u will be able to meet the daily demand given the past history of d il release d i i with a l l d production of hi f daily l deviation i h leveled d i f 219. S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 66

PEMP EMM2517 Pull ; Level • Level schedule in Pull production • Pull production needs leveled schedules There is only schedules. ONE schedule in a pull system and it is generally from the last stage / final assembly. • A pull system that produces multiple kinds of products requires a uniform production schedule for every one of them. them Also it may not be cost effective to have final cost-effective assembly / line for each product. So a no of products need to be made on same line. This system is known as y mixed-model production or heijunka. Also we will work out a simple case. M. S Ramaiah School of Advanced Studies – Bangalore 67 S. Vijaya Kumar, MSRSAS PEMP EMM2517 S. Vijaya Kumar, MSRSAS • Assume demand of A, B,C is as per earlier data. p g • There are 3 steps for setting the MMP schedule: • Determining the daily production requirement: Assuming 20 days the daily production demand is———A = 200 B = 100 C = 50 TOTAL = 350 200, 100, 50, 350. • Determining the repeat sequence: 4 : 2 : 1 of A : B : C is the sequence to be repeated 50 times. Determining the product ordering within the sequence: AAAABBC, AABABAC, — Depends on changeover, efficiency, packing quantities, etc ffi i ki titi t • CT = 8 / 350 = 0. 02285 hrs. The way to achieve this will be dealt later on. M. S Ramaiah School of Advanced Studies – Bangalore 68 PEMP EMM2517 • Requirement of MMP: • Apart from somewhat continuous demand, small setup p , p times and demand driven production which is the same as those for normal level production, there are 3 more additional requirements: Flexible workers, Total quality assurance, Small lot delivery of materials. li f i l • Advantages of MMP Elimination of loss due to change over, Process improvement, Balanced work loads, Fewer losses from material shortages shortages. M. S Ramaiah School of Advanced Studies – Bangalore 69 S. Vijaya Kumar, MSRSAS PEMP EMM2517 Session Summary • Schedule for Smooth Flow • Level schedule in Mixed environment. Model Production S. Vijaya Kumar, MSRSAS M. S Ramaiah School of Advanced Studies – Bangalore 70

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