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Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Manufacturing Planning and Control MPC 6 th Edition Chapter 7
Chap007 Capacity
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Manufacturing Planning and ControlCopyright © 2011 by The
McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Capacity planning and management addresses two managerial
problems:
Matching capacity to plans–by either providing sufficient capacity
to execute the plan or adjusting the plan to meet available
capacity.
Consider the marketplace implications of faster throughput times–at
the expense of reduced capacity utilization.
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Agenda
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Role of Capacity Planning in Master Planning & Control
The primary objective of capacity planning techniques is to
estimate capacity requirements early enough to be able to meet
those requirements
Flawless execution of the capacity plan allows the firm to avoid
unpleasant surprises
Insufficient capacity leads to deteriorating delivery
performance
Excess capacity may be a needless expense
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Resource
planning
Resource planning
Rough-cut capacity
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Simplest rough-cut capacity planning approach
Data inputs from master production schedule
Based on planning factors from historical data (work center
utilization, production standards)
Overall labor- or machine-hour capacity requirements are estimated
from MPS data
Estimate is allocated to work centers based on historical
workloads
Inherent inaccuracies may limit usefulness
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Work center capacity = Historical percentage*Total required
capacity
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Capacity Bills
Rough-cut capacity planning method that provides more direct link
to individual end products
Bill of capacity indicates total standard time to produce one unit
of an end product (by work center)
Master production schedule data is then used to estimate capacity
requirements for each work center
Requires more data than CPOF procedure
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Std. Setup hours are spread over the standard lot size
Total hours include both std. run time and std. setup time
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Capacity Bill Example
MPS quantities are multiplied by bill of capacity to determine work
center capacity requirements by period
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More sophisticated approach but requires tracking of relatively
short time periods (< 1 week)
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Resource Profile Example
Production of one unit of product A in period 5 requires production
activity in periods 3, 4, and 5 and in work centers 100, 200, and
300
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Resource Profile Example
Requirements (by work center and period) for one unit of end
product are multiplied by the MPS plan to determine capacity
requirements
These requirements are then summed over all periods to finalize the
process
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Utilizes time-phased material plan from MRP
Takes into account materials in inventory
Accounts for the current status of work-in-process
Accounts for service parts and other demands not accounted for in
the MPS
Requires more inputs and more computational resources
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Scheduled/planned quantity multiplied by processing time for work
center
This process is repeated for each work center to complete the
plan
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Capacity requirements planning doesn’t consider capacity when
planning materials
Assumes that capacity can be adjusted, given sufficient
warning
Planning capacity and materials at the same time allows
construction of a plan that works within current capacity
constraints
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Finite Capacity Scheduling
Simulates job order start and finish times in each work
center
Establishes a detailed schedule for each job in each work
center
When a work center’s capacity is not sufficient for all planned
jobs, prioritization rules determine which jobs will be shifted to
later times
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Product A does not consume all available capacity
Combination of all products consumes all available capacity in
several periods
Planned orders are shifted to stay within capacity
limitations
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Work Center Scheduling
Vertical Loading–each work center is scheduled job by job without
consideration of other work centers
Increases capacity utilization but may result in more partial job
completion
Horizontal Loading–jobs are scheduled through all work centers in
order of priority
Lower capacity utilization but generally a higher proportion of
jobs are completed in a shorter time span (higher customer service
levels)
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The FCS plan is a simulation
Randomness leads to actual times that don’t match scheduled
times
Should the work center wait for a job that isn’t available on time
(idleness = lost capacity)
Over time, the accuracy of the plan deteriorates
Frequent rescheduling may be needed to maintain accuracy
Rescheduling process is computationally expensive
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Advanced Production Scheduling (APS)
Expands Finite Capacity Scheduling to the entire product structure
(end products and sub-assemblies)
Can lead to a significant reduction in lead times
Requires accurate scheduling parameters, flawless execution, and
prompt recovery from any problems
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Planned inputs are determined by the capacity planning
process
Planned outputs depend upon the nature of the work center
Capacity-constrained–planned output is determined by the processing
rate of the work center
Non-capacity-constrained–planned outputs match planned inputs
Differences between plan and actual must be addressed (management
by exception)
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Short-term capacity planning problems can be reduced by
well-executed production and resource planning
Efficient use of sufficient capacity by a good shop-floor system
reduces capacity issues
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Capacity can be measured in many ways
Labor hours, machine hours, physical units, monetary units
The firm’s needs and constraints should determine the capacity
measure
Trends
Less clear distinctions between direct and indirect labor
Reduced ability to change labor capacity
Outsourcing
Using the Capacity Plan
Two broad choices are available when actual capacity and plan are
mismatched
Change capacity–reduce or increase capacity as indicated (within
constraints)
Revise material plan–change requirements and/or timing to match
available capacity
The amount of material that can be produced is limited by the
available capacity, regardless of the material plan
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Principles
Capacity plans must be developed concurrently with material plans
if the material plans are to be realized.
Capacity planning techniques must match the level of detail and
actual company circumstances.
Capacity planning can be simplified in JIT environments.
Better resource and production planning processes lead to less
difficult capacity planning processes.
Better shop-floor systems reduce the need for short-term capacity
planning.
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Principles
More detailed capacity planning systems demand more data and
database maintenance.
When capacity does not match the requirements, it isn’t always
capacity that should change.
Capacity must be planned, but use of capacity must also be
monitored and controlled.
Capacity planning techniques can be applied to selected key
resources.
Capacity measures should reflect reasonable levels of output from
key resources.
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Resource planning is most closely linked with which MPC
element?
The capacity planning using overall factors (CPOF) technique is
likely to perform poorly in a just-in-time (JIT) environment?
(True/False)