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MBA II -PROD MGMT

UNIT III - Capacity Planning:

Designing of any system involves planning for all aspects such as inputs,

conversion process and outputs of production operation. The effective

management of capacity is the most important responsibility of

production management. The objective of capacity management is to

match the level of operations to the level of demand. Capacity planning

is to be carried out keeping in mind future growth and expansion plans,

market trends, sales forecasting, etc.

Capacity is the rate of productive capability of a particular machine or

facility. It is usually expressed as volume of output per period of time.

Capacity is the limiting capability

of

a producing unit to produce within a stated time period, normally

expressed in terms of output per unit of time. S. Buffa

1. Capacity affects the cost efficiency of operations.2. Sufficient capacity is required to satisfy customers demand on time. 3. Sufficient capacity is required to satisfy customers demand on time. 4. The reasons for capacity planning are;5. Capacity affects the scheduling system.6. Capacity creation requires an investment.

This is the first requirement of an organization when it decides to increase

its production or to produce something new.

MEASUREMENT OF CAPACITY:

It is easy to measure the capacity of the unit manufacturing

homogeneous and tangible products that can be counted. This can be

expressed as number of units of out per peiod of time.

However, it becomes difficult and complicated to measure and express

capacity when the products manufactured are multiple and some of them

require common facilities and others specialized ones. In such situations

the capacity is not expressed as output per period of time. It is usually

expressed as man-hours, machine hours or sometimes in terms of

applicable resources.

Eg:

1) A job shop can measure in terms of machine hours/ man hours2). For hospitals it is bed days per month.

3). For transport facilities it is seats kms / month.

4). A beer plant uses cases of beer / month.

MEASUREMENT OF CAPACITY: (TYPES)

1. Design Capacity: Design capacity of a facility is the planned orengineered rate of output of goods or services under normal or

full scale operation conditions.

Eg: The designed capacity of a cement plant is 100 Tonnes per day. (TPD)

2. System Capacity: System capacity is the maximum output of thespecific product or product

mix the system of workers and machines is capable of

producing as an

integrated whole. It is less than design capacity or at the

most, equal because

of the limitations of product mix, quality, specifications,

breakdowns, etc. The

actual is even less because of many factors affecting the

output. Such as actual

demand, downing time etc.

3. Actual Capacity: The actual capacity is even more reducedbecause of various short time effects such as breakdowns,

inefficiency of labour, absenteeism etc.

The system efficiency can be measured as ratio of actual measured

output to the system capacity:

System efficiency = Actual output

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System output

4. Licensed Capacity: Capacity license by the various regular agenciesor government

authorities. This is the limitation of the output limited

by the government.

5. Installed Capacities: The capacity indicated/ provided at the timeof installation of the plant.

6. Rated Capacity: Capacity based on the highest production rateestablished by actual trials.

CAPACITY PLANNING:

Capacity Planning deals with the long-term and short-term capacity needs

of an organization and determining how these needs will be satisfied.

These decisions are taken based on the consumer demand and this is

merged with the human, material and financial resources available to the

organization. The process can be seen as below;

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Estimating Future Capacity Needs:

Capacity requirement can be evaluated from two perspectivesLong-

term and Short-term strategies.

1. Long term Strategy: Long-term capacity requirements are moredifficult to determine because the future demand and technology

are uncertain. Forecasting for 5-10 years into the future is

extremely risky and difficult. Products may become obsolete.

Demand for the item may not exist after some time. This strategyis determined after market planning and determination of life-

cycle of the product. Major changes that affect overall changes in

the level of output and capacity may have to be made. Marketing

environmental assessment and implementing the long-term

capacity plans in a systematic manner are the major

responsibilities of management. These vary for different products;

(a) Multiple products: Companies produce more than oneproduct, using the same facilities. In order to increasethe profit. This will reduce the risk of failure. Having

more than one product helps the capacity planners to

do a better job. Because products are in different

stages of their life-cycles, it is easy to schedule them to

get maximum capacity utilization.

(b)Phasing-in capacity: In high-technology industries andin industries where technological development is fast,

the rate of obsolescence is very fast. The products

should be brought into the market quickly. The solution

is to phase the capacity on modular (standardized)basis. Strategies may be made for 3-5 years and then

reviewed at the end of that period.

(c) Phasing-out capacity: Outdated manufacturingprocesses cause excessive plant closures and down

time. The impact of closures is not limited to only fixed

costs of plant and machinery. The phasing out here is

done in a humanistic way without affecting the

community. Alternate arrangements are made for the

work force like giving them alternate jobs at otherlocations, compensating the employees, etc.

2. Short-term Strategies: Managers often use forecasts of

product demand to estimate the short-term workload the

facility must handle. The output requirement for around

the next 12 months are estimated and arrangements made

for different resources. Then comparison is made between

existing capacity and likely requirements and necessary

adjustments are made.

For short term periods of up to one year, fundamentalcapacity is fixed. Major facilities are not changed. Then

adjustments are made for various increase or decrease of

quantity of product. Capital intensive processes depend

upon physical facilities, plant and equipment. Short-term

capacities can be modified by operating these facilities

more or less intensively than normal. In labour intensive

processes, short-term capacity can be changed by laying-

off or hiring people or by giving over time to workers, The

strategies for changing capacity also depends on how longthe product can be stored.

FACTORS INFLUENCING EFFECTIVE CAPACITY:

A. Forecasts of demand: Demand forecast influences the capacityplan in a big way, though it is very difficult to predict the demand

with accuracy because of various factors such as life-cycle and

number of products, capacity planning is essential for the effective

running of any business.

1. Plant and labour efficiency: It is difficult to attain 100%efficiency of plant and equipment. It becomes less than

100% because of the enforced idle time due to

machine breakdown, rescheduling and other factors.

Plant efficiency varies from equipment to equipment

and organization to organization. The standard time set

for a worker by Industrial Engineers is for a

representative or normal worker. Actually, workers

differ in their speed and efficiency. Thus, both labour

utility and equipment efficiency are essential.

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2. Subcontracting: Sub contracting refers to off-loadingsome of the jobs to outside vendors, thus hiring

outside agencies to meet the requirement of the plant.

3. Multiple shift operation: Multiple shifts enhance thecapacity of a firm. This is specially suitable for process

industries where the investment is very high.

B. Management policy: Management policy with regard tosubcontracting, multiplicity of shifts, the work station to be run for

third shift, machine replacement policy, etc., are going to affect

the capacity planning.

FACTORS FAVOURING OVER CAPACITY & UNDER CAPACITY

PRODUCTION:

It is very difficult to forecast demand as always there is an uncertainty

associated with the demand of products. The forecasted demand may be

either higher or lower than actual demand. So there is always an element

of risk in capacity planning. This gives rise to under capacity or over

capacity production.

Over capacity:

Over capacity Production is preferred when;

1. Fixed cost of the capacity is not very high.2. Subcontracting is not possible because of secrecy of design/

quality etc.3. The time required to add to capacity is very long.4. The company cannot afford to miss the delivery or lose the

customer.

5. There is an economic capacity size, under which it is noteconomical to operate the equipment.

Under capacity Production is preferred when;

1. The time to build capacity is short.2. Shortage of product does not affect the company or lost sales canbe compensated.3. The technology changes fast.

4. The cost of creating additional capacity is prohibitively high.

AGGREGATE PLANNING:

Aggregate planning is an intermediate-term planning decision. It is the

process of planning the quantity and timing of output over the

intermediate time horizon. Within this range the physical facilities are

assumed to be free for the planning period. Therefore fluctuation in

demand must be met by varying labour and inventory schedule.

Aggregate planning seeks the best combination to minimize costs.

Aggregate Planning Strategies:

The variables of the production system are labour, materials and capital.

To generate higher volume of output, more labour effort is required. If

there is a limitation in the number of men, the variables such as overtime,

subcontracting and multiple shift operation can be resorted to. Materials

also help to regulate output. The company can use such alternatives as

inventories, back ordering and subcontracting of certain products.

These controllable variables constitute pure strategies by which

fluctuations in demand and uncertainties in production activities can be

accommodated.

AGGREGATE PLANNING GUIDELINES:

1. Determine corporate policy regarding controllable variables.2. Use a good forecast as a basis for planning.3. Plan in proper units of capacity.4. Maintain a stable workforce.5. Maintain need control over inventories.6. Maintain flexibility to change.7. Respond to demand in a controlled manner.8. Evaluate planning on a regular basis.

Strategies to Meet Non-Uniform Demand:

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1. Absorb demand fluctuations by varying inventory level, backordering or shifting demand.

2. Strategy Change only the production rate in accordance with thenon-uniform demand.

3. Change the size of the work force to vary production:

Method Cost

1. Hire additional personnel as demand Employment costsfor

Increases . advertising

and recruitment,

cost of

additional shift, if

shift is

added.

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2. Lay off personnel as demand Cost ofcompensation to

Decreases. workers for lay off.

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-

TOTAL QUALITY MANAGEMENT:

Total quality management is based on the premise that any production or

service can be improved and that every successful organization must

continuously strive for improvement of quality. The essence of TQM is

continuous improvement at all levels to achieve the ultimate goal of

customer satisfaction. Total means comprehensive ways of dealing with

all sorts of problems in any production situation. Quality means meeting

customers requirements, formal and informal at the lowest cost, first

time and every time.

This means that everyone should be involved in quality at all levels and

across all functions, ensuring quality at every step. The management

responsibility refers to the need for everyone to be responsible for their

own jobs, which refers to managers as well as workers.

The essence of TQM is value addition. A business unit draws on its

resources and adds value in order to create an output or product that

brings forth the customers delight. TQM perspective recognizes both

qualitative as well as quantitative relationships between output and

input. The value does not include only the physical goods but also the

prestige, pride of ownership, warmth and pleasure in long lasting

relationship with the customer.

The TQM process highlights the fact that quality is a continuous process

that can be broken anywhere in the system of supply and customer

service. An organization can let each and every person in its organisation

the importance of quality by making them aware of the important role

each one plays in the formation of quality. In general, a process helps to

change a set of inputs into desired outputs in the form of products and

services. The quest for excellence in quality is a continuous process. This

process is based on a process that is called the Deming Wheel. The

wheel generates activities with measurable outputs, is a process and the

perfection of the process is the ultimate goal.

In a Deming Wheel, the plan defines the process, which ensures

documentation and sets measurable objectives against it. The DO

executes the process and collects the information required. The CHECK

analyses the information in suitable format. The SCT brings about thecorrective action, using TQM techniques and methods. At the end of

each cycle, the process is either standardized or adjusted. This brings

about improvement in the process and quality.

PDCA Cycle Deming Wheel

The TQM process is both a working process and a quality philosophy.

Principles and Actions of TQM

-------------------------------------------------------------------------

Principles Actions

--------------------------------------------------------------------------

The approach Management led

The scope Company wideThe scale Everyone is responsible for quality

Act Plan

Check Do

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The philosophy Prevention not detection

The standard Right first time

The control Cost of quality

The theme Continuous improvement

The dimensions Human, technical and cultural

------------------------------------------------------------------------------

To develop TQM process the organization has to be guided through the

following basic rules of action ;

Stages of implementation of TQM:

1. Identification & preparation: This stage is concerned with theidentification and collection of information about the organization

in the prime areas where improvement will have most impact on

the organisations performance. It is important also to find out the

total cost of quality. This will include the cost of waste, error

correction, failure appraisal and future prevention of errors in the

organization. At this stage it is also important to understand the

views and opinions of the customers, managers and employees.

This will help to understand the magnitude of the problem. The

measurement of the cost of quality made at the beginning of the

TQM process can be compared to the cost at a later stage to

establish the achieved improvement. The initial measurement of

the cost will help to identify where the improvement must be

made. It must be ensured that all data and information are

correct.

2. Management Understanding: This step is concerned withensuring that the management understands the objective andmethodology of TQM and is ready to adopt those methods.

Sometimes, to adopt TQM procedures, a significant change in

management thought and process is often required and this takes

time. Therefore, it is necessary to educate management so that

they themselves can take the lead in the process and educate

others.

3. Scheme for improvement: In this stage it is necessary to identifythe quality problems in each division, in each department and

throughout the whole organization. A scheme for training for

improvement can be established after the realization of the

following aspects of the organization;

Purpose of the department Customers and suppliers relationship Meeting customer needs Causes of problems and their best solutions. Prevention of recurring problems. Customer satisfaction. Priorities for improving efficiency.

At this stage it is essential to know whether investment is requiredfor training, management time and communication. Arrangement

should be made for them.

4. Critical Analysis: At this stage new targets are set and this isinformed to everybody, including suppliers and customers.

Progress of various stages is also acquired. Everybody in the

organization , including internal as well as external customers, is

made to work as per TQM procedures. New targets as required by

the customers are set up at this stage. This will automatically

upgrade the quality standard of the organization and maintain the

competitive position in the market.

List of techniques for TQM:

1. Customers perception survey.2. Quality function deployment3. Cost of quality statement.4. Top Team workshop5. Total quality seminars6. Departmental purpose analysis7. Quality training8. Improvement action team9. Quality circles.10.Suggestion schemes11.Help calls12.Visible data13.Process management14.Statistical process analysis15.Process capability analysis16.Fool proofing17.Just in Time manufacturing18.Business process reengineering

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19.Quality Improvement Team.TQM Model:

Customer satisfaction is the focus and main purpose of TQM. This

benefits the company in the long term and short term range. Basically the

customers satisfaction depends upon the gap between the expected and

the actual quality of the product offered to the customer. If there is a

balance between the two, there is customers satisfaction. If the actual

quality is higher than the customers expectations or if something is given

beyond the customers expectations, there is delight. TQM aims at

customers delight. The delighted customer becomes a loyal customer

and will have complete trust in what the company offers or gives. The

quality of product results in better reliability and this results in retention

of loyal and delighted customers.

Total Quality Management Model

|____________________

_________________________

PRODUCT & SERVICE Quality CUSTOMERSATISFACTION

Reliability - Attracting& Retaining Customers

On time delivery - TrustBuilding

Error free products - NeedIdentification

__________________________

________________________________

_____________ _________________________

_____________________

People QUALITY SYSTEM

COMPETITIVENESS

Involvement * Process quality Mgmt.

@ Market Standing

for continuous * Bench Marking @

Customer preference

improvement * Process performance@ Profit

_____________ _________________________

______________________

___________________________________________

ORGANISATIONAL GAINS

Costs * Employee turnover Cycle time * Creativity & Innovations Employee satisfaction

The quality of the product depends on the ability of the company to

identify both stated and unstated needs, translation of these needs into

design specifications and designing and managing the process to keep

quality level as per design and ensuring correct performance. This is

possible only with a well designed quality system in which all employees

and managers are involved at all times.

Total Quality Management:

Total Quality Management incorporates the features like: products that

meet customer needs, control of process to ensure their ability to meet

design requirements and quality improvements for the continued

enhancement of quality.

Customers satisfaction is based on the subjective comparison between

the expectations and the actual quality received. Customers satisfaction

depends on the timeliness and quality of the product. Quality system

should possess a sound as well as technical perspective. To develop such

a quality system, customers preference should be studied. Employees

should be trained to be sensitive to the needs and rewards should begiven to employees for making customers satisfaction their primary goal.

Total Quality management should be based on the premise that any

production or service can be improved and the process of improvement

should be a continuous procedure. The essence of TQM is continuous

improvement through collaborative efforts across functional boundaries

and between organizational levels with the ultimate goal of providing

customer satisfaction. This means that everyone at all levels should be

involved in the process. Quality means meeting customers needs, formaland informal at lowest cost, first time and every time.

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EVOLUTION OF TQM:

1. Quality Inspection: Solving, sorting, investigating, correctiveactions, identifying the source of non conformance and dealing

with them.

2. Quality Planning: Developing quality manuals, producing processperformance data, planning for quality.

3. Quality Management: Statistical process control, third partyapproval, quality system audit, use of quality costs, involvement of

non-production operations.

4. TQM: continuous improvement system at all levels. Performancemeasurement, focus on leadership, employees empowerment.

THE TQM APPROACH:

Quality is a continuous process that can be broken anywhere in the

system of supply and customer service. By motivating the employees

and teaching them how they can contribute to the customers

satisfaction, quality can be brought about consistently. Theorganization must remember that throughout the process of

production there will be internal as well as external customers. In

general, a process helps to change a set of inputs into desired

outputs. The quest for continuous improvement of quality is a

continuous cycle. The process of continuous improvement is based on

the Deming Wheel. The wheel shows a continuous movement in a

certain direction. The idea behind this is that the input which

generates activities with measurable out put, is a process and the

perfection of the process is the ultimate objective.

PDCA CYCLE Deming Wheel

In a Dennings wheel, the plan defines the process, which ensures

documentation and sets measurable objectives against it. The Doexecuted the process and collects the information required. The CHECK

analyses the information in suitable format. The ACT obtains corrective

action using the TQM Techniques. And methods and assesses future

plans. At the end of each cycle the process is either standardized or

targets are adjusted based on the analysis and the cycle continues.

The TQM approach is both a practical working process and a quality

philosophy for the organizations committed to growth and survival. It

starts with a vision to continuously improve quality to continuously satisfy

customers.

SUCCESSFUL FACTORS OF TQM:

Successful implementation of TQM depends on the following aspects;

Training Bench Marking Customer satisfaction surveys Recognition and rewards Management commitment

PRODUCTION PLANNING & CONTROL:

Production planning and control is a tool available with management to

achieve stated goals. Production planning starts with analysis of given

data , ie, demand for product, delivery schedule etc., and on the basis

of the information available, a scheme of utilization of firms resources

like machine, material and men are worked out to obtain the target in

the most economical way.

Once a plan is prepared it is executed in line with the details given in

the plan. Production control comes into action if there is any deviation

Act Plan

Check Do

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between the actual and the planned. Whatever corrective action is

required is taken to achieve the target, by using control methods.

This is a pre-production control activity.

Need for PPC:

1. Effective utilization of resources.2. To achieve production objectives with respect to quality, quantity,

cost and timeliness of delivery.

3. To obtain uninterrupted production flow in order to meetcustomers varied demands,

4. To help the company to supply products of good quality atcompetitive rates.

Factors that affect production system , causing deviations;

1. Non-availabilty of material2. Plant , machine and equipment breakdown3. Changes in demand and rush orders4. Absenteeism5. Lack of coordination and communication between functional

departments.

Objectives of PPC:

1. Systematic planning of function of production activities to achieve the

highest efficiency in products.

To organize means of production like man, material, etc to achieve stated

products in time and cost.

Optimum scheduling of resources

Coordination with other departments in regards to production.

To conform to delivery schedule commitment

Material planning and control

To enable adjustments arising out of change in demand and rush orders.

Functions of PPC:

1. Materials function: Raw material , finished parts, and componentsshould be made available in required quantities and at the

required time to ensure correct start and end of each production.This will ensure uninterrupted production. Functions include the

correct specification of materials, delivery dates, variety

reduction, ie, standardization and procurement decision.

2. Machine and equipment function: This function is related to thedetailed analysis of available production facilities, equipment

down time, maintenance policy, procedures and schedules. The

function is to make available machine time, with minimum down

time because of breakdown

3. Methods: This function is concerned with the selection of bestpossible method of production. Developing specifications and

deciding sequence of operation is an important function of PPC

4. Process planning (Routing): This function is concerned with thespecific path or route that the raw material should follow to get

transformed in to the finished product through such methods as

fixing the layout and path of travel of raw material, breaking down

of each component of operation for detailed analysis and deciding

the set up time and process time for each operation.

5. Estimating: Operation time for each process is estimated.Standard time for each operation is established.

6. Loading and scheduling: Scheduling is concerned with preparationof machine loads and fixation of starting and ending dates for each

of the operations. Machines are loaded according their capacity

and availability.

7. Dispatching: Orders are released . Definite work is assigned tomachines, work centres and men. Required material are issued

from stores. Jigs and fixtures are made available . Necessary work

orders are released. Keeping a record of all working of man and

machine.

8. Expending: This is the work of keeping a close eye on the progressof each work. Bottlenecks are identified. Correction of errors are

made and ensures that production rate is in line with schedule.

9. Inspection: Stage inspection is carried out to ensure proper qualityof material and smooth running of equipments.

10.Evaluation: The entire process is evaluated and correction andimprovement methods are found.

PRODUCTION PROCEDURE:

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The PPC function depends on the type of product that is being produced.

It is important to know whether manufacturing system is jobbing, batch,

mass or flow system. It is the job shop unit that requires all the functions

of PPC. PPC consists of;

1. Sales forecast: A detailed forecast of the demand andrequirement of the product is submitted to the management by

the Sales Department.

2. Preparation of Production budget: Production budget is preparedby the Finance Department. Management reviews the forecast

and the budget required to take a decision on the annual

quantities to be produced.

3. Engineering department to prepare details: The Engineeringdepartment then prepares drawings and Bill of Materials to check

or modify the existing machines to meet the requirements.

4. Production Planning activity: Production planning activity beginsas soon as the technical information is received from the

engineering department. A schedule or time table is prepared.

Inventory levels are checked. Make or buy decisions are made.The complete data on methods, process sheets, machine loading

and production schedule is sent to the dispatch section.

5. Dispatching: Detailed production orders are sent to the dispatchdepartment and the shops to specify how, when and where the

operations are to be performed.

6. Progressing: Progress in manufacturing is continually checked andsuitable corrective actions are taken whenever necessary.

7. Inspection: Inspection is carried to ensure that the end productsare the same as planned.

8. Evaluation: Evaluation is carried out after and before productionso that any sort of correction measures required can be carried

out.

9. The finished product is transferred to stock and then delivered tothe customers.

MANUFACTURING METHODS AND PPC:

Job production Functions of PPC

a) Materials are purchased on receipt of the order.

b) Standard tools are stocked and special tools are made in house orpurchased from outside.

c) Process planning activity normally does not exist. Supervisorsdecide the work methods, fixes the machines and estimates the

completion time of the operation, based on the drawings and

specifications.

d) Schedules are prepared to mark the beginning and end of eachactivity.

e) Progressing is done through meetings with supervisors.Batch Production Function of PPC:

a) In this case materials and tools control are strict and rigorous.b) Systematic stock replenishment is made.c) Detailed route sheets of man material and processes are

prepared.

d) Detailed loading and scheduling schedules are prepared, inconsultation with supervisors are prepared.

e) Progressing is done thoroughly and detailed data is collected onthe progress of the work.Continuous production: PPC function:

a) Materials function is critical. No tools control is required becauseof the nature of the plant.

b) No process planning activity is required to be done.c) Scheduling is restricted to final quantity required.d) Progressing required for only the final product quantity.

Problems of Production, Planning and Control:

A. Decision at Macro level at Production levelB. Decisions at Macro level at operation and control level.

Decision at Macro level at Production level

(a) Process design(b)Work station design and equipment selection(c) Flow of work(d)Replacement policies.

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Decisions at Macro level at operation and control level

(a) Materials and tools control(b)Production control(c) Quality and cost control(d)Labour control PRODUCTION CONTROL:

PRODUCTION CONTROL:

Production control is the function of management which plans, directs

and controls the material supply and processing activities of an enterprise

so that specified products are produced by specific methods to meet an

approved sales programme.

Outline of production control

Loading and scheduling: The sales department issues work order which

authorizes the manufacturing of a product. This order is the starting point

of production control department. The Master Production Schedule

(MPS) is prepared. This involves assessing labour, materials required andavailability and determination of dates by which major functions must be

completed. The loading of various work centers are carried out.

Material Control: The function of material control section is that of

assessing the need for material and then taking appropriate steps to meet

those requirements.

Dispatch and Progress: All plans and authorizations for production are

dispatched to concerned manufacturing departments and regular

inspection is carried to ensure that material is being manufactured as per

planned design and quality. Any deviation is rectified.

Loading, sequencing and scheduling:

Output plans specify when products are needed but these specifications

must be transformed into operational terms to be implemented on the

shop floor. The Operational system is as follows;

Sales Programme

Material Schedule

Progress Labour control Dispatch Material

Control

Manufacture

Customer

Functions of production

Loading, Sequencing & Scheduling:

Output plans specify when products are needed . These plans are to be

transformed into operation terms to be implemented on the shop floor.

The actual system is as follows;

Out Plan

Master

Schedule &

Materials

Requirem

ent Plan

Loading Assigning specific jobs to eachWork centre for the planning period

Sequencing Determining the order for processing

Of all jobs

Scheduling Establishing start and finish time

Expediting Monitoring progress

LOADING:

Each job may be specific and have a unique specification and a routing

system through various work centres. When a job order is released, eachjob is allocated to the work centre and this establishes the work load of

that centre. This is called loading. The work is assigned to a specific

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machine or worker. Loading can be expressed through the following

means;

1. Gantt Charts2. Visual Load profiles.GANTT CHARTS: This is a tool used for both loading as well as

scheduling. This chart consists of a simple rectangular grid. Vertical

lines divide the chart into units of time. The unit can be year, month,

day, hour, as per requirement. The horizontal section divides the chart

into sections that can represent work tasks or work centres. This chart

has the advantage of being very easy to read and conveying

information about production on the shop floor quite clearly.

Eg: There are three jobs which are to be processed, I, II, III. The job

centres are A, B, C and D. This can be represented in the Gantt Chart

as below;

Days

I II III

Jobs

VISUAL LOAD PROFILES:

This is a graph that compares work loads and capacities on a time

scale.The load consists of open orders, ie, existing orders from

customers assigned to work centres. In computer systems, the load

consists of open orders and planned ,ie, work from prospectivecustomers.

When there are overloads, some of the load can be shifted to

alternative work centres. This can be done either by lot shifting

where a job order is split and only part of it is processed and others

are processed later. Or it can be done by operation splitting where

some of the work jobs are processed in one work centre and some

others in another work centre.

PRIORITY Sequencing:

Sometimes when there are more jobs than can be handled with exiting

facilities, priorities have to be fixed. All jobs are kept in a queue. The job

with the highest priority is assigned Priority Sequencing.

Criteria for sequencing:

1. Set up cost2. In process inventory3. Idle time4. Average time to complete job5. Average number of jobs waiting in the queue6. Average time the job is likely to take.

Priority sequencing rules:

1. First come fist served FCFS)2. Earlier Due Date (EDD)3. Shorting processing time. (SPT)4. Least Slack (LS)5. Longest Processing Time (LPT)6. Preferred Customer Order (PCO)

Sequencing Problems: Problems in sequencing arise when there is need

for determining optimum order or performing a number of jobs of

facilities according to some pre-assigned order to optimize the out put in

terms of cost, time or profit.

Production consists of several operations to be performed in a given

sequence. Frequently there are many operations that are required to be

done in the same work station at the same time. Under such situations, it

is necessary to chose from the operations.

There are some jobs, say n number of jobs , each of which must be

processed through machines no. m1, m2, m3, .mn, one at a time. The

order of processing each job through the machines is given and the timetaken to process each job on each machine.

C

B

B

A

C

B

A

C

B

AA

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The problem is to determine the order of processing of n jobs so that the

total elapsed time is all the jobs will be minimum

Assumptions:

1. No machine can process more than one job at a time.2. Process times are independent of processing jobs.3. Once job is started, it is continued till completion.4. Moving a job from machine to machine is negligible

Solutions:

1. N jobs and 2 machines problemsRule: 1. Select the smallest processing time from the given

list of processing times

Rule: 2. Do the job with the minimum time required first in

the first machine and do the job requiring the maximum

time for processing first on machine no. 2.

Rule 3: Repeat this procedure for all jobs.

Rule 4: Find the total processing time as per the sequence

determined. Also find out the idle time.

2. N job three machine problem:There are three machines M1, M2, M3.Rules: 1. Convert the three machine problem into two machine

problem by introducing two fictitious machines G and H

So that G1 = M1 + M2i

H1 = M2 + M3i where I = 1.2.3.4.n

Rule 2: Once the problem is converted to n job 2 machines, the

sequence is determined using the first procedure.

Rule 3: For the optimal sequence determined, find out the

minimum total elapsed time and the times associated with the

machines.

Forwarding Scheduling and Backward Scheduling:

Forward Scheduling: This is commonly used in job shops where

customers place their orders on need as soon as possible basis. The

scheduling determines start and beginning of next priority job by

assigning it the earliest available time slot from that time.. It also

determines when the job will be finished at that particular work centre.

Since the jobs are started and begun as early as possible, they will also be

consequently available at the market before they are due.

The set forward method generates in-process inventory that are needed

at subsequent work centres and higher inventory cost.

Backward scheduling: This method is often used in assembly type

industries where delivery dates are committed in advance. The method

determined the start and finish times of a waiting job by assigning them

to the latest available time slot that will enable each job to be completed

just when it is due, but not before.

This minimizes inventories and inventory holding cost. As it is made at the

last minute, it has to be sent directly to the market from the work centre.

Obt raw Oper 1. Oper 2. Final

Material Assly.

Forward

Scheduling

Time

Period 1 2 3 4 5 6 7 8

9 10 11

Backward

Scheduling obt. Raw mat Opr 1 Oper 2.

Final Assly.

Critical Ration Scheduling:

This is a technique for establishing and maintaining priorities among the

jobs in a factory. Critical ratio is an index that sets relationship between

the time that a product is required and when it can be supplied.

Time the job is need (Demand time

Critical Ratio = ---------------------------------------------

Supply lead time

Eg:

Product is required in 20 days

Critical Ratio = ----------------------------------------------------- = 2

Product can be made available in 10 days.

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The critical ratio of 2 means that t ime available for delivery of material is

twice the time required to manufacture the product.

Critical ration of

i) Greater than one means there is sufficient time and job can becompleted ahead of schedule.

ii) Equal to one means just on schedule and requires close watch.iii) Less than one means that the job is critical and needs to be

expedited to complete on schedule.

Questions:

Q1. What are the different measures of capacity? Define capacity

planning.

Q2. What are the short-term and long-term capacity planning

strategies?

Enumerate the factors that favour under capacity and over

capacity in production.

Q3. Define TQM. What will be the scheduling strategy in case of

continuous

and intermittent production?

Q4. What are the factors influencing effective capacity?

Q5. How will you estimate future capacity needs?