Intended learning outcomes: Differentiate between infinite loading and finite loading. Explain the classification of techniques for capacity management in dependency upon flexibility of capacity and flexibility of order due date.
Depending on the main objectives of the firm (see Section 1.2.2), the values for some of the characteristic features of planning & control as in Figures 4.4.3.1 and 4.4.4.1 will differ.
- If a company puts the focus on flexibility in the utilization of resources, then flexible capability (of the production equipment) and flexible workforce are vital.
- If high capacity utilization is required, there will be no flexible capacity. This is particularly the case for the production infrastructure.
- If high service level and delivery reliability rate are required, there will be no flexibility of the order due date of the production or procurement order.
Flexible workforce, meaning that capacity can also be applied for processes outside a particular work center, can increase flexible capacity. For example, if employees can be moved from one work center to another, this is the same as if each work center has flexible capacity of the workforce.
There are various techniques for scheduling and capacity management. The techniques can be grouped into two classes based on the two planning dimensions shown in Figure 5.3.3.2: infinite and finite loading.
- Infinite loading means calculating the work center loads by time period, at first without regard to capacity. The primary objective of infinite loading is to meet dates as scheduled, with greatest possible control of fluctuations in capacity requirements. Therefore, infinite loading is most useful when meeting due dates must take priority over high capacity utilization, such as is the case in customer order production in a job shop production environment. The planning techniques are rather simple.
- Finite loading considers capacity from the start and does not permit overloads. To prevent overloads, the planner changes start dates or completion dates. The primary objective of finite loading is good use of the capacity available through the course of time, with the greatest possible avoidance of delays in order processing. Therefore, finite loading is most useful if limited capacity is the major planning problem, such as in the process industry in a continuous production environment. Often, this condition is given in very short-term planning, in execution and control. The planning techniques are rather complicated.
In addition to these two classes of techniques, Figure 5.3.4.1 groups techniques for scheduling and capacity management into nine sectors in dependency upon flexible capacity and flexibility of the order due date. The techniques can be compared with respect to their overall capacity planning flexibility.
Overall capacity planning flexibility is defined as the “sum” of the quantitative flexibility of capacity along the time axis and the flexibility of the order due date.
- Note that there is no technique in the three sectors at top right: Here, the overall capacity planning flexibility is high enough to accept and execute any order at any time. This case is very advantageous with regard to capacity planning, but it is usually too expensive due to overcapacity.
- Note the numerous techniques in the three sectors from top left to bottom right. Here, there is sufficient overall capacity planning flexibility to allow a computer algorithm to plan all the orders without intervention by the planner. After completion, the computer program presents unusual situations to the planner as selectively as possible in the form of lists or tables. The planner will intervene to execute appropriate planning measures — perhaps daily or weekly.
Fig. 5.3.4.1 Classes of techniques for capacity management in dependency upon flexibility of capacity and flexibility of order due date. The abbreviation “CPFP” stands for cumulative production figures principle (see text).
- Note that there are few techniques in the two sectors above and to the right of the bottom left sector. Here, there is no flexibility on one axis and only low flexibility on the other. Thus, there is little overall capacity planning flexibility. Planning takes place “order for order” (order-wise). Each new order must be integrated individually into the already planned orders. The planner may, in extreme cases, have to intervene following each operation and change set values for planning (completion date or capacity). Already planned orders may have to be replanned. This procedure is usually very time consuming and is therefore efficient only for orders with considerable added value.
- Finally, note that there is no technique in the sector at bottom left. Here, there is no flexibility of capacity or due date. As a consequence, there can be none of the required balancing, and the planning problem cannot be resolved.
Continuation in next subsection (5.3.4b).
Course section 5.3: Subsections and their intended learning outcomes
5.3 Introduction to Detailed Planning and Execution
Intended learning outcomes: Disclose basic principles of materials management, scheduling and capacity management concepts. Produce an overview of materials management, scheduling and capacity management techniques. Differentiate between available-to-promise and capable-to-promise.
5.3.1 Basic Principles of Materials Management Concepts
Intended learning outcomes: Present the objectives of materials management. Differentiate between deterministic materials management and stochastic materials management. Differentiate between independent demand and dependent demand. Produce an overview on quasi-deterministic materials management, fill rate, stockout, backorder.
5.3.1b The Cumulative Fill Rate
Intended learning outcomes: Explain and experience the cumulative fill rate.
5.3.2 Overview of Materials Management Techniques — Kanban, Order Point Technique, Cumulative Production Figures Principle (CPFP).
Intended learning outcomes: Disclose the basic classification of detailed planning techniques in materials management. Produce an overview on techniques such as Kanban, order point technique, and CPFP (cumulative production figures principle).
5.3.2b Overview of Materials Management Techniques — Customer Order and Material Requirements Planning (MRP)
Intended learning outcomes: Explain the additional classification for unique demand or demand for high-cost items with a discontinuous demand pattern. Produce an overview on techniques such as Kanban, order point technique, CPFP (cumulative production figures principle), and MRP (material requirements planning).
5.3.3 Basic Principles of Scheduling and Capacity Management Concepts
Intended learning outcomes: Present the objectives of the tasks as well as the overall objective of scheduling and capacity management. Describe the vicious circle caused when capacity bottlenecks prolong the planned production lead-time.
5.3.3b The Overall Objective of Scheduling and Capacity Management
Intended learning outcomes: Present the overall objective of scheduling and capacity management. Disclose to which extent capacity can be stored.
5.3.4 Infinite Loading and Finite Loading
Intended learning outcomes: Differentiate between infinite loading and finite loading. Explain the classification of techniques for capacity management in dependency upon flexibility of capacity and flexibility of order due date.
5.3.4b Overview of Scheduling and Capacity Management Techniques
Intended learning outcomes: Produce an overview on order-oriented infinite loading, order-wise infinite and finite loading, operations-oriented and order-oriented finite loading, constraint-oriented finite loading, load-oriented order release (Loor), capacity-oriented materials management (Corma).
5.3.5 Available-to-Promise (ATP) and Capable-to-Promise (CTP)
Intended learning outcomes: Explain available-to-promise (ATP) and the determination of ATP quantities. Produce an overview on the techniques of multilevel available-to-promise (MLATP) and capable-to-promise (CTP).
