Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

14.3.1b Operations-Oriented Finite Loading — Example and Evaluation

Intended learning outcomes: Explain an example of operations-oriented finite loading. Present an evaluation of the technique. Identify its limitations and typical areas of application.

Continuation from previous subsection (14.3.1)

Figure shows the result of operations-oriented finite loading using the orders in Figure, specifically P1, . . . , P6, and the same work centers, namely, work center A and work center B. Priorities were assigned in ascending order of order ID. Again, “preload” represents operations for orders that were loaded before orders P1, . . . , P6.

Fig.       Example of operations-oriented finite loading.

In contrast to the load profile in Figure, in finite loading we display the loads rotated 90° toward the time axis, whereby the height of the bar is equal for all work centers. The period length is then standardized at 100% capacity over the time period. This technique is possible because the load does not usually exceed capacity. We can then enter a number of work centers along the vertical axis. Utilization of the entire system is evident at a glance.

Evaluation of the technique: The following prerequisites must be met to use this technique:

  • Capacities and loads must be sufficiently reliable, that is, the planning data and reported work progress must “tally.” Other­wise, errors can accumulate very rapidly in the calculated dates.
  • Due dates must be sufficiently flexible: We set the completion date for an order randomly on the basis of the existing utilization of production capacity. Lead times can be considerably longer than originally planned, however.
  • It must be possible to limit the optimization of set-up times to the operations within a given period.

This creates the following limitations:

  • The further we plan into the future, the smaller our chances that the planning forecasts will prove correct, if only due to unforeseen breakdowns or incorrect load specifications. For this reason, the technique is only sufficiently exact for short planning horizons, and it must be repeated at regular intervals. To be able to work to schedule in subsequent periods, any scheduled operations must be completed during this period. The technique does not allow reactive replanning locally.
  • The level of goods in process is of secondary importance, both financially and with respect to volume. The planner monitors and adjusts the queues upstream of the work centers. Capacity is relatively inflexible, however, so orders must be held back, i.e., not released in good time. With long lead times in particular, however, order release can occur at the first identification of a bottleneck. This will physically hold up the production plant. Choosing a “neutral” priority rule will distribute the delay more or less evenly among all the orders.

The following are the typical areas of application:

  • For batch production over a long period or in a monopoly situation; that is, in a seller’s market. In such cases the date of delivery, for example, to the end products store or to the customer, is less important. Some typical industries that belong here today are the chemical and food processing industries and niche capital goods markets.
  • The operations-oriented finite loading technique simulates a situation that may arise in job shop or even line production. The operations for an order are executed in a more or less random order, in competition with other such orders. For execution and control of operations, this type of planning provides a process simulation for the coming days and weeks; that is, an actual working program for the shop floor.

Course section 14.3: Subsections and their intended learning outcomes