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

14.3.2 Order-Oriented Finite Loading

Intended learning outcomes: Produce an overview on the technique (the algorithm) for order-oriented finite loading. Describe various priority rules as well as dealing with exceptions.

Depending on the technique that is used, order-oriented finite loading achieves maximum capacity utilization or ensures that as many orders as possible are executed on time with low levels of goods in process.

Overview: Orders are scheduled in their entirety, one after the other, in the time periods. If the period begins with an empty load, any orders that have already started are scheduled first, and only those operations that have not yet been carried out are considered.

Planning strategy: The objective is to find priority rules that will enable as many orders as possible to be completed. Special attention is given to those orders that cannot be scheduled, and whose start and completion dates must be modified as a result.

Technique: The planning horizon is once again divided into time periods. Individual orders (and all their operations) are scheduled in the order determined by the specified priority, without intervention by the planner. If the capacity limit for an operation is already exceeded, there are three possible responses: load the operation, defer it, or refuse the order. Once every order has been either planned or rejected, the planner handles the exceptions. The algorithm then attempts to plan rejected orders or those whose completion dates have been altered. Figure illustrates the principle of the resulting algorithm.

Fig.       Technique (algorithm) for order-oriented finite loading.

The details of the individual steps of the algorithm are as follows:

Determine the orders to be scheduled and treat them according to priority; typical orders are, firstly, all orders already begun (we know what operation is waiting to be carried out next from the order progress data;[note 1408] all outstanding operations should be scheduled), and, secondly, all orders not yet begun whose start dates lie within an arbitrarily chosen time limit (this limit defines the anticipation horizon, which should ideally be smaller than or equal to the planning horizon; the start date should also be set or calculated using a scheduling method).

The possible priority rules are similar to those presented in Section 14.3.1, although here they apply to the entire order and not just to the individual operations:

  • Proximity of the start date for the order (orders with fixed start dates can be loaded first)
  • Proximity of the order due date (EDD, earliest due date)
  • Ratio “remaining lead time for the order divided by the time still available for the order” (SLK, shortest slack time rule, » order urgency; see Section 13.3.6)
  • Ratio “remaining lead time for the order divided by the number of remaining operations”
  • (External) order priority
  • Any combination of the above

Handle and load operations in order: All operations are loaded at the corresponding work centers for the time period in question, working forward, beginning with the earliest start date, or backward, beginning with the latest completion date. Inter­operation times are also considered, but queue times are not.

Deal with exceptions: If an operation falls within a time period during which the associated work center’s capacity is already fully utilized, the following three possibilities can be applied:

a.    Load without considering available capacity: This option is suitable for orders already begun or for relatively short operation times. Some general reserve capacity is thus kept free for the latter operations.

b.    Defer the operation until the next period with available capacity (defer with forward scheduling, move forward with backward scheduling).

c.    Unload the entire order, to give priority to other orders.

Deal with all exceptions that could not be handled earlier: If the steps described above have been carried out for all orders, the following contingencies requiring action may arise, depending upon which exception rule is applied:

a.    For every capacity that is overloaded in a particular time period, either provide more capacity or unload orders accordingly.

b.    (1) Backward scheduling: The resulting latest start date for an order lies before the earliest start date. Unload this order and then try again using forward scheduling, beginning with the earliest start date. (2) Forward or probable scheduling: The resulting earliest completion date for an order lies after its latest completion date. If the order due date is flexible, defer the order accordingly. Other­wise, it may be necessary to deliberately increase the fully utilized capacity to first unload the order.

c.    For every unloaded order: It may be possible to bring forward the start date. If the order due date is flexible, defer the order. If there is at least a bit flexible capacity in case of elsewise full utilization, it may be increased accordingly.

The unloaded orders are then scheduled in another iteration of these steps of the algorithm. This technique could quite conceivably be applied interactively, that is, “order by order”: If an operation falls within a time period in which the capacity limit is already exceeded, the planner can immediately decide on the appropriate action.

Continuation in next subsection (14.3.2b).

Course section 14.3: Subsections and their intended learning outcomes