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

15.1.3b Corma, Part 1: Criterion for early order release, and Part 2: Scheduling technique for control of operations.

Intended learning outcomes: Identify the calculation of anticipation time in the stochastic case. Explain the critical ratio of an order.

Continuation from previous subsection (15.1.3)

Corma, Part 1: Criterion for early order release. The planner regularly checks the loading of generally well-utilized capacity. As soon as short-term unused capacity is discovered, he checks on the availability of the products manufactured using this capacity. A work center where-used list can provide essential information for this first step. It is as if capacity is on the lookout for an order (hence, the term capacity-oriented materials management). If an “agent” is assigned to each capacity, agent-based systems may also be applied here.

In practice, it often happens that a particular product family is manufactured in a group of just a few work-centers. If one of the work centers of this group — in particular the gateway work center that performs the first operation of a particular routing sequence — is not being utilized, quite often the others are not in use either. An early order release thus usually means that several operations can be performed in advance.

Which of the products thus identified are candidates for early order release? The planner finds the answer by calculating the anticipation time for each possible item.

The anticipation time for an item is the time that will probably elapse before a production or procurement order must be released.

Figure provides a formula for determining the articles that are candidates for an early release in the deterministic case. It takes into consideration all known transactions in the near future.

Figure shows a graphical represen­tation of anticipation time in the stochastic case. This is the time expected to elapse before inventory falls below its order point, assuming average usage for the near future.

Fig.       Anticipation time in the stochastic case.

Figure shows the formula for calculating the anticipation time.

Fig.       Calculating anticipation time in the stochastic case.

If there is more than one candidate for early order release, the product having the shorter anticipation time gains priority. Clearly, software can aid the planner in efficient calculation and decision-making.

Corma, Part 2: Scheduling technique for control of operations. New customer orders continu­al­ly alter the workload. They also “hinder” the progress of stock replenishment orders, and vice versa. In this situation, the planner continually reassigns the priority of all orders in process by estimating order slack times. A rough-cut estimation of order slack time is the following critical ratio.

The critical ratio of an order is obtained by dividing the time left until the order due date by the standard lead time of work left on the order.

A ratio < 1.0 indicates that the order is behind schedule; a ratio > 1.0 indicates that the job is ahead of schedule. The lower the result, the higher the order urgency in sequencing the operations of the order compared to those of other orders. Generally, the critical ratios of the orders can be obtained by an inquiry of the order database. The planner transfers a resulting priority to the production order as soon as he considers the difference compared to the actual order priority to be significant. As a result, this technique either accelerates or slows down the orders. It gives priority to early-released orders only when needed.

A more detailed and accurate measure of order urgency is obtained by implementing probable schedulingfor shop floor control. Here, the key is the calculation of a suitable lead-time-stretching factor. See Section 13.3.6. This factor is a more accurate measure for the order slack time than the critical ratio of the order, as it is defined as a numerical factor by which only the nontechnical inter­operation times and the administrative times are multiplied. Since the technical process itself determines the duration of operations and the technical inter­operation time, we can only modify slack time by increasing or reducing either the nontechnical inter­operation times or the administrative times.

Continuation in next subsection (15.1.3c).

Course section 15.1: Subsections and their intended learning outcomes

  • 15.1 Order Release

    Intended learning outcomes: Describe order proposals for production and procurement as well as order release. Explain load-oriented order release (Loor) and capacity-oriented materials management (Corma).

  • 15.1.1 Order Proposals, Order Release for Procurement and Production

    Intended learning outcomes: Describe the reasons for order proposals for production or procurement. Differentiate between the dealing of order proposals for C items and of other items. Explain purchase order release. Explain production order release and describe the availability test of resources.

  • 15.1.1b Production Order Release: Allocation, Staging, Accompanying Documents and Container Logistics

    Intended learning outcomes: Disclose issues linked with allocation and staging. Identify accompanying documents such as the traveling card and container logistics such as the two-bin inventory system.

  • 15.1.2 Loor — Load-Oriented Order Release

    Intended learning outcomes: Produce an overview on the principle of the technique and the planning strategy. Describe the regulator analogy for load-oriented order release. Differentiate between time filter and load filter.