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

15.1.3d Corma: Example and Evaluation

Intended learning outcomes: Present an example and an evaluation of the technique. Identify its limitations and typical areas of application.

Continuation from previous subsection (15.1.3c)

An example: Trox Hesco Corp. (Rüti, CH-8630, Switzerland). Trox Hesco (200 employees) develops, produces, and distributes ventilation products, such as air diffusion lattices and fire dampers. Trox Hesco manufacturing is based on high competency in a relatively small number of production processes. 500 different stock line items make up approximately 60% of sales volume. The same items, but made-to-order according to customer require­ments with respect to dimension, color, and so on, make up the other 40% of sales. Product structures and routings are of moderate complexity, with one to two production stages and about a dozen items in the bill of material and fewer than a dozen operations per stage.

As customer tolerance times are short, planning & control gives high priority to special cus­tomer orders. At the same time, however, stock replenishment orders must also be completed on time to prevent shortages. Stock replenishment orders can therefore compe­te with special customer orders. As demand for stock items is variable, the stock depletion date estimated at the moment of order release must now be verified. This allows determination of the priority of the replenishment order. While segmentation of the two production processes would make for simple logistics, this flexible planning & control of resources enables Trox Hesco to make use of the same production infrastructure for both modes of production.

Assessment of the technique and organizational considerations: Prerequisites for Corma:

  • The increase in work-in-process, which results from the early release of stock replenishment orders, must be feasible economically and manageable in terms of volume. Corma does not result in premature inventory in stock, however.
  • Early order release has to be possible to a sufficient degree. Orders that are released early are stock replenishment orders or customer production orders that start in advance of the latest start date.

There are some limitations involved in applying Corma:

  • The focus has to be on a more balanced utilization of capacity, not maximal utilization. Load fluctuations will remain.
  • Planners “on site” must be able to deal with constantly changing order inventories. They have to understand how to make the best use of the Corma recommendations, which may entail changing the sequence of operations that Corma proposes to accommodate additional, situation-specific information known to the planner.

Therefore, Corma is useful for the following areas of application:

  • in addition to mixed production, in all cases where due dates must be met and, nonetheless, the
    system must be robust in the face of errors in planning dates or alterations in orders on hand;
  • for self-regulating shop floor control (for mixed-mode manufacturers, for example), assuming that the data collected on order progress are precise enough. Because the basic premise of Corma is a constantly changing order backlog, it is robust enough to handle situational planning “on the spot,” which in this case is desirable;
  • as a self-regulating system for short-term materials management. Owing to its conti­nuous coupling with materials management, an order may change its latest comple­tion date multiple times. A stock replenishment order may change its completion date up to the moment when inventories fall below the safety stock. From that moment onward, the replenishment order must be assigned to ongoing customer orders, since the replenishment order will serve to cover such customer orders. Since customer orders must have confirmed due dates that can no longer be changed, the replenishment order must also be given a fixed, or definitive, latest completion date.

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.