Intended learning outcomes: Present the overall objective of scheduling and capacity management. Disclose to which extent capacity can be stored.
Continuation from previous subsection (5.3.3)
The overall objective of scheduling and capacity management is to balance load arising through orders with capacity available to process those orders. Figure 5.3.3.2 shows a chance-produced situation through the course of time (above) and, in contrast, an idealized conception of the possible result of planning (below).
Fig. 5.3.3.2 Objective of time management and scheduling and of capacity management: balancing load with capacity available.
The problem to be resolved is basically the same in any of the temporal ranges of planning & control. However, the measures taken for capacity planning — such as procuring additional capacity — are very different in master planning and detailed planning and scheduling.
- In long-term planning, the company can procure additional production means, such as production facilities or persons. In addition, it can make comprehensive arrangements to subcontract to the outside. Or, if capacity must be reduced, this can all be accomplished in reverse.
- In medium-term planning, on the other hand, a company will attempt to gain at least some measure of flexible capacity through scheduling overtime or arranging rush subcontracts to the outside. Medium-term planning, however, cannot correct major errors in long-term planning. These planning errors result in late deliveries.
Capacity is a potential factor. Can capacity be stored? A firm may think that this can be accomplished by producing ahead, thus creating inventory. However, inventory cannot be reconverted into capacity. Therefore, the firm has to be very sure to produce ahead only items that will be used within a reasonably short time frame. There are capacity management techniques that use this strategy, such as Corma. In other cases, however, producing ahead in order to “store capacity” may simply be a manifestation of a “just in case” mentality. As a result, the wrong items will be produced, and eventually the capacity is lost.
Somewhat “storable” is capacity in the form of personnel — if employees’ presence along the time axis is somewhat flexible. For instance, say that an employee has to work only five hours instead of the usual eight on a specific day. If she or he is willing to go home but to work the three hours on another day where there is overload, you could say that three hours of capacity were stored. While this strategy is quite common, it is very limited with regard to the total capacity. Moreover, a company normally has to pay for the flexible capacity of the workforce.
Generally, capacity cannot be stored effectively. Because this is so, planning must address two dimensions simultaneously; capacity (quantity axis in Figure 5.3.3.2) and dates (time axis) must be planned together.
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).
