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).
Continuation from previous subsection (5.3.4)
The following describes infinite loading techniques. Infinite loading is frequently the best capacity planning method. In many companies, it is possible to modify labor capacities within one day by more than 50%.
- Order-oriented infinite loading aims to achieve a high delivery reliability rate, or to meet the due date for production or procurement orders. In favor, overcapacity is often maintained intentionally. After scheduling (backward or forward, for example) all the orders, each scheduled operation represents a load at the specified work center and in the time period containing its start date. The sum of all these loads is compared to the available capacity for each time period. This yields load profiles showing the overcapacity or undercapacity for each work center and time period. The subsequent planning then attempts to balance capacity against load. This technique for infinite loading is also called capacity requirements planning (CRP), particularly in connection with software for capacity management. Some variations of CRP also exist. See Section 14.2.
- Kanban and the cumulative production figures principle (CPFP) were introduced above in Section 5.3.2. These two simple materials management techniques serve at the same time as simple capacity management techniques. Execution control by the Kanban technique is a form of infinite loading. It assumes a very high level of flexibility of capacity in the immediate term. See Sections 6.3 and 6.4.
- Order-wise infinite loading (order for order, individually): For firms handling small numbers of high-value-adding orders, such as for the production of special-purpose machines, planning takes place after loading each new order, or even after each new operation. As soon as an overload is detected, all work centers are checked, and load and capacity are adjusted until a feasible schedule is obtained. See Section 14.2.
The following describes finite loading techniques:
- Operations-oriented finite loading aims to minimize the average delay of the production orders. The individual operations are planned time period by time period on the basis of orders, starting from the start date determined by lead-time scheduling. This means establishing meaningful rules of priority for the sequence in which operations are scheduled (sequencing rules), with the aim of achieving maximum throughput. The queues waiting upstream of the work centers are monitored and adjusted. This type of planning provides a process simulation for the coming days and weeks, that is, an actual working program for the shop floor, according to the planning horizon. See Section 14.3.1.
- Order-oriented finite loading ensures that as many orders as possible are executed on time with low levels of goods in process. Orders are scheduled in their entirety, one after the other, in the time periods. The objective is to find priority rules that will enable as many orders as possible to be scheduled. Those orders that cannot be scheduled for completion on time by a computerized algorithm are highlighted for attention by the planner, who may decide to change order completion dates. See Section 14.3.2.
- As bottlenecks control the throughput of a production system, constraint-oriented finite loading plans orders around bottleneck capacities. It follows a theory of constraints (TOC) approach. An application of this is drum-buffer-rope. Work centers feeding bottlenecks are scheduled at the rate the bottleneck can process. A time buffer inventory should be established before the bottleneck. A space buffer should be established after the bottleneck. Work centers fed by the bottleneck have their throughput controlled by the bottleneck. See Section 14.3.3.
- Load-oriented order release (Loor) has high load as its primary objective. Equally important are its secondary objectives of low levels of work-in-process, short lead times in the flow of goods, and delivery reliability. The aim of Loor is to adapt the load to the capacity that is actually available. Thanks to a heuristic, the matching of load to capacity can be limited to one time period. See Section 15.1.2.
- Capacity-oriented materials management (Corma) plays off work-in-process against limited capacity and lead time for customer production orders. Corma makes intelligent use of capacity that is generally fully utilized, but available short term, by releasing stock replenishment orders earlier than needed. Thus, Corma follows the natural logic of production management as it is implemented in practice in many medium-sized companies that view stock replenishment orders as “filler” loadings. However, the benefit of improved utilization of capacity demands a price, as work-in-process increases. See Section 15.1.3.
- Order-wise finite loading (order for order, individually): In practice, this can be considered to be identical to order-wise infinite loading, with more flexibility in time axis.
All of these techniques can be used independently of company-organizational implementation of planning & control. Thus, they can be found in software packages of many kinds (ERP software or electronic control boards [Leitstand], simulation software, and so on). In one and the same enterprise, it is quite possible that the company will use different techniques for short-term planning and long-term planning.
Exercise: The animation groups techniques for scheduling and capacity management in nine sectors in dependency upon quantitative flexibility of capacity and flexibility of the order due date.
If you press the plus button, you will be able to see a definition. When you roll over some sectors, you might be able to see an example about it.
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).
