Laboratory for Machine Tools and Production Engineering ... · Laboratory for Machine Tools and Production Engineering Chair of Production Engineering ... Order coordination Inventory

Production Management A – Winter Semester 2008/09

Operations Control P. 0

Lecture 07

Laboratory for Machine Tools and Production Engineering

Chair of Production EngineeringProf. Dr.-Ing. Dipl.-Wirt. Ing. G. Schuh

Production Management A

Lecture 07

Operations Control

Organisation:

Dipl.-Ing. oec. Jerome Quick

Pontdriesch 14/16Room 210

Tel.: [email protected]



Lecture 07

Index:

Index Page 1

Schedule Page 2

Glossary Page 3

Target of this lecture Page 4

Lecture

Introduction of the tasks of operations control Page 5

Challenges of operations control Page 11

Methods and strategies of operations control Page 16

Questions Page 38

Bibliography Page 39



Lecture 07

Schedule:

No. Date Responsible

V1 20./21.10.2008Mr. Haag

� 0241 89 04275

V2 27./28.10.2008Mr. Nollau

� 0241 89 04271

V3 03./04.11.2008Mr. Jung

� 0241 80 27392

V4 10./11.11.2008Mr. Bartoscheck

� 0241 80 28203

V5 17./18.11.2008Mr. Pulz

� 0241 80 27388

V6 24./25.11.2008Mr. Ivanescu

� 0241 80 20394

V7 01./02.12.2008Mr. Quick (fir)

� 0241 47705-425

V8 08./09.12.2008Mr. Helmig (fir)

� 0241 47705-435

V9 15./16.12.2008Mr. Deutskens

� 0241 80 27380

V10 05./06.01.2009Mr. Kuhlmann

� 0241 80 28197

V11 12./13.01.2009Mr. Baumann

� 0241 80 28398

V12 19./20.01.2009Mr. Ziskoven

� 0241 80 27378

V13 26./27.01.2009Mr. Gaus

� 0241 80 28477

Technology Management II

Variant Management

Process Planning

Topic

Technology Management I

Product Planning & Engineering

Planning for Manufacture & Assembly

Production Strategies

Prozess Modelling

Operations Management

Materials Management

Lean Production - Production Systems

The Industrial History: From Taylorism To Virtual Factory

Buisness Modelling



Lecture 07

Glossary:

Kanban Kanban is a production control method

using the pull control principle that

makes permanent intrusions of a central

control unit unnecessary. It is solely

oriented at the customer demand.

Lead time scheduling Lead time scheduling establishes the

chronological coherence between

production orders. By stringing together

all production orders that correlate due to

their bill of materials, a time schedule is

drawn to express these correlations.

Load-dependent order release Load-dependent order release (BoA) is

based on a rough-cut scheduling and

availability check. A separation of urgent

and not urgent production orders results

from rough-cut scheduling. It is further-

more checked for every urgent order if

their dispatching would lead to an

overload of necessary resources.

Operations control Operations control includes the

arrangement monitoring and guaranteeing

of quantity, deadline, quality and costs.

Production Planning & Control Production Planning & Control (PPC)

comprises the whole technical order

processing going from quotation to

consignment. Its planning and control

functions thereby touchthe departments

sales, engineering, purchasing,

production, assembly and consignment.

Throughput time The throughput time of an order is defined

as the sum of machining-, transport-,

control-, and queuing times.



Lecture 07

Target of this lecture:

The main objectives of the lecture „Operations Control“ are:

• Getting an overview of tasks and goals of operations control

• Understanding problems and challenges regarding operations control

• Becoming acquainted with methods and strategies of operations control

• Push- and pull control

• Production requirement planning

• Lead time order- and capacity-based scheduling

• Capacity management

• Release strategies

• Kanban-method as an example of pull control

• Throughput time reduction



Lecture 07

page 5© WZL/FIR

Structure

Introduction of the tasks of operations control1

Challenges of operations control2

Methods and strategies of operations control3



Lecture 07

page 6© WZL/FIR

Short content of the lecture

� Introduction of the tasks of operations control– Tasks and objectives of operations control will be defined and classified in the context

of production planning and control (PPC).

� Challenges of operations control– The basic challenges of operations control will be specified and clarified with case studies.

� Methods and strategies of operations control– In the main part methods and strategies of operations control will be introduced.

– Focus:� Push and pull order release� Flow scheduling� Capacity balancing and capacity smoothing� Load-dependent order release (BOA)� Priority rules for order release� Kanban� Dimension of time in operations control



Lecture 07

page 7© WZL/FIR

Definition of Operations Control

Costs Minimization by Optimization of

Production-Economical Objectives

- High Due-Date Reliability

- Short Lead Times

- High Capacity Utilization

- Low Shelf Inventories and Float

Floor

Stocks

- High Service Level

- High Flexibility

- Constant Capacity Load

- High Level of Information

- ...

Operations control:Operations control includes the arrangement for, the monitoring and

guaranteeing of quantity, deadline, quality, and cost

- Creation of programme and order

- Determination of demand

- Determination of deadline

- Staging and task distribution

- Quantity and deadline

- Quality

- Budget accounting

- Working conditions

- Intervention and modification to

planning

- Quality management

�

Targe

t statusActual

status

Arrangement

Monitoring

Guaranteeing

ObjectivesTasks



Lecture 07

page 8© WZL/FIR

Tasks of Production Planning & Control (PPC): The Aachen PPC-Model

In-plant production planning and

control

Procurement planning and

control

Data management

Production program planning

Production requirements planning

Network configuration

Network marketing

Network requirement planning

Network Tasks Cross-sectional tasksCore tasks

Ord

er

co

ord

inati

on

Inven

tory

Man

ag

em

en

t

PP

C-C

on

tro

llin

g

(source: Schuh 2006)

Notes:

The function of the Production Planning and Control (PPC) is the time, capacity and

quantitative planning and scheduling of the production and assembly (Eversheim 1989).

Whereas the production planning has to organize the content and the single processes of the

production and assembly, production control has to organize the operations in the production

within the scope of order processing. The production control takes input from the production

planning regarding the process sequence and associated logistics objectives.

The focus is on the company internal planning and control processes. Due to diverse customer

demand, globalisation of procurement, sales markets, substitution of goods and the increasing

process of globalisation, companies are under immense pressure to strengthen and focus on

value adding processes in the whole supply chain. To cater this growing integration in the

supply chain, the Aachener PPS Model has introduced in the network to manage the

dependence.

The tasks of production planning and control can be divided into core tasks and cross-sectional

tasks. While core tasks advance the order processing, cross-sectional tasks aid to integrate

and optimise the production planning and control.

Core tasks are long term production programme planning, medium term production

requirement planning, short term in-plant production planning and control and short term

procurement planning and control. Cross-sectional tasks are order coordination, storage and

the controlling of the ERP system itself.



Lecture 07

page 9© WZL/FIR

ERP Workflow (“Aachener PPC-Modell”)

Pro

cu

rem

en

t m

ark

et

Customer order entry

Sa

les

ma

rke

t

Forecasting


Production requirements planning

In-plant production planning and control

Procurement planning and control

Procurement program

In-plant production

program

Production program

Requirements program

Dispatch handling

Storage

CostingPay

calculationQuality

inspection

Construction/ Work scheduling

Ord

er

co

ord

inati

on

Notes:

During the planning process, resources are planned with increasing level of detail and

decreasing planning horizon. The results of a planning step are input for the next step. Planning

information is fed forward to the next planning step with the aid of a control loop. The core tasks

of PPC can be shown in a flowchart.



Lecture 07

page 10© WZL/FIR

Subdivision of functions of the PPC/ERP

(source : Luczak, Eversheim, 1997)

Primary requirement planning

Sales planning

Resource planning

Net secondary requirement determination

Production requirement planning

Gross secondary requirement determination

Allocation of kind of procurement

Capacity requirement calculation

Lead time scheduling

Capacity adjustment

Fine scheduling

Self-manufacturing planning and control

Lot sizing

Detailed resource planning

Disposability planning

Sequence planning

Order enabling

Offer evaluation

Order invoice

Vendor selection

Subscription enabling

Operations planning

Materials management


Procurement planning and control

Notes:Operations Control includes methods which are necessary for the processing of orders

according to the results of work scheduling. One factor that influences operations control is the

kind of dissolution of orders. In addition, the tasks of operations control are influenced by

products, procurement, workflows in manufacturing and assembly and by customer changing

priorities during manufacturing.

Inspite of the different characteristics of the specific factors in different companies, core tasks

and cross-sectional tasks of operations management can be identified in a universal concept.

Core tasks are production programme planning, production requirements planning, in-plant

production planning and control and procurement planning and control.



Lecture 07

page 11© WZL/FIR

Structure






Lecture 07

page 12© WZL/FIR

Multi-dilemma of operations control

Equal & high workload:

- High inventories

- Low capital

- High order capacity

Low capital commitment:

- Low stock of material

- short lead time

High date of delivery loyalty:

- High inventories

- High stock of material

- Low workload

Short lead time:

- Low stock of material

- High capacity

- Low workload

Lead time On-time delivery

Workload

Transfer tocapital lockup

Notes:Two challenges must be taken into account within the multi-dilemma of operations control:

• Conformity between workload in production (by customer orders respectively market specific

orders) and own capital commitment

• Adjustment of lead time of production orders with the scheduled delivery date. At this

point,´the waiting within the lead time and the delivery date should be considered



Lecture 07

page 13© WZL/FIR

Co-Ordination Materials Management / Assembly Control

100 %

(Example company)(source: Stolz)

70 %

17 %

27 %

56 %

17 %13 %

≤≤≤≤ 2months

> 5months

2 - 5months

Quantity of object numbers

Inventory value

100 %

91 %

Troubles in total

Missing parts58 %

Production faults19 %

Engineering faults14 %

Wrong parts4.5 %

Pre-assembly faults3 %

Other faults1.5 %

material

Total number: 13,944

Breakdowns in assembly Structure of inventory

Notes:Operations Control and Materials Management can not be separated in the handling process of

production assignments. The coordination of the non-physical information flow with the

associated physical flow of material is the core challenge of an effective production planning

and scheduling.

A lack of coordination between materials management and production & assembly scheduling

will result in a disturbance of the assembly even though high stock levels are available. These

disturbances increase with an increase of variety and complexity of the products in combination

with variation of demand.

In the graph is shown that 91% of production disturbances are caused by material problems,

despite of the high inventory level (the stock suffices for 70% of the code numbers for more

than 5 month). It is significant that 53% of the material conditional disturbances are due to

missing parts. A better coordination between inventory management and assembly control can

therefore reduce both the disturbance quota and inventory.



Lecture 07

page 14© WZL/FIR

Rough planning

short

m

ediu

m lo

ng

low

m

ed

ium

hig

h

Creation of

production

order

Requirements

explosion and

material

planning

Detailed capacity

planning

Work

distribution

Throughput

and capacity

scheduling

Creation of

shop-floor

order

Programme planning

Order planning

Production

order

Shop-floor

order

Planning horizon

Planning intensity

Customer

order

Detailed planningMedium-term planning

„Informational Gap“

„EffectivityGap“

t

Planning Tasks and Levels of Operations Control

(source: Brankamp)

Operations Control

Notes:Production control is taking charge of the results of the production program plan as well as

production requirement planning. Manufacturing orders as well as primary and secondary

needs are available and contributed during the first step of job processing control, lead time and

capacity scheduling.

Graded planning is carried out on several levels in order to keep the large volume of data under

control. For planning on higher levels, aggregated data is used; planning on higher levels has a

longer planning horizon. In contrast, planning on lower levels is short-term planning, but uses

detailed data.

Two basic planning problems arise. The "information gap" exists in early planning phases since

enough information for a more intensive and therefore more detailed planning is not available

yet. The "effectiveness gap" during the later fine planning expresses that detailed data for the

planning is existing but the intervention possibilities are restricted due to the temporal

closeness to the start of production.



Lecture 07

page 15© WZL/FIR

Types & Framework of Orders for a Mechanical Engineering Company

(source: Traub, 1991)

~~

~

Customer order

120,000 / year100Assembly processes:

18,000 / year15Assembly orders:

1.2 mio. / year1,000In-house production

parts:

3 mio. / year2,500Outsourced parts:

Yearly requirements:Framework of orders for one machine:

Production order

Shop-floor orderParts production

Shop-floor orderAssembly

1,200 Customer orders / yr.350 Machine types / yr.

Purchase order

Notes:The difficulties of operations control are caused by a high number of different parts to be

produced and obtained. A high number of orders which must be coordinated with regard to her

completion appointments and capacity requirements results from it.

This problem is found particularly with complex products and customer-specific production.

Normally there are so many operations necessary that even a mid-sized company needs the

support of a PPC-system for its operations control.



Lecture 07

page 16© WZL/FIR

Structure






Lecture 07

page 17© WZL/FIR

Characteristics of Order Types for Operations Control

Order types

Customer-anonymous

• Delivery ex stock

• Customer-anonymous production and assembly of lots for stock

• No customer demands

Customer-specific

• Delivery after running through engineering, operations planning, production, and assembly

• Nearly no stock or lot production

• All customer demands

Mixed

• Delivery determined by assembly time

• Production of basic components for stock, customer-specific production and assembly of variants

• Customer demands within the framework of combination

(source: Wiendahl) see also PMA L8 „Material Management“

Notes:Based on the product and the present market situation, there are different types of solutions for

an order. A producing company that needs to provide its goods on a continuous basis, will

standardise its products and keep a high stock level. This results in a high level of capital costs.

With an increasing customer orientation, the demand of time and capacity planning rises. The

companies focus is to meet the delivery date on time.



Lecture 07

page 18© WZL/FIR

Principles and Characteristics of Push-Pull Control

Storing of components

Job progress

Push

Push

Storing of customer-

independent products,

sale ex stock

Sale of customer-

specific products

Sale of customer-

specific products

Material procurement

according to production

programme

Customer-specific

material procurement

Material procurement

according to production

programme

Legend:

Direction of flow transferred by operations management

Push

Pull

Pull

Delivery period Capital tie-up

Notes:The application of various methods depends on the product and/or order structure.

The different types of the order triggering require different mechanisms of operations control. One distinguishes basically in Pull and Push control (Wiendahl):

1. Pull control (Pull)

Aim: Guarantee of the availability of a certain quantity within one period of time

Features: Order release triggered by a customer demand in direction of the material flow; Orders without closing date and job number; Synchronization of input and output

2. Push control (Push)

Aim: Focus on completion on schedule

Features: Order release triggered by a superior planning level; Orders with closing date as well as job number; No synchronization of input and output

The limits of Pull and Push control circles have to be established specifically for every enterprise in dependence of capital relationship and desired delivery time. The structuring of products into assemblies and components without variant influence (neutral assemblies) supports the specification of these limits. Superordinated planning functions for long and short term planning are frequently affected by the push-principle and with approaching the start of production they are supplemented with control systems based on the pull principle



Lecture 07

page 19© WZL/FIR

Effects of Push Control

(Example company)

Control flow (push control)

Control flow (pull control)

Market

Forecast

Order management

Purchasing

Supplier

Production

High inventories in case of bad availability of material

Inventory

Assembly

Order

PUSH

CONTROL

Notes:The application of the Push control principle means that a high inventory is necessary to make

a custom-designed final assembly possible. This inventory grows with the increase of the

diversity of variants since all variants must be on stock to meet the customer requirements.

Since the planned inventory depends strongly on the quality of the forecast of the customer

demand, an overestimation of the demand causes a very high inventory level. If the forecast

values are below the actual demand, a low inventory leads to low material availability.

Therefore the choice of the right forecasting method for the respective products is of great

importance (compare PMA L8 “Material management").



Lecture 07

page 20© WZL/FIR

Expansion of Pull-Controlled Production Volume (example)

JIT = Just in time

Control flow (pull control)

Assembly

Pre-assembly

Final assembly

Order

Market

Forecast

Purchasing

JIT

Reduction of inventory of up to 30% with

simultaneous increase of availability of material

PUSH

CONTROL

PULL

CONTROL

Control flow (push control)

DEMAND-ACTUATED

CONSUMPTION-DRIVEN

Supplier / Cost centre Pre-assembly

Synchronised inventory

Notes:A synchronised assembly increases the planning flexibility in production and results in lower

stock levels in the assembly area. It is useful to implement this measure if the assembly

requires time and if high part value and/or part volume is involved.

For example: air plane production: Supply of jet engines as late as possible

The assemblies and components which are necessary for the assembly are divided up into

stock classes. They are manufactured (push controlled) without any direct relation to a

customer order but according to there different use frequency. The corresponding variants are

produced custom-designed (pull controlled) in the assembly from the stored assemblies and

parts. The pull controlled assembly makes a lower inventory possible since only assemblies

and parts must be stored.

The interface between pull and push control is called order penetration point.



Lecture 07

page 21© WZL/FIR

Tasks of the production requirement planning

Production Program

Secondary demand planning

Gross secondary demand

Net secondary demand In stock components

Flow scheduling

Product structure Effective date for capacities

Technological requirements

Capacity demand Balancing/AdaptationCapacity

availability

Capacity planning

Requirement Program

70x

210x

50x

80x

20h Sawing

6h Drilling

10h Millcuttling

2h Sawing

6h Drilling

12h Millcutting

Materials management

Notes:The input information for the production requirement planning is the production plan. The

production plan is the result of the production program planning. For a certain planning horizon

for example a year the monthly lot size of the products or product parts are listed (planning

pattern). The task of the production requirement planning is to secure the production program

with adequate procurement programs. The considered resources (production factors) are

production facilities, material (secondary demand), personal, transportation devices etc. that

means everything that a production process incorporates.

Secondary demand planning calculates the actually needed amount of raw materials, parts and

groups and matches them with the appropriate procurement type (in house production/outside

supply). Finally the classical tasks of time management (lead time scheduling and medium

range capacity planning) occur. These are the basic tasks of operations control and are the

basis for the short term planning of in house production.



Lecture 07

page 22© WZL/FIR

Order- and capacity-based scheduling

A

B

C

Deadline overview Deadline overview

Phase 1

(Focus: work-piece)

Phase 2

(Focus: machine)

Order-based scheduling Capacity-based scheduling

Deadline plan

Order 1

1.1, 1.2, 1.3

Deadline plan

Order 1 1.1, 1.2, 1.3

Order 2 2.2, 2.3

Order 3 3.1, 3.2, 3.3

1.1

1.2

1.3

Lead time for order 1

Work

sys

tem

s

Deadline

A

B

C

1.1

1.2

1.3

Lead time for order 1

Deadline

3.1

2.2 3.2

2.3 3.3

Notes:When setting the dates for customer-oriented production, the start and completion dates for

each step (operation) must be determined with the due date in mind. Various types and

methods of date-setting are used.

Within order-oriented scheduling, only the data relating to one order is taken into account. The

basic scheduling methods (e.g. forward and back-ward scheduling )

Within capacity-oriented scheduling, the mutual dependency between orders and therefore

between capacity limits is considered.

As a rule, at first order-oriented then capacity-oriented scheduling is conducted.

The results of lead time scheduling within production requirement planning are basic dates

related to capacities respectively capacity groups. Later the actual state of charge can be taken

into account (Wiendahl 1989).



Lecture 07

page 23© WZL/FIR

Lead time scheduling

Legend: Setup Time Operation Time Transitional Period

Combined SchedulingForward SchedulingBackward Scheduling

Distribution of Schedule Deviations

• Starting point is a fixed final date

(e. g. desired delivery date of the

customer)

• Calculation of the latest possible start

date backwards from the final date

• If the calculated date is situated in the

past, methods will be applied to reduce

the lead time

• Starting point is a fixed start date

• Calculation of the earliest possible final date

forward from the start date

• Problem: material will be ordered too early

⇒ Forward scheduling is only applied to

calculate the earliest possible delivery date,

afterwards the latest start dates (and

therefore order dates) are calculated with

help of backward scheduling

• Starting point is a fixed centre date

• Calculation of the latest possible start

date and the earliest possible final date

• If the calculated date is situated in the

past, methods will be applied to reduce

the lead time

• Application is useful, if the bottleneck

capacities have to be taken into special

account

Operations

Start Date (calculated)A100

A90

A80

A70

A60

A50

A40 backwards

Final Date (fix)

Time

Operations

A100

A90

A80

A60

A50A50

A40

Start Date (fix)

Final Date (calculated)

A70

Timeforwards

Operations

forwardsbackwards

A100

A90

A60

A50

A40

Start Date (calculated)

Final Date (calculated)

A70

A80

Time

Process Date for A90 (fix)

Notes:The (period based) supply orders and particularly the in-house production are planed in the

lead time scheduling. Therefore each process step has a fixed date according to the production

sequence. The lead time is comprised of the processing time (start up time and operation time)

and the waiting time (standby time before and after the processing, control time and transport

time). Depending on the planning method limited or unlimited capacities are taken into account

for the scheduling. The latter one means that the constraints of available capacities are not yet

considered. The planning basis for these tasks are work schedules and transfer matrices. In a

transfer matrix planned values of the inter operation time for each transfer from one workstation

to another workstation are listed. It can be differentiated between three different types of

scheduling:

• Forward scheduling: The earliest due date is calculated based on a fixed start date

• Backward scheduling: The latest start date is calculated to fulfil the contract on time

based on a fixed due date

• Combined scheduling: Based on a fixed starting point a forward scheduling into the

future and a backward scheduling into the past is done. It is possible to start with any

particular process when using the combined scheduling. For this process a fixed date

can be planned. This method can be used if additional considerations such as bottleneck

machine haves have to be taken into account.



Lecture 07

page 24© WZL/FIR

Altern

ative-

mac

hine o

ptions

Altern

ative-

mac

hine o

ptions

Lo

ad

Time

Technicalcapacity harmonisation

Time

Time-based capacity harmonisation

Time

Lo

ad

Altern

ative

mac

hine o

ptions

Machine A

Machine B

Machine C

Machine A

Machine B

Combination of technical and

time-based capacity harmonisation

Time- and machine-based harmonisation of capacity

Notes:Within capacity planning, the distribution of activities among the individual units of capacity is

optimised, under consideration of the load limitations. Capacity harmonisation and capacity adjustment are possible measures.

A further distinction is made between technical (e.g. parallel dispatching of an order on another

machine) and time-based capacity harmonisation (e.g. the same machine, but later

dispatching).

In industrial practice, time-based and technical capacity harmonisation operations are usually

combined. Normally, the time-based harmonisation is first, in order to retain optimum use of

capacity in terms of both engineering and cost. Placing an order with an external company

(extended work-bench principle) is a further option.



Lecture 07

page 25© WZL/FIR

occupied

free

Handling time

1. Cut within production


Transitional period Control period

Start-up of production A



Control period

Transitional period

Handling time

Start-up of production B

1. Day 2. Day 3. Day

1. Produktions-schnitt fürAuftrag B

2. Produktion-schnitt fürAuftrag B

Belegungdurch

Auftrag A

Belegungdurch

Auftrag C(Spittfaktor0)

Frei

Frei1. Produktions-schnitt fürAuftrag B

2. Produktion-schnitt fürAuftrag B

Belegungdurch

Auftrag A

Belegungdurch

Auftrag C(Spittfaktor0)

Frei

Frei1. cut within production for order B

2. cut within production for

order B

Occupied with order

A

Occupied with order C

(Split factor 0)

Free

Free

Cap

acit

y o

f m

ac

hin

e 1

Capacity management (PPC/ERP-system)

Notes:Handling time/ Transitional period/ Control period

Handling and control time mark constant values. Handling time is added before the start-up of a process operation, control time is added after the ending of an operation. Both factors do not occupy any capacity but they heighten the machining time.

The transitional period indicates a time exposure that arises from product transport within manufacturing from one workplace to an other or from an effort conditional on production after a process operation (e.g. cooling, drying etc.).

Split factor (cut within production)

If the temporal effort of production for one process operation cannot take place on a single work day because of lack of capacity or duration of the production, time has to be spread on one or several days. If such a splitting is not possible or only in parts because of production reasons, the splitting can be managed by depositing the split factor within the process operation.

Capacity factor

Usually, the basic capacity of a workplace is deposited within the machine group with 100% of the available time. This available capacity can be reduced because of external factors such as machine's cooling times, breakdown time, frequency and maintenance. Therefore, additional capacity reserves for critical situations can be created.



Lecture 07

page 26© WZL/FIR

Measures for adapting the capacity

Selection and execution of measures geared to adapting to capacity

Internal influencing factors

External influencing factors

• effectiveness

• duration

• internal priority

• external priority

• penalty

• labour market

• economic situation

Internal/ external alternative capacity

Overtime/ short-time working

K1

K2

K

Additional shift

2·K

K

InvestitionenInvestment

K

K´

K?

Notes:When the company-specific parameters change, e.g. expansion, acquisition of a new major

customer etc., the capacity harmonisation measures are generally not enough and it becomes

necessary to adapt capacity to the changed parameters.



Lecture 07

page 27© WZL/FIR

Tasks of In-House Production Planning and Control

In-House Production Program

Lot Size Calculation

Shop Floor Program

Large Inventory,

Non Flexibility

High Setup-Times

and Costs

Economical

Manufacturing Lots

for all Operations

Finite Operation Scheduling

Operations

Operation Times

and Transitional

Periods

Lead Time

Sequence Planning

Queue of

OperationsCapacity or

Capacity Group Optimised Sequence

of Operations

130 13x10

th tn

Sawing

Drilling

Millcut.

15s 6s

11s 8s

14s 12s

SawingDrillingMillcutting

Operations planning

Notes:The planning result of the manufacturing orders based on the production requirement planning

assures that the resources are available. The planned orders contain operations that are

executed in different manufacturing sectors. Trough a finite resource planning the availability of

the needed capacities can be secured. Capacity planning relies heavily on material

management to provide the raw materials as planned in production.

The internal production planning and scheduling particularises the guidelines of the available

material planning tolerance and the conversion is controlled. Manufacturing orders can be

splitted into different lots. The calculation of the optional lot size is another task of the

operations control (see PMA L8). The material planning tolerance is the difference between

earliest and latest start date of the production and the allocation of the quantities to the

manufacturing orders.

At the end of this planning the key task is to assign manufacturing orders to machines. The final

order release can occur in a variety of possible algorithms.



Lecture 07

page 28© WZL/FIR

Comparison of order release strategies

Release strategy

Inventory

Date

Push control principlePull control principle

Principle

Parameter

• Progress rate system (FZS)

• KANBAN

• Load-dependent order release (BOA)

• Material Requirement Planning (MRP I)

• Management Resource Planning (MRP II)

• Optimized Production Technology (OPT)

Notes:Different control strategies can be compared on the basis of control principle during the

materials allocation on one hand and the control parameters on the other hand. Detailing of

different release strategies will be discussed to a large extent in production management II.



Lecture 07

page 29© WZL/FIR

Load-dependent order release (BOA)

customer storage requirements

storage

knownbacklog

urgentbacklog

releasedbacklog

VH

regulative parameter “load limit"

(Parameter reading in percentage EPS)

EPS

regulative parameter "deadline"

(Parameter anticipation horizon

stock level

planned capacity

scheduling

Notes:

Load-dependent order release (“Belastungsorientierte Auftragsfreigabe”, BOA) is a stochastic

method. The controlling factor of this period-oriented method is the backlog in front of work

stations, which is continuously calculated. Only those orders which have to be finished within a

defined deadline are considered part of the urgent backlog. When an order is part of the urgent

backlog, it will be checked if its load dues fit within a defined load limit.

Indirect load dues will be considered with a reduced load due according to their reduced arrival

probability and their reduced load. If there is no capacity for any production step, the whole

order will be retained.

The advantage of the BOA method is the high flexibility in case of varying order numbers.

However, there are problems in controlling orders that consist of many steps.



Lecture 07

page 30© WZL/FIR

Use of Priority Rules for Sequence Planning

FCFS First come, first served

SPT Shortest processing time

RAN Random number per operation

RAND Random number per order

SROT Shortest remaining operation time

TERM Finish date

SLACK Slack time

LPT Longest processing time

OP/RE Operation time / remaining machining time

STRUN Shortest processing time with limitation of waiting time

S-SL SPT if slack time sufficient, otherwise SLACK

Queue of shop-floor orders Priority rules

Shop-floor order in

machining

Notes:Queues arise from the allocation of orders to the individual jobs/machines. The order of the

orders to be worked on can be defined with the help of priority rules if the fine planning of the

workshop doesn't find any exact specifications. The priority rules should be selected according

to the aim.



Lecture 07

page 31© WZL/FIR

Use of the pull principle: kanban method

Kanban

Cost center:

Grindery

Part-Nr.

Part

description

Container

Container

capacity

5135 - 371 Model-Typ

Appearance

Process

(operation)grindingbolt

Box

500 pieces

Storage depot-Nr. P371-3450

371

Kanban is a production control method using the pull control principle that makes permanent intrusions of a central control unit unnecessary. It is solely oriented at the customer demand.

Definition Kanban:

kan ban

note, card

Notes:The Kanban method is based on decentralized, self-controlled loops. It is characterized by the

following aspects:

• Production starts as a reaction to a requirement notice from the next production level.

• Flexible use of production facilities and personal balances fluctuation of requirement rate.

• Buffer storage between production levels.

• Kanban cards as information device between communicating sites.

Use:

Introduced by Toyota the Kanban principle is used for the communication between different

production levels in operations control. For example the supply of an assembly line with small

parts or self produced components can be accomplished without the central PPC system.



Lecture 07

page 32© WZL/FIR

One card control circuit: sketch

Production kanban

5

1

2

3

4

6

7

Source Drain

Production kanban-collecting box

Notes:To obtain the needed parts for the production, a worker from the drain moves with the empty

containers to the buffer storage of the control circuit. He will place the empty containers in

their intended places.

1. He takes the needed amount of full containers out of the buffer storage.

2. After the removal of the attached Kanban he places the Kanban Card in the Kanban

collecting box.

3. Then he moves with the full containers to his work place and starts production.

4. A worker of the source takes a Kanban out of the Kanban collecting box. This Kanban is a

production order for the source.

5. The worker of the source retrieves the container that is listed on the Kanban out of the buffer

storage and moves to his workplace where he starts producing the needed parts.

6. The finished parts will be put in the empty container. Then he attaches a Kanban to the full

container and delivers the container to the buffer storage where he places the container on

the intended place that is mentioned on the Kanban.



Lecture 07

page 33© WZL/FIR

Advantages and disadvantages of kanban

l A small amount of buffer stock leads to a break in production of the following levels if a disruption occurs.

l Highly fluctuating amounts are not controllable

l Small multiplicity of variants/high amount of constant components

Disadvantages

Kanban

Advantages

l Small amount of stocks

l High service level and punctuality

l Reduction of lead time

l High transparency of flow of material

l Low control costs

l Low data management and production data collecting costs

l Higher responsibility of the employees

l Low stocks result in an accurateness of the employees

Notes:



Lecture 07

page 34© WZL/FIR

Composition of Throughput Time

(source: Stommel)

Throughput time

Machining time (including setting-up)

Transport time

Control time

Queuing time

100 %

10 %

2 %

3 %

85 %

Queuing time caused by work process

Storing time

Queuing time caused by interruptions

Queuing time caused by persons

75 %

5 %

3 %

2 %

oa

Notes:Analyzing preferably job shop production organized manufacturing sectors shows, that the main

part of lead times is not participate in productive progress. A big rationalization potential is lying

in control of procedures by reducing high queuing times.



Lecture 07

page 35© WZL/FIR

Share in Throughput Time of Lots and Units

time

Quantity

Setting-up

Machining xQueuing time

(after machining)Transport

Queuing time (before

machining)

Machin-ing y

S

Throughput time (order)

Part I

Part II

Assembly

Machining time (Order)

Transfer time

Throughput time (work process, lot)

Part n

Part 2

Part 1

Lot size

Transfer time (unit)

Average throughput time (unit)

Machining time (unit)

(source: Heinemeyer)

Notes:In the case of lot manufacturing, the actual proportion of unproductive time within the

throughput time rises with increasing lot-size. In addition to the transition times between two

operations, lot-size related waiting times within an operation can also be reduced.

On the one hand a large lot size causes a short changeover time, but on the other hand all work

pieces have to wait on each other. The determination of optimal lot size is not trivial.

See also PMA L8: Determination of the optimal lot size



Lecture 07

page 36© WZL/FIR

Methods of Reducing Production Throughput Time

Splitting of operations

Overlapping production

Combination of operations having the

same setting-up

Normal production cycle

t

Machining time

A 20 A 30A 10

Order ASetting-up time Transfer time

A 20/2 A 30A 10

A 20/1

t

t

A 20

A 30

A 10

t

A 20A 10

tOrder B

A 30B50

t

t

avoid blocking of production resources

build part families / technology families

Notes:There are different possibilities of reducing the transmission delay of an order. When splitting

operations e.g. a work step can be carried out at the same time on two machines instead of

only one machine. Another method is overlapping the production, this means the next work step

doesn't start after the completion of the whole lot but after the completion of just a part.

Furthermore the setting up of operations with the same set-up process can be joined together

for saving make-ready times so that parts of the order A are produced together with parts of the

order B.

The allocation of orders to the individual workplaces results in queues. The sequence in which

the orders are to be processed can be determined using priority rules in case the detailed shop-

floor plans do not contain any exact specifications. Rules are selected depending on the

objective.



Lecture 07

Final statement:

The objective of this lecture was to provide an overview regarding the following

topics:

• Tasks and goals of operations control

• Functions of production planning and control

• Problems and challenges of operations control

• Characteristics and differences between pull- and push-control

• Functions of capacity- and order-based lead time scheduling

• Capacity planning in the framework of operations control

• Types and functions of release strategies

• Application of kanban



Lecture 07

Questions:

• What are the main differences between push- and pull-control?

• What are the main objectives of operations control? Why are these objectives

in competition?

• What types of lead time scheduling medthods do you know? What are the

differences?

• How would you describe the load-dependent order release strategy?

• Of which elements does an one-card kanban control circuit consist of?



Lecture 07

Bibliography:

Dangelmaier, W.; Warnecke, H.-J.: Fertigungslenkung: Planung und

Steuerung des Ablaufs der diskreten Fertigung; Springer-Verlag; Berlin,

1997

Eversheim, W.: Organisation in der Produktionstechnik, Band 4: Fertigung

und Montage; VDI-Verlag; Düsseldorf, 1989

Eversheim, W.: Organisation in der Produktionstechnik, Band 3: Arbeits-

vorbereitung; Springer-Verlag; Berlin, 2002

Eversheim, W.; Schuh, G.: Betriebshütte – Produktion und Management;

Berlin; Springer-Verlag, 1996

Hackstein, R.: Produktionsplanung und -steuerung (PPS); VDI-Verlag;

Düsseldorf, 1989

Lödding, H.: Verfahren der Fertigungssteuerung; Springer-Verlag; Berlin,

Heidelberg, 2008

Luczak, H.: Rationalisierung und Reorganisation (Skript zur Vorlesung);

Eigendruck; Aachen, 2004

REFA: Methodenlehre der Planung und Steuerung, Teil 3; Hanser-Verlag;

München, 1985

Schuh, G.: Produktionsplanung und -steuerung – Grundlagen, Gestaltung,

Konzepte; 3. Auflage; Springer-Verlag; Berlin, 2006

Wiendahl, H.-P.: Betriebsorganisation für Ingenieure; Hanser-Verlag;

München, Wien, 2008

Wiendahl, H.-P.: Fertigungsregelung – logistische Beherrschung von

Fertigungsabläufen auf Basis des Trichtermodells; Hanser-Verlag;

München, 1997

Documents

Laboratory for Machine Tools and Production Engineering ... · Laboratory for Machine Tools and Production Engineering Chair of Production Engineering ... Order coordination Inventory