Capacity Planning and Utilization Chapter 10 Vollmann, Berry, Whybark, Jacobs

Session 13 Capacity Planning Techniques Capacity Planning: Role in MPC Systems Rough Cut Capacity Planning Capacity Bill Technique Resource Profiles Technique Capacity Requirements Planning Capacity Definitions Technique Advantages/Limitations

Capacity Planning in the MPC System

Capacity planning objectives: Estimation of capacity requirements Execution

Techniques:1 Capacity Planning using Overall Factors (CPOF): Uses historical data based on end products Applied to labor and machine hours The standard rates are applied to work centers CPOF is stated in terms of weekly or monthly time periods (revised periodically)

Figure 10.2 & 10.3

Techniques:2 Capacity Bills Direct estimation between work centers and individual end products. Takes into account product mix shifts More data is required Takes historical trends in consideration

Figure 10.4

Figure 10.5

Figure 10.6

Techniques:3 Resource Profiles Takes into consideration the specific timing of the projected workloads at individual work centers Time-phased projections BOM method + production lead time

Figure 10.7 Setback Chart

Figure 10.8

Figure 10.9

Techniques:4 Capacity Requirement Planning Differs from rough-cut capacity techniques by: Utilizes time-phased material plan info. (MRP record) Utilizes gross to net feature of MRP Utilizes open orders capacity (for remaining work) Demand for service part

Figure 10.10

Finite Capacity Scheduling An extension of CRP, with feasibility adjustment Vertical loading: work centers are scheduled, job by job. Horizontal loading: a shop order is scheduled according to priority.

Finite Capacity Scheduling Front scheduling: starts from the current date and schedule forward the job Back scheduling: schedule the job backward from the due date.

Figure 10.11 Infinite/finite loading

Figure 10.12 Data for APS approach

Figure 10.13 Back schedule approach

Input/output control Matching capacity and execution Use shop floor data Compare input (jobs entering work center) to output (jobs exiting work center) Use standard to actual hours Deviation can result from: productivity, breakdown, absence, …etc Backlog control

Figure 10.14: Input/Output control

Capacity Definitions Required capacity: Estimated using capacity planning techniques Rated capacity: Available capacity considering staffing equipment capabilities Demonstrated capacity: Actual (or realized) capacity based on actual production output

Capacity Measures Available time: the total hours available at a WC. {3 Shifts * 8 Hours* 5 Days} Utilization: percentage of time a WC is active. {[Hours actually worked/Available Hours]*100%} Efficiency: {[actual rate of production/standard rate of production]*100%}

Capacity Measures Rated capacity: result in standard hours Available time * Utilization * Efficiency Demonstrated capacity: use previous record to measure capacity. {sum of previous actual work/number of periods}

Capacity Planning Techniques: Pros and Cons Capacity Bills Easy to use Minimal computational information Consider product mix Cons Doesn’t consider lead times, inventory, or gross-to-netting requirements Less accurate

Capacity Planning Techniques: Pros and Cons Resource Profiles Easy to use Minimal computational Considers lead times Consider product mix Cons Doesn’t consider inventory information or gross-to- netting requirements Less accurate

Capacity Planning Techniques: Pros and Cons Capacity Requirements Planning Considers: gross-to-netting, Inventory information, lead times More accurate Considers product mix Cons Extensive computational requirements Requires MRP system, Time-phased records

End of Chapter 10