Operations Management Short-Term Scheduling Chapter 15

Learning Objectives When you complete this chapter, you should be able to : Identify or Define: Gantt charts Assignment method Sequencing rules Johnson’s rules Bottlenecks

Learning Objectives - continued When you complete this chapter, you should be able to : Describe or Explain: Scheduling Sequencing Shop loading Theory of constraints

Delta Airlines 10% of Delta’s flights disrupted per year - half of those by weather Cost: $440-million in: lost revenue overtime pay food and lodging vouchers $33-million hi-tech nerve center 18 staff $35-million savings (per year)

Strategic Implications of Short-Term Scheduling By scheduling effectively, companies use assets more effectively and create greater capacity per dollar invested, which, in turn, lowers cost This added capacity and related flexibility provides faster delivery and therefore better customer service Good scheduling is a competitive advantage which contributes to dependable delivery

Short-Term Scheduling Deals with timing of operations Short run focus: Hourly, daily, weekly Types Today Due Date B E Forward Scheduling Backward Scheduling

Short-Term Scheduling Examples © 1984-1994 T/Maker Co. Hospital Outpatient treatments Operating rooms University Instructors Classrooms Factory Production Purchases

Scheduling Decisions Organization Managers Must Schedule Operating room use Patient admission Nursing, security, maintenance staffs Outpatient treatments Classrooms and audiovisual equipment Student and instructor schedules Graduate and undergraduate courses Production of goods Purchase of materials Workers Mount Sinai Hospital Indiana University Lockheed- Martin Factory

Scheduling Decisions Organization Managers Must Schedule Chefs, waiters,bartenders Delivery of fresh foods Entertainers Opening of dining areas Maintenance of aircraft Departure timetables Flight crews, catering, gate, and ticketing personnel Hard Rock Cafe Delta Airlines

Capacity Planning, Aggregate Scheduling, Master Schedule, and Short-Term Scheduling 1. Facility size 2. Equipment procurement Long-term Aggregate Scheduling 1. Facility utilization 2. Personnel needs 3. Subcontracting Intermediate-term Master Schedule 1. MRP 2. Disaggregation of master plan Intermediate-term Short-term Scheduling 1. Work center loading 2. Job sequencing Short-term

Forward and Backward Scheduling Forward scheduling: begins the schedule as soon as the requirements are known jobs performed to customer order schedule can be accomplished even if due date is missed often causes buildup of WIP Backward scheduling: begins with the due date of the final operation; schedules jobs in reverse order used in many manufacturing environments, catering, scheduling surgery

The Goals of Short-Term Scheduling Minimize completion time Maximize utilization (make effective use of personnel and equipment) Minimize WIP inventory (keep inventory levels low) Minimize customer wait time

Types of Planning Files Item master file - contains information about each component the firm produces or purchases Routing file - indicates each component’s flow through the shop Work-center master file - contains information about the work center such as capacity and efficiency

Loading Jobs in Work Centers Assigning jobs to work centers Considerations Job priority (e.g., due date) Capacity Work center hours available Hours needed for job Approaches Gantt charts (load & scheduling) - capacity Assignment method - job to specific work center

Options for Managing Facility Work Flow Correcting performance Increasing capacity Increasing or reducing input to the work center by: routing work to or from other work centers increasing or decreasing subcontracting producing less (or more)

Gantt Scheduling Chart Start of an activity Scheduled activity time allowed Point in time when chart is reviewed S T W F Day Job Job A Job B Job C Maintenance Now End of an activity Actual work progress Non-production time Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7

Assignment Method Assigns tasks or jobs to resources Type of linear programming model Objective Minimize total cost, time etc. Constraints 1 job per resource (e.g., machine) 1 resource (e.g., machine) per job

Sequencing Challenge Order release Job Packet Job XYZ Which job do I run next? Dispatch List Order Part Due Qty XYZ 6014 123 100 ABC 6020 124 50 Production Control Production

Sequencing Specifies order jobs will be worked Sequencing rules First come, first served (FCFS) Shortest processing time (SPT) Earliest due date (EDD) Longest processing time (LPT) Critical ratio (CR) Johnson’s rule

Priority Rules for Dispatching Jobs First come, first served The first job to arrive at a work center is processed first Earliest due date The job with the earliest due date is processed first Shortest processing time The job with the shortest processing time is processed first Longest processing time The job with the longest processing time is processed first Critical ratio The ratio of time remaining to required work time remaining is calculated, and jobs are scheduled in order of increasing ratio. FCFS EDD SPT LPT CR

First Come, First Served Rule Process first job to arrive at a work center first Average performance on most scheduling criteria Appears ‘fair’ & reasonable to customers Important for service organizations Example: Restaurants

Shortest Processing Time Rule Process job with shortest processing time first. Usually best at minimizing job flow and minimizing the number of jobs in the system Major disadvantage is that long jobs may be continuously pushed back in the queue.

Longest Processing Time Rule Process job with longest processing time first. Usually the least effective method of sequencing.

Earliest Due Date Rule Process job with earliest due date first Widely used by many companies If due dates important If MRP used Due dates updated by each MRP run Performs poorly on many scheduling criteria

Critical Ratio (CR) Ratio of time remaining to work time remaining = Work days remaining Due date - Today' s date = Work (lead ) time remaining Process job with smallest CR first Performs well on average lateness

Advantages of the Critical Ratio Scheduling Rule Use of the critical ratio can help to: determine the status of a specific job establish a relative priority among jobs on a common basis relate both stock and make-to-order jobs on a common basis adjust priorities and revise schedules automatically for changes in both demand and job progress dynamically track job progress and location

Job Sequencing Example Job Work Processing time in days Job Due Date (day) A 6 8 B 2 C 18 D 3 15 E 9 23

Summary Rule Average Completion Time (days) Utilization (%) Average Number of Jobs in the System Average Lateness (Days) FCFS 15.4 36.4 2.75 2.2 SPT 13.0 43.1 2.32 1.8 EDD 13.6 41.2 2.43 1.2 LPT 20.6 27.2 3.68 9.6

Processing time in days Critical Ratio (CR) Job Job Work Processing time in days Job Due Date (day) Critical Ratio A 6 8 0.75 B 2 0.33 C 18 0.44 D 3 15 0.20 E 9 23 0.39 Sequence A C E B D

Johnson’s Rule Used to sequence N jobs through 2 machines in the same order © 1995 Corel Corp. Saw Drill Job A Job B Job C Jobs (N = 3)

Graphical Depiction of Job Flow Work center 1 Work center 2 0 3 10 20 28 33 0 3 9 10 20 22 28 29 33 35 Time => B E D C A B E D C A = Idle = Job completed

Limitations of Rule-Based Dispatching Systems Scheduling is dynamic; therefore, rules need to be revised to adjust to changes in process, equipment, product mix, etc. Rules do not look upstream or downstream; idle resources and bottleneck resources in other departments may not be recognized Rules do not look beyond due dates

Finite Scheduling System

Theory of Constraints Deals with factors limiting company’s ability to achieve goals Types of constraints Physical Example: Machines, raw materials Non-physical Example: Morale, training Limits throughput in operations

Theory of Constraints A Five Step Process Identify the constraints Develop a plan for overcoming the identified constraints Focus resources on accomplishing the constraints identified in step 2 Reduce the effects of the constraints by off-loading work or by expanding capability Once one set of constraints is overcome, return to the first step and identify new constraints

Bottleneck Work Centers Bottleneck work centers have less capacity than prior or following work centers They limit production output © 1995 Corel Corp.

Techniques for Dealing With Bottlenecks Increase the capacity of the constraint Ensure well-trained and cross-trained employees are available to operate and maintain the work center causing the constraint Develop alternate routings, processing procedures, or subcontractors Move inspections and tests to a position just before the constraint Schedule throughput to match the capacity of the bottleneck

The 10 Commandments for Correct Scheduling Utilization of a non-bottleneck resource is determined not by its own capacity but by some other constraint in the system Activating a resource is not synonymous with utilizing a resource An hour lost at a bottleneck is an hour lost of the whole system An hour saved at a non-bottleneck is a mirage The transfer batch may not, and many times should not, be equal to the process batch

The 10 Commandments for Correct Scheduling The amount processed should be verifiable and not fixed Capacity and priority need to be considered simultaneously, not sequentially Damage from unforeseen problems can be isolated and minimized Plant capacity should not be balanced The sum of the local optimums is not equal to the global optimum

Scheduling for Services Appointment systems - doctor’s office Reservations systems - restaurant, car rental First come, first served - deli Most critical first - hospital trauma room

Cyclical Scheduling Plan a schedule equal in weeks to the number of people being scheduled Determine how many of each of the least desirable off-shifts must be covered each week Begin the schedule for one worker by scheduling the days off during the planning cycle (at a rate of 2 days per week on average)

Cyclical Scheduling - Continued Assign off-shifts for the first worker Repeat this pattern for each other worker, but offset by one week from the previous Allow each worker to pick his/her “slot” or “line” in order of seniority Mandate that any changes from the chosen schedule are strictly between the personnel wanting to switch

Operations Management Just-in-Time and Lean Production Systems Chapter 16

Learning Objectives When you complete this supplement, you should be able to : Identify, Describe or Explain: Just-in-Time (JIT) philosophy Lean Production

Introductory Quotation Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’ — Shoichiro Toyoda President, Toyota © 1995 Corel Corp.

Green Gear Cycling Designs and manufacturers high performance travel bicycles (bike-in-a-suitcase!) Strategy is mass customization with low inventory, work cells, and elimination of machine setups. Major focus on JIT and supply-chain management. Two lines with seven work cells One day throughput time Focus on quality

What is Just-in-Time? Management philosophy of continuous and forced problem solving Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.

Lean Production Lean Production supplies customers with exactly what the customer wants, when the customer wants, without waste, through continuous improvement.

Types of Waste Overproduction Waiting Transportation Inefficient processing Inventory Unnecessary motion Product defects

Variability Occurs Because Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity Engineering drawings or specifications are inaccurate Production personnel try to produce before drawings or specifications are complete Customer demands are unknown

Results Queue and delay reduction, speedier throughput, freed assets, and winning orders Quality improvement, reduces waste and wins orders Cost reduction increases margin or reduces selling price Variability reductions in the workplace reduces waste and wins orders Rework reduction, reduces waste and wins orders

Faster response to the customer at lower cost and higher quality Yielding Faster response to the customer at lower cost and higher quality A competitive advantage!

Just-in-Time Success Factors Suppliers Preventive Maintenance Layout Inventory Scheduling Quality Employee Empowerment JIT

Goals of JIT partnerships Elimination of unnecessary activities Elimination of in-plant inventory Elimination of in-transit inventory Elimination of poor suppliers

Concerns of Suppliers Diversification Poor customer scheduling Frequent engineering changes Quality assurance Small lot sizes Physical proximity

Inventory Traditional: inventory exists in case problems arise JIT objective: eliminate inventory JIT requires Small lot sizes Low setup time Containers for fixed number of parts JIT inventory: Minimum inventory to keep system running

Kanban Japanese word for card Pronounced ‘kahn-bahn’ (not ‘can-ban’) Authorizes production from downstream operations ‘Pulls’ material through plant May be a card, flag, verbal signal etc. Used often with fixed-size containers Add or remove containers to change production rate

Quality JIT exposes quality problems by reducing inventory JIT limits number defects with small lots JIT requires TQM Statistical process control Worker involvement Inspect own work Quality circles Immediate feedback

JIT Quality Tactics Use statistical process control Empower employees Build failsafe methods (poka-yoke, checklists, etc.) Provide immediate feedback

Employee Empowerment Get employees involved in product & process improvements Employees know job best! JIT requires Empowerment Cross-training Training support Few job classifications © 1995 Corel Corp.

All the techniques used in manufacturing are used in services JIT in Services All the techniques used in manufacturing are used in services Suppliers Layouts Inventory Scheduling

Attributes of Lean Producers - They use JIT to eliminate virtually all inventory build systems to help employees product a perfect part every time reduce space requirements develop close relationships with suppliers educate suppliers eliminate all but value-added activities develop the workforce make jobs more challenging reduce the number of job classes and build worker flexibility

Operations Management Maintenance and Reliability Chapter 17

Learning Objectives When you complete this chapter, you should be able to : Identify or Define: Maintenance Mean time between failures Redundancy Preventive maintenance Breakdown maintenance Infant mortality

Learning Objectives - continued When you complete this chapter, you should be able to : Describe or Explain: How to measure system reliability How to improve maintenance How to evaluate maintenance performance

NASA Maintenance of space shuttles Columbia: Maintenance requires 86,000,000 miles on odometer 3 engines each the size of a VW expected to make dozens more launches Maintenance requires 600 computer generated maintenance jobs 3-month turnaround More than 100 people

Maintenance Management All activities involved in keeping a system’s equipment working Objective: Maintain system capability & minimize total costs © 1995 Corel Corp.

The Strategic Importance of Maintenance and Reliability Failure has far reaching effects on a firm’s operation reputation profitability customers product employees profits

Maintenance Performance Maintenance Procedures Employee Involvement Maintenance Performance © 1995 Corel Corp.

Good Maintenance & Reliability Strategy Requires: Employee involvement Maintenance and reliability procedures To yield: Reduced inventory Improved quality Improved capacity Reputation for quality Continuous improvement

Maintenance Benefits Lower operating costs Continuous improvement Faster, more dependable throughput Higher productivity Improved quality Improved capacity Reduced inventory Maintenance

Maintenance Decisions How much preventive & breakdown maintenance Who performs maintenance Centralized, decentralized, operator etc. Contract or in-house When to replace or repair How much to replace Individual or group replacement

Types of Maintenance Preventive Breakdown Routine inspection & servicing Prevents failures Bases for doing Time: Every day Usage: Every 300 pieces Inspection: Control chart deviations Non-routine inspection & servicing Remedial Basis for doing Equipment failure

A Computerized Maintenance System

Contract for Preventive Maintenance Compute the expected number of breakdowns without the service contract Compute the expected breakdown cost per month with no preventive maintenance contract Compute the cost of preventive maintenance Compare the two options

Operations Manager Must Determine How Maintenance Will be Performed Operator Maintenance Department Manufacturer’s field service Depot Service (return equipment) Competence is higher as we more to the right Preventive maintenance costs less and is faster as we move to the left

A Key To Success High utilization of facilities, tight scheduling, low inventory and consistent quality demand reliability - total preventive maintenance is the key to reliability.

Techniques for Establishing Maintenance Policies Simulation - enables one to evaluate the impact of various maintenance policies Expert systems - can be used by staff to help diagnose faults in machinery and equipment

Lets finish with Discussion Questions Page 632 Questions 1-5 & 10

1. The objective of maintenance and reliability is to maintain the capability of the system while controlling costs. 2. Candidates for preventive maintenance can be identified by looking at the distributions for MTBF (mean time between failure). If the distributions have a small standard deviation, they are usually a candidate for preventive maintenance. 3. Infant mortality refers to the high rate of failures that exists for many products when they are relatively new.

4. Simulation is an appropriate technique with which to investigate maintenance problems because failures tend to occur randomly, and the probability of occurrence is often described by a probability distribution that is difficult to employ in a closed-form mathematical solution.

5. Training of operators to perform maintenance may improve morale and commitment of the individual to the job or organization. On the other hand, all operators are not capable of performing the necessary maintenance functions or they may perform them less efficiently than a specialist. In addition, it is not always cost effective to purchase the necessary special equipment for the operator’s use.

10. Only when preventive maintenance occurs prior to all outliers of the failure distribution will preventive maintenance preclude all failures. Even though most breakdowns of a component may occur after time, some of them may occur earlier. The earlier breakdowns may not be eliminated by the preventive maintenance policy. A distribution of natural causes exists.

Best wishes on your final Best wishes on your final! More than that – I wish you success in your careers! Chapters 1&2 11-17 Be sure to bring! Blue Book Scan-tron Short form