1. Manufacturing Planning and Control
MPC 6th Edition
Chapter 8

2. Production Activity Control
Production Activity Control (PAC) concerns the execution of material plans. A number of MPC activities, including Shop-floor Scheduling and Control (SFC), Vendor Scheduling and Follow-up, Order Release, and Purchasing fall partly or completely within the realm of Production Activity Control.

3. Agenda Production Activity Control–An Overview
Manufacturing Planning and Control Linkages
Production Activity Control Techniques
Theory of Constraints
Vendor Scheduling
Principles

4. Production Activity Control in the MPC System
Resource
planning
Sales and operations
planning
Demand
management
Master production
scheduling
Detailed capacity
planning
Detailed material
planning
Material and
capacity plans
Order release
Purchasing
Production activity control
Shop-floor scheduling and control (SFC)
Vendor scheduling and follow-up

5. System Links–MPC and Production Activity Control
PAC System
Detailed Capacity Planning
Planning information to PAC
Feedback from PAC – status and warnings
Detailed Material Planning

6. Just-in-Time (JIT) Effect on PAC
Formal systems for shop-floor control are largely unnecessary under JIT
PAC functions are simplified
Order release through kanbans or other pull system
Limited work-in-process inventories
Detailed scheduling is not needed
No data collection or monitoring requirements–only raw material and finished goods inventories
Vendor scheduling may be more complex under JIT

7. Production Activity Control and Company Environment
The primary PAC objective is managing material flows to meet MPC plans
Other objectives may pertain to efficient use of capacity, labor, tools, time, or materials
Under JIT the objective is material velocity
PAC objectives reflect the firm’s strategy and competitive position

8. Production Activity Control Techniques
Gantt Charts
Provides graphic representation of the system
Priority Sequencing Rules
Selecting the order of job processing
Theory of Constraints Scheduling
Scheduling to minimize impact of bottleneck resources

9. Basic Shop Floor Concepts
Routing and lead-time data are essential inputs
Routing specifies the operation, its duration, and the work center performing the work
Lead times typically consist of four elements
Run time
Setup time
Move time
Queue time

10. Operation Setback Chart
Part D has three operations
Sub-Assembly
Finished Product
Component parts

11. Lead-Time Management
The four elements of lead time (run, setup, move, and queue) can be compressed with good PAC management
A basic principle of MPC systems is to substitute information for inventory
The knowledge of when an order will arrive at a work center replaces the need to WIP inventory feeding the work center

12. Gantt Charts Gantt charts show a schedule Each step listed separately
Relationship between steps portrayed visually

13. Priority Sequencing Rules
Determine which job to run next at a particular work center
When a job is near completion, the available jobs in the queue are evaluated

14. Priority Sequencing Rules
Common rules
Order slack–work on the job with the least total slack
Slack per operation–divide total slack by the number of remaining operations, then work on job with least slack
Critical ratio–calculate (time remaining)/(work remaining) and work on job with lowest ratio
Shortest operation next–work on the job that can be completed most quickly

15. Theory of Constraints (TOC)
TOC focuses effort on bottleneck resources
Bottlenecks limit the capacity of the entire plant
Objective is to maximize throughput
Bottlenecks may be constraints other than work centers
Constraints are identified, buffered with inventory, and their importance is stressed to the entire factory

16. Theory of Constraints Scheduling
Drum-Buffer-Rope
Drum–bottleneck work centers which control the tempo of workflow through the plant
Buffer–inventory and/or scheduling activities to protect the throughput at bottlenecks from random variation
Rope–use of pull scheduling at non-bottleneck resources
Material moves through non-bottleneck resources as quickly as possible, bottlenecks are managed for maximum efficiency

17. TOC Scheduling
Scheduling is completed according to the work center type
Potential bottlenecks are identified using rough-cut capacity planning

18. Capacity Utilization Chart
Work centers over a capacity threshold (80%) are considered bottlenecks

19. Buffers
TOC uses both safety stock and safety lead time at bottleneck operations
Safety lead time is introduced between sequential orders at the bottleneck
Safety stock of completed parts from preceding, non-bottleneck operations is held in front of the bottleneck to prevent shortages

20. TOC and Lot Sizing
Lot sizes are calculated differently for bottleneck and non-bottleneck resources
For the same finished item, lot sizes at different operations may be different
TOC splits orders at non-bottleneck resources and combines orders at bottlenecks
This maintains supply of non-bottleneck parts while reducing setup time and/or increasing efficiency at the bottleneck

21. Managing the TOC Schedule
Schedule new orders on the bottleneck operations (drums)
Finite backward scheduling
Exploiting the drums
If necessary, add capacity to drums by moving work or outsourcing
Material release–ropes
Release raw materials to non-bottlenecks only when scheduled
Proactive management of buffers
Ensure that bottleneck resources are not starved for orders
Elevating the drum
Increase capacity at the bottlenecks to allow the organization to grow

22. TOC Contributions A feasible master schedule
Less WIP, shorter lead times, greater material velocity
Eliminates the conflict between MRP and finite scheduling

23. TOC Implementation Issues
Requires a major shift in manufacturing mindset (paradigm shift)
Its OK to not work (at a non-bottleneck) if there are no orders
Firm needs sound systems, education, top-management support, and willingness to change

24. Vendor Scheduling and Follow-Up
Objective–align orders with due dates
Vendor must have continually updated information concerning priorities
Contractual agreements may limit the type and degree of change the vendor must accommodate
Use of the Internet can enhance the speed and efficiency of information exchange

25. Principles
Production activity control system design must be in concert with the firm’s needs.
Vendor capacities should be planned and scheduled with as much diligence as internal resources.
Lead times must be managed.
Feedback from the PAC should provide both status and early warning information to other MPC modules

26. Principles
E-based systems can improve communication between customer and vendor, reducing lead time and overhead.
TOC scheduling provides improved performance by focusing on the constraining resources.
TOC implementation requires a change in culture.
Traditional priority rules can play a role in scheduling non-bottleneck resources.
Stability in manufacturing loads and capacity plans facilitates shop-floor execution.

27. Quiz – Chapter 8
Production activity control (PAC) actions take place mainly in which section of the MPC system?
The shop-floor control system is kept current on changes in material plans by the MRP system? (True/False)
Formal shop-floor control systems are unnecessary under JIT? (True/False)
A visual representation of the scheduling process can be provided by _________ charts.
The TOC scheduling process is called ______-_________-_________.
In TOC scheduling, buffers are maintained before and after _____________ resources.