IMM 8th ed Ch 5
Introduction to Materials Management
Chapter Overview
Introduction to Materials Management
Authors: Chapman, Arnold, Gatewood, and Clive
Copyright © 2017 by Pearson Education, Inc.
Capacity Management
Summary of Key Concepts
Definitions: Understanding basic terminology associated with capacity management.
Basic Approach: Framework for managing capacity effectively.
Levels and Linkages: Different levels of capacity planning and how they relate.
CRP (Capacity Requirements Planning):
Inputs: Initial data needed for CRP.
Capacity Available: Determines what can be produced.
Rated or Demonstrated Capacity: Evaluation of actual production capabilities.
Capacity Required: The necessary capacity to meet production demands.
Scheduling: Allocating resources and planning production timelines.
Adjusting Capacity: Procedures to manage discrepancies in capacity.
Basic Capacity Concepts
Key Definitions
Capacity: Total amount of work that can be completed in a specific time frame.
Capacity Available: Measure of how much work a resource can handle within a designated time period.
Capacity Required: Estimate of the capacity needed to produce a specified output during that time period.
Capacity Management: The continuous process of evaluating and controlling the capacity of systems to meet production demands.
Additional Concepts
Capacity Planning: Involves determining what resources and methods are required to align with the priority production plan.
Capacity Control: Ongoing monitoring of actual production against the capacity plan, including necessary adjustments when discrepancies occur.
Capacity versus Load
Fundamental Comparison
Understanding how capacity and load interact is crucial for effective materials management.
Managing the load effectively means adjusting capacity when there are disparities.
Basic Approach to Capacity Management
Steps to Effective Management
Assess the capacity available at each work center during each time period.
Determine the load at each work center by:
Translating the priority production plan into hours of work.
Summing required capacities to identify overall load.
Resolve the differences between capacity available and capacity required to optimize productivity.
Capacity Planning Levels
Types of Capacity Planning
Resource Planning: Focuses on long-term resource requirements based on the production plan.
Rough-cut Capacity Planning: Evaluates the feasibility of Master Production Schedules (MPS).
Capacity Requirements Planning: Formulates detailed capacity plans linked to Material Requirements Planning (MRP).
Inputs for Capacity Requirements Planning(CRP)
Key Inputs for CRP
Open Orders: Existing orders that need to be fulfilled.
Scheduled Receipts: Anticipated materials to be received.
Work Center Master:
Information on available capacity and lead times, including move, wait, and queue times.
Routing: Detailed path the work will follow, including operations sequence, work centers involved, and tooling requirements.
Measuring Capacity Available
Impact Factors
Product Specifications: How the details of a product affect capacity.
Product Mix: Variety of products produced can impact overall capacity.
Plant and Equipment: Defines the physical constraints on production capabilities.
Work Effort: The efficiency and pace at which work is conducted.
Units of Output: Measurements used to quantify the work done within a period.
Calculating Rated Capacity Available
Steps for Calculation
Calculate Available Time: Total hours work center is available for use.
Determine Utilization:
Utilization = (Hours Worked / Available Hours) x 100%
Assess Efficiency:
Efficiency = (Actual Production Rate / Standard Production Rate) x 100%
Examples and Scenarios
Rated Capacity: Understand that rated capacity = Available Time x Utilization x Efficiency.
Capacity Terms
Important Definitions
Theoretical Capacity: Ideal maximum capacity without constraints.
Rated Capacity: Actual capacity considering usage and efficiency factors.
Demonstrated Capacity: Capacity based on historical performance data.
Safety Capacity: Extra capacity provided as a buffer against unexpected situations.
Demonstrated Capacity Calculation
Proven Capacity: Average output over time using standard hours.
Calculation Example: Sum of standard hours produced divided by the number of weeks.
Work Center Orders and Load Calculation
Load Calculation Examples
Total standard time required for opened and planned orders at work centers.
How to calculate standard time for different scenarios.
Scheduling Techniques
Order Scheduling Methods
Back Scheduling: Start from the due date and work backward to establish start dates for operations.
Forward Scheduling: Begin orders on the first work center and use lead times to predict completion dates.
Example Scenarios
Illustrate back scheduling with actual operational times.
Managing Capacity Strategies
Adjustment Strategies for Capacity Management
Schedule overtime or adjust worker levels as needed.
Shift workers among work centers to balance load.
Use subcontracting as necessary to fulfill capacity needs.
Continuously re-evaluate availability, utilization, and efficiency.