Abstract Number: 002-0407. A Finite Scheduling Approach for the Production Planning and. Scheduling in Manufacturing Systems

Abstract Number: 002-0407 A Finite Scheduling Approach for the Production Planning and Scheduling in Manufacturing Systems Second World Conference on POM and 15th Annual POM Conference, Cancun, Mexico, April 30 - May 3, 2004 Marcelo Klippel (marcelo@klippel.com.br) Universidade do Valle do Rio dos Sinos UNISINOS Av. Unisinos, 450, São Leopoldo / RS - Brazil Phone/ Fax: 55-51-590 8186 José Antonio Valle Antunes Júnior (junico@produttare.com.br) Universidade do Valle do Rio dos Sinos UNISINOS Av. Unisinos, 450, São Leopoldo / RS - Brazil Phone/ Fax: 55-51-590 8186 Altair Flamarion Klippel (altair@klippel.com.br) KLIPPEL Consultores Associados St. 24 de Outubro 111, 1103, Porto Alegre / RS - Brazil Phone/ Fax: 55-51-3346 8256 André Luiz Koetz (alkoetz@hotmail.com) Universidade do Valle do Rio dos Sinos UNISINOS Av. Unisinos, 450, São Leopoldo / RS Brazil Phone/ Fax: 55-51-590 8186

Abstract The article proposes a critical analysis to evaluate the relationship between the Rough Gross Capacity and Aggregate Demand and the Finite Production Scheduling. It initiates from the basic notions of the Toyota Production System considering the Rough Gross Capacity and Aggregated Demand and from the concepts and techniques related to the approach of production scheduling derived from the Theory Of Constraints. On the one hand Offer suggests that the calculation of the capacity may be done considering the clear definition of the factory in terms of capacity of the critical resources (bottlenecks). On the other hand Demand proposes that the calculation should be done considering the required quantities by the market and the consumed time in the various resources. The confrontation between these two brings about a discussion within Production Planning. From this confrontation the fundamental question in terms of making operational the aggregate plan is reached, that is the discussion related to Production Scheduling. Key words: Capacity, Demand, Offer, Planning, Scheduling 1. Introduction The need for answering concerning the fluctuation of market demand and the changes of scheduling activities has driven several companies to rethink the way the Production Planning and Scheduling activities are performed. Therefore, in order to attend a specific Demand, should be considered the requirements for the resources allocation (equipments, machines, human resources), the production capacity of each specific resource, the global efficiency and, also the available time to produce, so as to calculate the real Capacity of the productive system. Thus, these questions must be analyzed and considered at different moments and levels. When

questions associated with the Aggregate Demand and Rough Gross Capacity are observed, these considerations must be treated at more aggregated level, namely, at the Production Planning level. In the same way, when the questions concern the finite capacity analysis and workplace, demand must be considered at a more micro level, namely, the Rough Gross Capacity in a general manner and the Finite Production Scheduling in a more specific way. The demand is obtained by calculating the cycle times (or pattern time) of each product that must be manufactured and the respective quantities required. The production capacity of a system is limited by the constrained resource capacity the bottleneck its demand will be equal to the production capacity of this constrained resource (in an environment which the demand is higher than the offer). In this way, the production planning level must consider the demand for the company products and at the same time it must confront this demand with the factory capacity, namely the critical resource capacities of the productive system. Consequently, after a treatment and refinement of the macro-questions associated with production planning, the next step consists of elaborating the activities scheduling for the productive resources and making possible the operation of production plan at the factory. This article also examines the importance of synchronized and integrated treatment of MPCSP - Material and Production Control, Scheduling and Planning area functions in general and the Production Planning and Scheduling activities more specifically. 2. Theoretical References In terms of theoretical references, the authors searched for the statements and information, at the available literature, that supports the logical reasoning followed in the present paper. The purpose was to enrich the discussion and present the companies reality in agreement with the

theoretical concepts development under the two general lines of reasoning in this article: i) Aggregate Demand and Production Rough Gross Capacity; ii) Finite Production Scheduling. In this way, the theoretical references are segmented in two principal points, like follows. 2.1 Aggregate Demand and Rough Gross Capacity One of the more important contributions of the Toyota Production System (TPS) for the comprehension of the Productive Systems was the revolutionary concept of the production phenomena. The paradigm of this phenomena through the analysis of operations that compose a productive process became obsolete. According to this traditional paradigm, the process was visualized like a sum of operations. In that case, when an operation was improved, conceptual perception arisen that the whole process had also been improved. Since the appearance of TPS, the production phenomena begins to be perceived from a different perspective. Shingo (1966b, p.29) postulated that a production is constituted of an operation and process net, phenomena that was positioned along the axis that intersection itself. In production improvements, must be given highest priority for the process phenomena. Shingo suggests that all phenomena that occur at productive systems may be visualized from a Process Function point of view from now on named Process and from Operation Function named only Operation. Shingo (1966b) affirms that the Process can be understood as being the product flow from a worker to another, that is, the stages by which the raw material has to pass until it becomes a finished product, by its gradual transformation. Operations refer to the distinct stages in which a worker can work at different products. The Operation is related to a space and temporal flow that is firmly centered at the worker. In analyzing the Process occurs an observation from productive phenomena under the prism of the work object (materials or products). On the other hand, the

Operations can be visualized as the work live work (people) and dead work (equipments) in order to realize the Process. As mentioned previously, the machines and equipment can work or be located in different products. It is the observation of the production at the point of view of work subject (machines and workers), focused and maintained at a point of the production structure occupied by an operator, a machine or an equipment, or also like a combination of both, that frequently happens. From the above concept, the authors state that the Process is nothing else but the product flows, and that the Operations represent the work flows. These two flows are not distinct phenomena but rather they belong to the same analytic axis. They are inter-related phenomena that belong to different axis which are visualized jointly, while an Operations and Process Net, constitute the called Production Function Mechanism. As these belong to different axes, these phenomena must be analyzed separately. In order to analyze the production capacity of a production line, the Offer of each equipment and machine (resource) that compose this line must be analyzed. This Offer is related to the Operation Function, as the Offer is directly dependent on the people and equipment involved in the productive system. On the other hand, analyzing the product demands, is directly related with the products that were be elaborated at a specific productive system. In this way, the products demand is linked to the Process Function. By observing the problematic related to Offer / Capacity and Demand from the view of the Production Function Mechanism at least two basics advantages to be development at industrial practice can be observed. The first one is related to the full comprehension of the productive phenomena of Demand and Offer, or the didactic advantages associated with the perception of productive phenomena. The second one, consists of the perception that the effective improvement actions that can be realized at Production Systems

must have two distinctive, but related focuses: i) the Capacity improvement actions (Operation Function); and ii) the Demand improvement actions (Process Function). In the sequence, the article intend to detail the issues related to Offer (Process Function) and to Demand (Operation Function) at the productive systems. The Offer of productive resources that is equal to the respective productive Capacity is given by the equation below, which is calculated in time unit. C = T x µ global Where: C = Resource Production Capacity T = Available Total Time for Production µ global = Resource Global Efficiency Index The products Demand at productive resources is given by the following equation: Where: D = Resource Products Demand n D = Σ tp i x q i i = 1 tp i = Processing Time (cycle time) of the product i q i = Manufactured Quantity of product i In this equation, it is observed that the multiplication of a specific product cycle time by the manufactured quantity of this product at a resource, correspond to the value aggregate time of this resource on the production process. In other words, it represents the time that the resource

remains working effectively aggregating value on work in process product. It should be emphasized that the demand also is calculated in time unit. If the Production Capacity of a resource is higher than its products demand, then this is a nonconstrained resource (non-bottleneck). Thus, this kind of resource does not limit the production. On the other hand, if the Capacity of this resource is lower than its manufactured products, it becomes a constrained resource (bottleneck) and it limits the production at this line. In that case, this resource will be producing at full capacity. It means that if does not improve in terms of Offer and/or Demand, the demand of this resource will be equal the respective Production Capacity. Leveling the equations showed above, it will obtain the equation for the calculus of the Global Efficiency Index for the Constrained Resource. This index is related to the principal measurement reference of the called Total Productive Maintenance (TPM). µ global n i= = 1 tp T i xq i In a constrained resource (bottleneck) the whole available time must be used to produce, like Goldratt (1997) affirms an hour lost on the bottleneck is an hour lost in the whole system. In that case, this measurement will be named Total Effective Equipment Productivity (TEEP). What is the significance of this measurement from the Toyota Production System prism? It measures the percentage of the aggregate value at the workplace treated. The numerator represents the time products aggregate value (sum of times versus quantities) and the denominator represents the available total time for production at the same resource. Thus, this is the most important measurement of the Toyota Production System from the Operation Function prism (machines

and people involved). To calculate the global efficiency equipment at a non-constrained resource is used at the denominator instead of the resource available total time the time which the resource was effectively scheduling to manufacturing. At a non-constrained resource, by default, this scheduled time will be lower than the total time. This is true at a non-constrained resource necessarily will have an idle time at the resource. At the non-bottleneck resource, the TPM measurement is named Overall Equipment Efficiency (OEE). This represents the equipment effectiveness during the time which it is effectively scheduled to produce. In order to increase the capacity of a productive system it is fundamental to make improvements to the restrictive machines. In this way, there are two possibilities: a) increase the Offer of the critical resources; or b) reduce the products demand at the restrictive resources. The increment of the Offer is the constraints can be done by two ways: i) increase the available total time T; ii) increase the TEEP - µ global. In the first situation, if the resource works during 24 hours a day, the scheduled stops must be completely eliminated. If the critical resource works in a lower time (for instance, 1 or 2 shifts a day), the available total time may be increased by the utilization of overtime at this resource or by the allocation of more production shifts. That is, inside the possibilities, the called Factory Definition can be changed (Antunes, 1998). Also, new machines can be acquired or, alternatively, existing machines can be used to make the required operations. Another way to increase the Bottleneck Production Capacity consists in increasing the TEEP value, by actions that increment the bottleneck efficiency. The basic idea consists in identifying the potential improvements of the restrictive resource in order to increase its efficiency. This

implies in the identification of the principal reasons that reduce the bottleneck efficiency which makes possible the elaboration of an Action Plan to reduce / eliminate the main wastes mapped when the TEEP is calculated (for instance: setup global times, corrective maintenance, meal stop, operator absence, etc.). The demand reduction at the constraints can be though two generic ways: i) processing time reduction of parts processed by the bottleneck - tp i ; ii) reducing the quantities of parts that are processed by the bottleneck q i. The reduction of the processing time of parts can involve actions like: i) processing times / cycle time reduction of parts analyzing purposed by the Method Engineering; ii) reduceing the resource feed and remove time parts; iii) transferring some operations processed at bottleneck (micro-operations) to others non-constrained resources; iv) changing the product project in order to reduce the cycle time / processing time. In order to reduce the parts processed by bottleneck, actions like the following can be adopted: i) utilization of manufacturing alternative routes; ii) utilization of a subcontract strategy of parts processed by the constraint; iii) not to accept the production of a specific set of parts demanded by clients (obviously that this decision can cause some damages on the Company economicfinancials performance). In this way, it becomes clear that generically, there are four kinds of systemic actions that must be managed in order to maximize the bottleneck utilization at the productive systems. In the case of critical resources Offer the increase the production available time (T) and the bottleneck efficiency (µglobal) must be managed effectively. From the products demand processed in this resource, the cycle time (tp i ) from each product and the manufactured quantity (q i ) must be managed.

From the management point of view is suggested that the available times must be done by the professionals responsible by the Production Management and MPCSP - Material and Production Control, Scheduling and Planning from the most synchronized manner. The global efficiency improvements can be sought by the professionals related to TPM group, improvements group, Production Management and Supervision. The issues involving the products demand at the bottleneck in terms of products cycle time reduction can be dealt jointly with the Product and Process Engineering area and the Production Management. The question of quantities reduction could involve the Industrial Management, the commercial area and the MPCSP / Logistics area. 2.2 Demand and Capacity Relation Analysis at Industrial Companies According to the theoretical discussion considered at section 2.1 above, the resource Rough Gross Capacity is obtained from the multiplication of its nominal capacity (in terms of time - T) and the global efficiency index calculated for the same resource. By elaborating the spreadsheet showed at Figure 1, the resources actual capacities are obtained in time unit considering the specific resource global efficiency. In the case of productive resource products demand it can be calculated from the multiplication of cycle time and product quantities obtained from the information coming form the sale forecasts and performed orders generally called firm orders. The use of the spreadsheet showed in Figure 1 makes possible to identify the resources that cannot fulfill the demands forecasted.

Figure 1 Production Demand and Rough Gross Capacity Relation Analysis Where: t1a = cycle time at resource 1 to process product A; PMa = monthly scheduling to product A; t1a x PMa = monthly demand from resource 1 to manufacture the product A; D11 = total demand at resource 1 for month 1; µ g1 = Global Operational Productivity Index GOPI 1 at resource 1; C1 = production nominal capacity at resource 1; C1 x µ g1 = production actual capacity at resource 1; (C1 x µ g1 ) D11 = difference in time units between production actual capacity and forecast demand at resource 1 for month 1. In the spreadsheet above, by analyzing the equipment 1, it could verify that the products A, B, C and D are processed by the same resource, the cycle times are t1a, t1b, t1c e t1d and the monthly scheduling are PMa, PMb, PMc e PMd units, respectively. For the monthly scheduling forecast for month 1, the equipment 1 demand for products A, B, C 1 From the Portuguese term Índice de Rendimento Operacional Global IROG.

and D, in time unit, will be t1a x PMa, t1b x PMb, t1c x PMc e t1d x PMd, respectively. It totalize a monthly demand D11 (equipment 1 demand for month 1) in time units. Considering the Global Operational Productivity Index calculated for equipment 1 is µ g1 and the equipment nominal capacity, in time unit, is C1, the actual capacity of the same equipment will be µ g1 x C1, in time units too. If the monthly demand D11 is higher than actual capacity µ g1 x C1, the equipment 1 will be a restrictive resource due to its lack of of temporal capacity to fulfill the forecast demand. Otherwise, the same equipment will have idle capacity. In the other equipments, the same analysis is made, and the forecast for total monthly demand corresponds to the sum of forecasts monthly demand forecasts for each equipment. 2.3 Finite Production Scheduling The principal objective of a finite production scheduling system consists of the improvement of the definition of the production sequence for the shop floor. In order to reach the best scheduling activities, an improvement of utilization of available times at the resources (machines, workforce, tools, equipments, etc.) is sought, basically by a balanced distribution in terms of productive flow; Better scheduling also makes possible the reduction of the quantity of production constraints (bottlenecks), parts hold time in front of workplaces and total lead time for each batch at the shop floor. Therefore, the possibility of using (modeling) some substitute resources and alternative routes must be considered, so that the critical resources load (demand) can be diminished and shared with the others resources, minimizing the placed load for critical resources.

At this moment it is necessary to make a distinction between substitute resources and alternative routes. In a finite production scheduling system these two alternatives are feasible and considerable, once they can minimize the bottleneck demand, releasing more capacity to be used at the parts production. A substitute resource consists in the resource that can process all parts (or some) that the principal resource can process. However, the substitution generally is done only at one route of the production operation. For instance, Figure 2 presents the production route for part A, produced from the raw material X and it composed by 3 operations that use 3 specific machines. In the example, the resource MM2-SUBST replaces the principal resource MM2, only for operation 20 at the route of part A: Figure 2 Example of Substitute Resource (The Authors) Considering the same example, that is, the same route for part A, another possibility would be the definition of an alternative route for part A. In that case, when alternative routes are used, it is an indication that some change in the production process was occurred for that part or component. For instance, the part A could be produced from the routes showed at Figure 3a, with the first route (left one) is the principal route and the second route (right one) the alternative

route. It is important to emphasize that both routes produce exactly the same part, but from different manner (process). The Figure 3b also presents another kind of alternative route, which chooses to produce the part A internally or subcontract the service to manufacture the part A: Figure 3a e 3b - Examples of Alternatives Routes (The Authors) Another feature of finite production scheduling systems consists in the functionality of inventory allocation that could be indicated as follows: I1 Finished product inventory allocated at an order: in that case, the finished product inventory is also reserved and is allocated to a specific order / client; I2 Finished product generic inventory: the finished product has already concluded the manufacture process, but is still not allocated to any order, as the inventory allocation of the orders must be scheduled by the system (in the moment of production scheduling execution), according to pre-defined criteria like the orders due date;

I3 Work in process inventory between production lines or plants: the finite scheduling production systems allow indicating work in process inventories between production lines, factories, plants or areas. In that case, there are warehouses or intermediate deposits that will supply components to the system, according to the manufacturing criteria at operations locate up the production flow; I4 Work in process inventory between operations: this kind of inventories also work in product process. However, the inventories are indicated between production routes operations and are very important mostly to lines that contemplate the constraints (bottlenecks) of the productive system; I5 Raw material inventory located at storeroom: the operations at the beginning of the manufacturing process require materials to initiate the production process. Generally, these materials are stored at raw material storerooms, contemplating all purchase items. It is important to emphasize that the purchase items can also enter in the process along with the production flow, like in the case of a painting operation that will require the paints only in the moment that it will process the respective parts.; I6 Raw material inventory in transit: the finite scheduling production systems also must consider the raw material inventory already acquired (purchased) by the company, but still not physically available to be used by the industrial process. In other words, the purchase orders are already emitted, but the respective material was not yet arrived at company storeroom. In that case, it is necessary to indicate the material due date reception and quantity. Figure 4 presents schematically an example of inventories along with the production process of industrials companies:

Figure 4 Example of Inventories Positioning at the Productive System (The Authors) After a brief report of primary issues related to finite scheduling production, the principal concepts, principles and techniques associated with the Theory Of Constraints TOC in a general manner and with the TOC Production Scheduling in a more specific way will be given. 2.4 The Theory Of Constraints and the Production Scheduling The Theory Of Constraints is intimately linked with the Eliyahu M. Goldratt s work. Goldratt s involvement with the Business Administration, particularly with the Operations Management, starts from the development of a production scheduling software, the OPT Optimized Production Technology. The OPT software was released at the end of 70 s, and from that it undergone an intense improvement phase, making successive versions. As the software was

being developed, some innovative Operations Management concepts were also been formalized. In 1984 The Goal (Goldratt & Cox, 1994) was published, that presents in form of a novel, the Operations Management concepts produced from the development of OPT software. The principles formalized at the book remained knew by OPT Thinking (Rodrigues, 1990). The OPT Thinking initiated to be present as central focus at academic and professionals areas. In the course of time, it consolidated an approach more inclusive that in the OPT Thinking : the Theory Of Constraints. Although there were already some articles published related directly to TOC and to its focused steps, the TOC formalization occurred only in 1990, at the book What is This Thing Called Theory of Constraints (Goldratt, 1990). Goldratt & Cox (1994) affirm that the goal of a company is to gain money at the present and in the future. Goldratt (1994) places two conditions as necessary to achieve the goal: to satisfy the employees, at the present and at the future and to satisfy the costumers, at the present and at the future. A constraint is anything that limits the system in achieving the higher performance for reaching the goal (Goldratt, 1990). Thus, the system performance as a whole (or be, the company performance) is determined by the constraints. According to Umble & Srikanth (1990), the constraints can be of several categories. There are market, material, capacity, logistic, managerial and behavioral constraints (Umble & Srikanth, 1990). Goldratt (1990) wrote any improvement, not matter how great it is, is not sufficient. Only a continuous improvement process can support a business excellence performance at long term. Goldratt (1990) sustain that the TOC constitute of a continuous improvement process, once it look for the constraints raining constantly. From the TOC formalization, Goldratt went on to divulgate the Theory globally, in a serie of events promoted by Avraham Goldratt Institute

(AGI) 2. A constant Goldratt concern was the concepts absorption of OPT Thinking and the TOC. In this way, his work was marked by the use of a socratic approach in the implementation and popularization of the TOC. According to Gardiner et all (1994), the companies that implemented the TOC production approach moved the constraints to the market; however, felt the absence of adequate tools to treat the marketing issues. Also, Gardiner et all (1994) place that this reality...motivates Goldratt to develop a general problem solution method that could be applied to any business problem, so that allow to make possible the truly continuous improvement. The planned actions according to TOC principles for production scheduling primarily consists in primarily increasing the Throughput, than minimizes the Inventories and reduces the Operational Expenses. The sequence of priorities opposes the traditional logic of cost reduction. These focused actions induce an increase of the Global Performance Measurements, that is, the Net Profit, the Return On Investment and the Cash. According Torres (1999): The scheduled local actions will obviously follow the TOC and Synchronized Manufacturing principles that are means to give priority to the bottleneck utilization (Torres,1999, p. 53). Through the focused actions the critical resource productivity is sought so as to increase the Company Throughput. However, many companies do not take in consideration the differentiate treatment of critical and non-critical resources. Nowadays, there is a contradiction, as people are forced to maximize the non-critical resource utilization in order to follow the traditional performance measurements. This situation affects directly the inventories quantities. In a traditional system, the idle capacity, 2 The Avraham Goldratt Institute was created by Goldratt later the sale of OPT software for a British company named Scheduling Technologies Group Limited, at the second half of 80 s (Rodrigues, 1990). Later, in 2000, the STG was acquired by Manugistics Company.

both machine and people, represents inefficiency. This opposition between traditional measurement and TOC measurements represents one of the principal obstacles to the TOC implementation. The TOC approach to the production scheduling is accomplished by the Drum-Buffer-Rope algorithm and by the Buffers Management. From the OPT software development, Goldratt improved an algorithm able to obtain the production synchronization. The DBR logic recognizes that this constraint (generally the resource with lower capacity 3 ) will provide the production rate of the factory as a whole. Therefore, the resource(s) with lower capacity (generally) the bottleneck(s) must provide the production rhythm, in other words, in a metaphorical way it must be considered the factory Drum. Once identified the critical resource the Drum the resources that precede it will be pull to the same rhythm of the constraint, or a little higher. This represents the backward scheduling. After the bottleneck, the parts are pushed until the end of the productive system, representing the forward scheduling. From what is shown above it is clear that the constraints resources, represented by the Drum, must receive special treatment at the factory. These critical resources define, largely, the economic financial performance of the system as a whole. Thus, the Drum must be protected from eventual problems that could occur at machines that precede it. These problems can be exemplified by the process time variability, quality problems, crashed machine, material shortage, and others. At this point, it is important to observe that there is a necessity to create 3 At this moment is necessary to explain something about the identification of bottlenecks. Generally, the bottleneck is the resource with lower capacity, but it is not an absolute truth. It depends of several factors like the Global Operational Productivity Index GOPI. For instance, if a resource called MM1 has the capacity to produce 100 parts a day, but its GOPI is 50%. Otherwise, there is another resource (MM2) in which the capacity is 80 parts a day, but its GOPI is 70%. In that case, where is the constraint? The constraint is the resource MM1 due to its lower GOPI. The resource MM1 only produces 50 parts a day while the resource MM2 produces 56 parts a day.

some protection; otherwise, the Drum may remain unprotected and the economic financial performance of the system as a whole may be harmed. This protection will be called the Time Buffer, once it will assure the feed time to bottleneck for a certain time so that eventual problems noted at the operations that precede the bottleneck will not exceed the time allocate to Time Buffer. It allows that the Throughput of productive system to remain unaffected (Goldratt, 1989). However, only protections to critical resources are not sufficient. In that case, a second kind of buffer was developed, called Assembly Buffer. This new buffer is justified as it seeks to assure that all parts that are processed by the bottleneck will be really assembled. Soon, it is necessary to establish a buffer in front of all other lines that feed the assemblies lines that will process the parts that were processed by the bottleneck. The assembly time buffers exist to prevent eventual problems that could occur at any non-bottleneck line. This buffer is also very important, because it makes no sense to assure the critical resources processing if there is no protection to the parts assembly, specifically to these parts that were already were processed by the Drum. A third buffer is used by the TOC and is named Shipping Buffer. This buffer, placed right after the end of the productive flow and thus preceding the market, has the objective to make possible the products delivery inside the established time. Finally, the TOC logistic component is presented, the Rope. The objective of the Rope consists in signalizing the necessity of material release in order to feed the bottleneck and buffers that precedes the assembles lines. In other words, it consists in material release only at right quantities and at the right moment. The Rope component has the function of limiting the rate which the raw material is released to the factory (Goldratt, 1989, p. 98). The Ropes link the

operations where there are time buffers to the initial operations at the productive system, or those operations where the raw materials are released. The Figure 5 presents the DBR Method in a simplified manner: Figure 5 The Drum-Buffer-Rope Method (Source: Adapted from Rodrigues - 2000) The productive systems management by the DBR Method target to turn operational the TOC five focused steps at factory level. Its important to point out that it is a method that allows for the continuous improvements of the productive systems. 3. Production Planning and Scheduling Function Analysis Among the performed activities at Companies, the MPCSP - Material and Production Control, Scheduling and Planning of productive systems is one of the most complex and hard tasks in a company. This situation occurs due to the high number of involved variables, the dynamic of these system variables marked by constant changes and by the interdependence between these variables. In this way, it has the objective to distinguish the performed functions at the MPCSP

area, specifically concerning to the production planning process and production scheduling process. The MPCSP is a coordination department with several activities at productive system, and it is responsible for the necessary answer to four basics questions: What to produce? How much to produce? When to produce? Where to produce? The planning job implies at a detailed analysis of the Company relations to the Market Demand in order to conceive compatible products with the customers requirements in terms of strategic measurements: i) Production Price / Cost; ii) Quality; iii) Products Delivery Time Definition; v) Flexibility to proposed changes; and vi) To attend the technological innovations required by the market. According to the scope presented, the planning job is narrowly associated to the Company relation in front of the market. The planning area is the one responsible by the customers orders convening (due date definition) and it must be considered the factory capacity at the moment of delivery time definition. The present article intends to present the methodology (procedures) to define the factory capacity, basically looking for the actual capacity of the critical resources, considering the efficiency of these resources. In other words, the task consists in analyzing the production Rough Gross Capacity and the products demand noted by the company. From the basic product concept, becomes a fundamental task for detailing of the product design. This implies a complete creation of the Bill of Materials as well as the need to determine the possible production routes by the Process Engineering, that can be executed. These outputs

Master Scheduling Plan, Bill Of Materials and Production Routes are the basic entries to Production Scheduling. Furthermore, this information allows executing the Material Planning through software like MRP (Material Requirements Planning). The scheduling task is, certainly, the most complex activity needing the highest accuracy, detail and comprehension. This implies in the establishment of the exact timely attendance of sequence of operations through time, seeking the resources optimization and the maximization of the orders of customers. At this moment the production synchronization becomes the primary objective in terms of production scheduling process. 3.1. MPCSP Inter-Relationships As far as the issues involved with the comprehension and relationship of several areas of the company, are concerned the understanding of the problematic and the involvement of these areas are a decisive factors to the quality of the production scheduling. When the analysis of the existing inter-relationships among the several areas of the company and the MPCSP area, a question must be considered: the MPCSP must be centralized or decentralized? In order to analyze that question, brief considerations concerning the centralization and decentralization of the MPCSP function are presented. Basically, in terms of centralized MPCSP it some features can be evident generally inherent to it: The production plan is completely elaborated and made available by the MPCSP area; The material requirement planning is also developed by the MPCSP area;

All rescheduling needed before the release of the production plan and purchasing is accomplished by the MPCSP area; There are issues in terms of task subordination, that is, tasks originating from MPCSP area are delegated to others company areas. All activities and functions are performed by the MPCSP area, according to Figure 6: Figure 6 Centralized MPCSP (The Authors) Figure 7 presents the decentralized MPCSP scheme: Figure 7 Decentralized MPCSP (The Authors)

Some of the principal features of a decentralized MPCSP are: The specific problems solutions are performed by the own areas and not by the MPCSP; The rescheduling needed also is inclined to be performed by each area and not crossing by the MPCSP area; There is a relative autonomy in the performance of the scheduling tasks by the areas; The material, components and feeding parts is under coordination and accountability of each area. Thus, the MPCSP area only elaborates the preliminary production plan, which is passed on to others areas, without previous integration and it is not return to MPCSP. The preliminary plan is adapted and changed internally by each area. Obviously, the features of each company situation and reality must be kept, but in general logic, whether it is centralized or decentralized, is not completely sufficient or efficient in terms of the elaboration of a satisfactory production scheduling. There are qualities in both, like: in centralized MPCSP all information involved with the production scheduling is known by the responsible area, the MPCSP. Also, in a decentralized MPCSP there is less bureaucracy and more agility in terms of problem solutions. Thus, Figure 8 presents a complementary alternative in terms of inter-relationship of a MPCSP system in an industrial company:

Figure 8 Centralized / Integrated MPCSP (The Authors) Figure 8 presents the Centralized and Integrated MPCSP. The MPCSP activities are centralized in the area responsible by the tasks accomplishment of the production planning and scheduling, but there is an integration between others company areas and the MPCSP area. This integration occurs in two directions, that is, the MPCSP sent information to the other areas and these return and request information to MPCSP area. Thus, the principal features of both systems can be preserved and a better result could be achieved. 3.2 The Production Scheduling and Planning Operation This part has the objective to analyze the operational issues, namely, the operation of the scheduling and planning system in an integrated and synchronized manner. Figure 9 presents the operation logic between the activities and functions of the Production Scheduling and Planning:

Figure 9 Production Planning versus Scheduling (The Authors) Basically, the process begins by a query between the commercial area or costumers and the Planning area. The Planning area data base must be fed with the actual capacities of each factory lines / sectors and thereby the due data to the products / orders can be estimated with more accuracy. The Planning area must execute the orders convening according the factory capacity (it is important to emphasize that the factory capacity is not the theoretical capacity but the capacity considering the critical resources efficiencies) and returning a due date to each queried product. From the moment that the orders are confirmed by the Planning personnel, these are released to the Company Orders List that feeds the production scheduling. This is the Filtered Demand. The Filtered Demand feeds the scheduling in terms of demand / orders in order to execute the finite production scheduling. The other information needed to a finite production scheduling model also are fed, like: bill of materials, production routes, inventories allocation, etc. Then, the

finite production scheduling is performed and the Planning area is re-feed with the new information in terms of factory actual capacity. Finally, the finite production scheduling system creates the requirements in terms of production, that is, the activities lists to productive resources from the company productive system. These activity lists are made available to the factory (shop floor) in order to be placed in operation and continue the production. Finally, the activities lists must return to the corporative system in order to create manufacturing orders according to the specific features of each company, although this is not a mandatory practice. Thus, the Finite Production Scheduling and Planning Systems interact parallel and continually in order to create the best production plans, both macro / aggregate level (Rough Gross Capacity versus demand) and finite detail level, that is, the finite production scheduling. 4. Final Considerations The Authors presented the importance of the simultaneous calculus of the Production Aggregate Demand and the Rough Gross Capacity. A critical analysis of the obtained outputs will allow the identification of the resources that will limit the system global performance called bottleneck resources. From the identification of the constraints resources and from the calculus of its capacity, is possible to confront the demand needed to attend the existents orders in order to take the necessary actions that allow achieving the desire outputs at the Company. These actions are responsibility of the production planning personnel, at the MPCSP area. The production planning is responsible for the refinement of the demand before its production scheduling.

After this refinement, the production scheduling in a general way and the finite production scheduling in a specific way along with the other information necessary must consider that demand and allow elaborate the production plan to the factory. From that point, the next step consists in the operation of the production plan in the factory, or the manufacturing of the demanded products, following the logic of the scheduling determined by the Finite Production Scheduling System. Finally, it is necessary to explicit the internal inter-relationship of the MPCSP area and the relationship in terms of activities operation that involves the Production Planning and Scheduling. The authors emphasize and prove the importance of the set interaction of the Production Planning and Scheduling functions of an industrial company. References ANTUNES, José A.V. (1998). Em direção a uma teoria geral do processo na administração da produção: Uma discussão sobre a possibilidade de unificação da teoria das restrições e da teoria que sustenta a construção dos sistemas de produção com estoque zero. Porto Alegre. Tese de Doutorado em Administração, Universidade Federal do Rio Grande do Sul. ANTUNES, J. A. V. & KLIPPEL, M. (2001). Uma Abordagem para o Gerenciamento das Restrições dos Sistemas Produtivos: A Gestão Sistêmica, Unificada/Integrada e Voltada aos Resultados do Posto de Trabalho. XXI Encontro Nacional de Engenharia de Produção e VII International Conference on Industrial Engineering and Operations Managements, Salvador, Anais. GOLDRATT, Eliyahu M., COX, Jeff. (1997). A Meta. 12.ed. São Paulo: Educator.

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