Operations Management

Operations Management Short-Term Scheduling Chapter 15 15-1 Outline GLOAL COMPANY PROFILE: DELTA AIRLINES THE STRATEGIC IMPORTANCE OF SHORT- TERM SCHEDULING SCHEDULING ISSUES Forward and ackward Scheduling Scheduling Criteria SCHEDULING PROCESS-FOCUSED WORK CENTERS 15-2

Outline - Continued LOADING JOS IN WORK CENTERS Input-Output Control Gantt Charts Assignment Method SEQUENCING JOS IN WORK CENTERS Priority Rules for Dispatching Jobs Critical Ratio Sequencing N Jobs on Two Machines: Johnson s Rule 15-3 Outline - Continued LIMITATIONS OF RULE-ASED DISPATCHING SYSTEMS FINITE SCHEDULING THEORY OF CONSTRAINTS OTTLENECK WORK CENTERS REPETITIVE MANUFACTURING SCHEDULING FOR SERVICES Scheduling Service Employees with Cyclical Scheduling 15-4

Learning Objectives When you complete this chapter, you should be able to : Identify or Define: Gantt charts Assignment methods Sequencing rules Johnson s rules ottlenecks 15-5 Learning Objectives - continued When you complete this chapter, you should be able to : Describe or Explain: Scheduling Sequencing Shop loading Theory of constraints 15-6

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 15-7 Strategic Implications of Short-Term Scheduling y 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 that contributes to dependable delivery 15-8

Deals with timing of operations Short run focus: Hourly, daily, weekly Types Short-Term Scheduling Forward Scheduling ackward Scheduling E E Today Due Date Today Due Date 15-9 Short-Term Scheduling Examples Hospital Outpatient treatments Operating rooms University Instructors Classrooms Factory Production Purchases 15-10 1984-1994 T/Maker Co.

Scheduling Decisions Organization Mount Sinai Hospital Indiana University Lockheed-Martin Factory 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 15-11 Scheduling Decisions Organization Hard Rock Cafe Delta Airlines 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 15-12

Capacity Planning, Aggregate Scheduling, Master Schedule, and Short-Term Scheduling Capacity Planning 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 15-13 Forward and ackward 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 ackward scheduling: begins with the due date of the final operation; schedules jobs in reverse order used in many manufacturing environments, catering, and scheduling surgery 15-14

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 15-15 Choosing a Scheduling Method Qualitative factors Number and variety of jobs Complexity of jobs Nature of operations Quantitative criteria Average completion time Utilization (percentage of time facility is used) WIP inventory (average number of jobs in system) Customer waiting time (average lateness) 15-16

Scheduling Methods Differ by Process Process- Focused Repetitive- Focused Product- Focused Variety of Methods 15-17 Level Use Methods Process-Focused Work Centers High variety, low volume systems Products made to order Products need different materials and processing Complex production planning and control Production planning aspects Shop loading Job sequencing 15-18

Requirements for Scheduling Process-Focused Work Centers Schedule incoming orders without violating capacity constraints of individual work centers Check availability of tools and materials before releasing an order to a department Establish due dates for each job and check progress against need dates and order lead times Check work-in-progress as jobs move through the shop Provide feedback on plant and production activities Provide work-efficiency statistics and monitor operator times for payroll and labor distribution analyses 15-19 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 15-20

Process-Focused Planning System Forecast and Firm Orders Aggregate Production Planning Resource Availability Material Requirements Planning Master Production Scheduling No, modify CRP, MRP, or MPS Capacity Requirements Planning Realistic? Yes Shop Floor Schedules 15-21 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 and scheduling) capacity Assignment method job to specific work center 15-22

Input-Output Control Week Ending 6/6 6/13 6/20 6/27 7/4 7/11 Planned input 280 280 280 280 280 Actual input 270 250 280 285 280 Cumulative Deviation -10-40 -40-35 Planned Output 320 320 320 320 Actual Output 270 270 270 270 Cumulative Deviation -50-100 -150-200 Cumulative Change in acklog Explanation: 270 input, 270 output, implies 0 change 0-20 -10 -+5 Explanation: 250 input, 270 output implies 20 change (20 standard hours less in the work center) 15-23 Order Release egins Shop Loading Gross Requirements Scheduled Receipts Available Net Requirements 1 2 3 100 Release Order Yes Priority and Capacity OK? Planned Order Receipt No Planned Order Release 100 Hold Release Transparency Masters to accompanyheizer/render 15-24

Options for Managing Facility Workflow 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) 15-25 Gantt Load Chart Shows relative workload in facility Disadvantages Does not account for unexpected events Must be updated regularly Work Center M T W Th F Metal Works Job 349 Job 350 Mechanical Job D Job G Electronics Job Job H Painting Job C Job E Job I 15-26

Gantt Load Chart for Week of March 6 Shows relative workload in facility Disadvantages Does not account for unexpected events Must be updated regularly Day Work Center Metalworks Mechanical Electronics Painting Monday Job 349 Job 408 Job 295 Tuesday Job 349 Wednesday Job 408 Thursday Job 350 Job 406 Job 349 Friday Job 349 Processing Unscheduled 15-27 Center not available (for example, maintenance time, repairs, shortages) Job Job A Job Job C Gantt Scheduling Chart Day 1 Day 2 Day S T W T F S Maintenance Day 3 Day 4 Day 5 Day 6 Now Day 7 Start of an activity End of an activity Scheduled activity time allowed Actual work progress Nonproduction time Point in time when chart is reviewed 15-28

Assigns tasks or jobs to resources Type of linear programming model Objective Minimize total cost, time etc. Constraints Assignment Method 1 job per resource (e.g., machine) 1 resource (e.g., machine) per job 15-29 Assignment Method Four Steps 1 Subtract the smallest number in each row from every number in that row; then subtract the smallest number in every column from every number in that column 2 Draw the minimum number of vertical and horizontal straight lines necessary to cover all zeros in the table If the number of lines equals either the number of rows or the number of columns, then you can make an optimal assignment (Step 4) Otherwise: 3 Subtract the smallest number not covered by a line from every other uncovered number. Add the same number to any number(s) lying at the intersection of any two lines. Return to Step 2 4 Optimal assignments will always be at the zero locations of the table 15-30

Assignment Method Type Setter Example Typesetter A C Job R-34 $11 $14 $ 6 S-66 $ 8 $10 $11 T-50 $9 $12 $7 Initial set-up 15-31 Step 1a & 1b Typesetter Job R-34 A 5 8 C 0 Typesetter Job R-34 A 5 6 C 0 S-66 0 2 3 S-66 0 0 3 T-50 2 5 0 T-50 2 3 0 Step 1a Step 1b 15-32

Step 2 Typesetter Job A C R-34 5 6 0 S-66 0 0 3 T-50 2 3 0 Smallest uncovered number 15-33 Step 3 Typesetter A C Job R-34 3 4 0 S-66 0 0 5 T-50 0 1 0 Make assignments 15-34

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 Sequencing 15-36 Priority Rules for Dispatching Jobs FCFS EDD SPT LPT CR 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. 15-37

First Come, First Served Rule Process first job to arrive at a work center first Average performance on most scheduling criteria Appears fair and reasonable to customers Important for service organizations Example: Restaurants 15-38 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. 15-39

Longest Processing Time Rule Process job with longest processing time first Usually the least effective method of sequencing 15-40 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 15-41

Ratio of time remaining to work time remaining CR = = Critical Ratio (CR) 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 15-42 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 15-43

Criteria to Evaluate Priority Rules Average completion time = ΣFlow times # Jobs ΣProcess times Utilization = ΣFlow times Average number of jobs in the system = ΣFlow times ΣProcess times ΣLate times Average job lateness = Number of jobs 15-44 Job Sequencing Example Job A C D E Job Work Processing time in days 6 2 8 3 9 Job Due Date (day) 8 6 18 15 23 15-45

FCFS Parameter Average completion time Utilization Average number of jobs in the system Average job lateness Value 15.4 days 36.4% 2.75 jobs 2.2 days Sequence A C D E 15-46 SPT Parameter Average completion time Utilization Average number of jobs in the system Average job lateness Value 13 days 43.1% 2.32 jobs 1.8 days Sequence D A C E 15-47

EDD Parameter Average completion time Utilization Average number of jobs in the system Average job lateness Value 13.6 days 41.2% 2.43 jobs 1.2 days Sequence A D C E 15-48 LPT Parameter Average completion time Utilization Average number of jobs in the system Average job lateness Value 20.6 days 27.2% 3.68 jobs 9.6 days Sequence E C A D 15-49

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 15-50 Critical Ratio (CR) Job A Job Work Processing time in days 6 Job Due Date (day) 8 Critical Ratio 0.75 Sequence A C 2 6 0.33 E C 8 18 0.44 D 3 15 0.20 D E 9 23 0.39 15-51

Used to sequence N jobs through 2 machines in the same order Jobs (N = 3) Johnson s Rule Saw Drill Job A Job Job C 1995 Corel Corp. 1995 Corel Corp. 15-52 Johnson's Rule Scheduling N Jobs on Two Machines ➊ All jobs are to be listed, and the time each requires on a machine shown. ➋ Select the job with the shortest activity time. If the shortest time lies with the first machine, the job is scheduled first; if with the second machine, the job is scheduled last. ➌ Once a job is scheduled, eliminate it. ➍ Apply steps 2 3 to the remaining jobs, working toward the center of the sequence. 15-53

Johnson s Rule Steps List jobs and activity times Machine? 2 Schedule LAST Select job with shortest time 1 Schedule FIRST Ties? No Eliminate job from list Yes reak arbitrarily Yes Jobs left? No Stop 15-54 Johnson s Rule Example Job A C D E Work Center 1 (Drill Press) 5 3 8 10 7 Work Center 2 (Lathe) 2 6 4 7 12 15-55

Johnson s Rule Example Step 1 A Step 2 A Step 3 C A Step 4 D C A Step 5 E D C A 15-56 Graphical Depiction of Job Flow Time => Work center 1 Work center 2 Time => 0 3 10 20 28 33 E D C A E D C A 0 3 9 10 20 22 28 29 33 35 E D C A = Idle = Job completed 15-57

Limitations of Rule-ased Dispatching Systems Scheduling is dynamic; therefore, rules need to be revised to adjust to changes in process, equipment, product mix, and so on. 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. 15-58 Finite Scheduling System 15-59

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 15-60 Theory of Constraints A Five Step Process ➀Identify the constraints ➁Develop a plan for overcoming the identified constraints ➂Focus resources on accomplishing the constraints identified in step 2 ➃Reduce the effects of the constraints by offloading work or by expanding capability ➄Once one set of constraints is overcome, return to the first step and identify new constraints 15-61

ottleneck Work Centers ottleneck work centers have less capacity than prior or following work centers 1995 They limit production output Corel Corp. 15-62 Techniques for Dealing With ottlenecks 1. Increase the capacity of the constraint 2. Ensure well-trained and cross-trained employees are available to operate and maintain the work center causing the constraint 3. Develop alternate routings, processing procedures, or subcontractors 4. Move inspections and tests to a position just before the constraint 5. Schedule throughput to match the capacity of the bottleneck 15-63

The 10 Commandments for Correct Scheduling 1. Utilization of a non-bottleneck resource is determined not by its own capacity but by some other constraint in the system 2. Activating a resource is not synonymous with utilizing a resource 3. An hour lost at a bottleneck is an hour lost of the whole system 4. An hour saved at a non-bottleneck is a mirage 5. The transfer batch may not, and many times should not, be equal to the process batch 15-64 The 10 Commandments for Correct Scheduling 6. The amount processed should be verifiable and not fixed 7. Capacity and priority need to be considered simultaneously, not sequentially 8. Damage from unforeseen problems can be isolated and minimized 9. Plant capacity should not be balanced 10. The sum of the local optimums is not equal to the global optimum 15-65

Repetitive Manufacturing Advantages of Level Material Use Lower inventory levels, releasing capital for other uses Faster product throughput Improved component quality and hence improved product quality Reduced floor space requirements Improved communication among employees because they are closer together Smoother production process because large lots have not hidden the problems 15-66 Scheduling for Services Appointment systems doctor s office Reservations systems restaurant and car rental First come, first served deli Most critical first hospital trauma room 15-67

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 egin the schedule for one worker by scheduling the days off during the planning cycle (at a rate of two days per week on average) 15-68 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 15-69