CAPACITY MANAGEMENT

Nyoman Pujawan

• MRP is capacity intensive.

• Validation of MPS is important to establish a feasible schedule.

• Checking capacity sufficiency is done at MPS level and termed as Rough Cut Capacity Planning (RCCP)

Sales & OperationsPlanning

ResourcePlanning

Demand Management

Master ProductionScheduling

Detailed MaterialPlanning

Detailed CapacityPlanning

Material & CapacityPlans

Supplier SystemsShop-floorSystems

Ent

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Res

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lann

ingFront End

Engine

Back End

Sales & OperationsPlanning

ResourcePlanning

Demand Management

Master ProductionScheduling

Material Requirements

Planning

Rough Cut CapacityPlanning

Supplier Systems

Capacity requirementsPlanning

Ent

erpr

ise

Res

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ingFront End

Engine

Back EndShop scheduling

RCCP Techniques

• Capacity Planning using Overall Factors (CPOF)

• Bill of Labor Approach

• Resource Profile Approach

Capacity Planning using Overall Factors (CPOF)

• Three inputs are needed:– MPS– The time the total plant requires to produce one “typical” part– Historical proportion of total plant time required by each of the

key resources

• CPOF multiplies the “typical” time by the MPS quantity to obtain total time required in the entire plant to meet the MPS.

• This time is then prorated among the key resources by multiplying total plant time by the historical proportion of time used at a given work center.

• The company only produces one product family, i.e., lamps

• A typical lamp requires 0.22 standard hours of labor / machine time.

• Bill of Labor for Lamp LAXX– Lamp assembly 0.1 hr– Oven 0.01 hr– Base forming 0.05 hr– Plastic molding 0.02 hr– Socket assembly 0.04 hrTOTAL 0.22 hr

Month Total Prod.

x 0.22 Lamp Assy

Oven Base Forming Plastic Moldi

ng

Socket Assy

Historical Proportion

0.455 0.045 0.227 0.091 0.182

J 15000 3300 1501.5 148.5 749.1 300.3 600.6

F 15000 3300 1501.5 148.5 749.1 300.3 600.6

M 15000 3300 1501.5 148.5 749.1 300.3 600.6

A 15000 3300 1501.5 148.5 749.1 300.3 600.6

M 15000 3300 1501.5 148.5 749.1 300.3 600.6

J 15000 3300 1501.5 148.5 749.1 300.3 600.6

J 15000 3300 1501.5 148.5 749.1 300.3 600.6

A 16000 3520 1601.6 158.4 799.04 320.32 640.64

S 19000 4180 1901.9 188.1 948.86 380.38 760.76

O 19000 4180 1901.9 188.1 948.86 380.38 760.76

N 19000 4180 1901.9 188.1 948.86 380.38 760.76

D 19000 4180 1901.9 188.1 948.86 380.38 760.76

197000 Total Hours 19717.7 1950.3 9838.18 3943.94 7887.88

RCCP using the CPOF Approach

Bill of Labor Approach• Also known as Bill of Resources or Bill of Capacity• Is a listing by item number the amount of labor required

by a major labor category to produce that item or group of part numbers. It is not intended to be a routing, but merely a means of estimating the capacity requirements for a particular item. The BOL may be compiled for each distinct item or for group of similar items, and extended by the scheduled quantities to determine capacity requirements.

• In each department, calculate the time required by multiplying the time required in each department to produce a lamp by the number of lamps to produce in a month

Month Total Prod.

x 0.22 Lamp Assy

Oven Base Forming Plastic Molding

Socket Assy

BOL X 0.1 hr X 0.01 hr X 0.05 hr X 0.02 hr X 0.04 hr

J 15000 3300 1500 150 750 300 600

F 15000 3300 1500 150 750 300 600

M 15000 3300 1500 150 750 300 600

A 15000 3300 1500 150 750 300 600

M 15000 3300 1500 150 750 300 600

J 15000 3300 1500 150 750 300 600

J 15000 3300 1500 150 750 300 600

A 16000 3520 1600 160 800 320 640

S 19000 4180 1900 190 950 380 760

O 19000 4180 1900 190 950 380 760

N 19000 4180 1900 190 950 380 760

D 19000 4180 1900 190 950 380 760

197000 Total Hours 19700 1970 9850 3940 7880

RCCP using the BOL Approach

Resource Profile Approach

• Both of the previous techniques ignore lead-time offsets

• Here, we will consider it. Each BOL must be time phased in the resource profile approach.

Resource Profile for Lamp LAXX

Department Month before due date

2 1 0

Lamp assembly 0.1

Oven 0.01

Base forming 0.05

Plastic molding 0.02

Socket assembly 0.04

Month Total Prod.

x 0.22 Lamp Assy

Oven Base Forming Plastic Molding

Socket Assy

BOL X 0.1 hr X 0.01 hr X 0.05 hr X 0.02 hr X 0.04 hr

J 15000 3300 1500 150 750 300 600

F 15000 3300 1500 150 750 300 600

M 15000 3300 1500 150 750 300 600

A 15000 3300 1500 150 750 300 600

M 15000 3300 1500 150 750 300 600

J 15000 3300 1500 150 800 300 600

J 15000 3300 1500 160 950 320 640

A 16000 3520 1600 190 950 380 760

S 19000 4180 1900 190 950 380 760

O 19000 4180 1900 190 950 380 760

N 19000 4180 1900 190 0 380 760

D 19000 4180 1900 0 0 0 0

197000 Total Hours 19700 1820 8350 3640 7280

RCCP using the BOL Approach

Choosing an RCCP Technique

• Resource profile requires more computational time than the bill of labor approach, but for the case where lead times are long, the results are more accurate.

Example

• A product, W, has two operations, performed in WCs 1 and 2. The BOL and resource profile are as follows:

BOL

WC1 20WC2 30

Resource Profile

Work until due 1 0

WC1 20WC2 30

MPS Week1 2 3 4100 200 250 100

Develop Capacity Requirement using BOL and Resource Profile Approach

Determining Capacity Available

Factors affecting available capacity:• Time available• Utilization 1 minus the proportion of

time typically lost due to machine, worker, tool, or material unavailability

• Efficiency time standard / time actually needed to perform an operation

Capacity available = Time available x Utilization x Efficiency

Capacity Requirements Planning (CRP)

• Te function of establishing, measuring, and adjusting limits or levels of capacity …. The process of determining how much labor and machine resources are required to accomplish the task of production.

Closed-Loop MRP

MPS

CapacityOK?

MRP

CapacityOK?

Vendor control Detail Schedule

Input / Output Control

CRP

RCCP

CRP Logic

• MPS is exploded via MRP system

• Planned order release are taken from MRP system and used to perform a deterministic simulation of the time each order passes through each work station

• A machine load report is produced

Example of CRP

Level Part Qty/

Parent

Description

0 100 1 Finished product

1 110 2 Subassembly

2 121 6 Component A

2 122 10 Component B

Bill of Material

Item Master RecordItem Order

Quantity

On Hand On Order Due Date

Lead Time

Allocated

100 LFL 0 250 7/3 1 week 0

110 400 500 400 7/10 2 weeks 0

121 2400 1500 2400 7/10 3 weeks 0

122 6000 2500 6000 7/10 4 weeks 0

Work Center

Available Utilization Efficiency Planned Queue

1 2400 minutes 100% 100% 4 days

2 2400 minutes 100% 100% 4 days

3 2400 minutes 100% 100% 4 days

Work Center Master File

Part Work Center Setup Time / Lot Run Time / Piece

100 1 30 2.5

110 2 10 0.75

1 15 0.5

121 3 15 0.3

1 25 0.25

2 15 0.25

122 2 25 0.75

3 30 0.15

1 75 0.5

3 30 0.75

Routing Files

MPS for Part 100

1 2 3 4 5 6 7 8 9 10 11 12

QTY 250 200 250 150 200 300 150 250 200 200 250 200

WC 1 2 3 4 5 6 7 Average

1 2604 2083 2604 1562 2083 3125 1562 2232

2 2657 2125 2657 1594 2125 3188 1594 2277

3 2734 2187 2734 1640 2187 3281 1640 2343

RCCP

Item 100, LT = 1

0 1 2 3 4 5 6 7

Gross Req 250 200 250 150 200 300 150

Sched receipts 250

Projected OH 0 0 0 0 0 0 0 0

Planned release 200 250 150 200 300 150 250

Item 110, LT = 2

0 1 2 3 4 5 6 7

Gross Req 400 500 300 400 600 300 500

Sched receipts 400

Projected OH 500 100 0 100 100 0 100 0

Planned release 400 400 500 400 400 400 400

Fixed period, period to order = 1

Fixed quantity, MOQ = 400, Incremental = 100

Item 121, LT = 3

0 1 2 3 4 5 6 7

Gross Req 1200 1200 1200 1200 1200 1200 1200

Sched receipts 2400

Projected OH 1500 300 1500 0 1200 0 1200 0

Planned release 2400 0 2400 0 2400 2400 0

Item 122, LT = 4

0 1 2 3 4 5 6 7

Gross Req 2000 2000 2000 2000 2000 2000 2000

Sched receipts 6000

Projected OH 2500 500 4500 2000 0 4000 2000 0

Planned release 6000 0 0 6000 0 0 0

Fixed quantity, quantity to order = 2400

Fixed quantity, Quantity to order = 6000

1 2 3 4 5 6 7

100 200 250 150 200 300 150 250

110 400 400 500 400 400 400 400

121 2400 0 2400 0 2400 2400 0

122 6000 0 0 6000 0 0 0

Planned Order Release

• POR is lumpy for items 121 and 122.• This could cause problems with the shop floor uneven flow of work.• CRP is needed even when RCCP has been properly developed, to determine whether batching orders for components has created an uneven flow of work.

CRP Computation

• A separate calculation for setup time and run time

• Each operation has one week lead time• Setup matrix is created directly from

Planned Order Release in MRP system and Routing Files

• Example: Part 122 (6000 is to be released in wek 1). From routing file, 122 is routed to WC2, WC3, WC1, and back to WC3.

1 2 3 4 5 6 7

WC1 100 30 30 30 30 30 30 30

110 0 15 15 15 15 15 15

121 0 25 0 25 0 25 25

122 0 0 75 0 0 75 0

Total 30 70 120 70 45 145 70

WC2 100 0 0 0 0 0 0 0

110 10 10 10 10 10 10 10

121 0 0 15 0 15 0 15

122 25 0 0 25 0 0 0

Total 35 10 25 35 25 10 25

WC3 100 0 0 0 0 0 0 0

110 0 0 0 0 0 0 0

121 15 0 15 0 15 15 0

122 0 30 0 30 30 0 30

Total 15 30 15 30 45 15 30

Setup Time Matrices

1 2 3 4 5 6 7

WC1 100 500 625 375 500 750 375 625

110 0 200 200 250 200 200 200

121 0 600 0 600 0 600 600

122 0 0 3000 0 0 3000 0

Total 500 1425 3575 1350 950 4175 1425

WC2 100 0 0 0 0 0 0 0

110 300 300 375 300 300 300 300

121 0 0 600 0 600 0 600

122 4500 0 0 4500 0 0 0

Total 4800 300 975 4800 900 300 900

WC3 100 0 0 0 0 0 0 0

110 0 0 0 0 0 0 0

121 600 0 600 0 600 600 0

122 0 900 0 2100 900 0 2100

Total 600 900 600 2100 1500 600 2100

Run Time Matrices = Quantity x Run Time / Unit

1 2 3 4 5 6 7

WC1 530 1495 3695 1420 995 4320 1495

WC2 4835 310 1000 4835 925 310 925

WC3 615 930 615 2130 1545 615 2130

Capacity requirements of Planned Release (Setup + Run Times)

Part WC Week Setup Time

Run Time Calculation

Run Time Total Time

100 1 1 30 250 x 2.5 625 655

110 2 1 10 400 x 0.75 300 310

110 1 2 15 400 x 0.5 200 215

121 1 1 25 2400 x 0.25 600 625

121 2 2 15 2400 x 0.25 600 615

122 1 1 75 6000 x 0.5 3000 3075

122 3 2 30 6000 x 0.75 4500 4530

Capacity required by Released Orders

WC Week 1 Week 2

1 4355 215

2 310 615

3 0 4530

1 2 3 4 5 6 7

WC1 4885 1710 3695 1420 995 4320 1495

WC2 5145 925 1000 4835 925 310 925

WC3 615 5460 615 2130 1545 615 2130

Summary of Released Order Capacity Requirements

Capacity Requirements Plan (Overall)

Available Vs Required Capacity

0

1000

2000

3000

4000

5000

6000

1 2 3 4 5 6 7

WC1

WC2

WC3

Available capacity