Operations Management

Short-Term SchedulingChapter 15

Learning ObjectivesWhen you complete this chapter, you

should be able to :Identify or Define:

– Gantt charts– Assignment method– Sequencing rules– Johnson’s rules– Bottlenecks

Learning Objectives - continuedWhen you complete this chapter, you

should be able to :

Describe or Explain:– Scheduling– Sequencing– Shop loading– Theory of constraints

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 (per year)

Strategic Implications of Short-Term Scheduling

• By 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 which contributes to dependable delivery

• Deals with timing of operations

• Short run focus: Hourly, daily, weekly

• Types

TodayToday Due Date

BB EE

Forward SchedulingForward Scheduling

TodayToday Due Date

BB EE

Backward SchedulingBackward Scheduling

Short-Term Scheduling

• Hospital– Outpatient treatments– Operating rooms

• University– Instructors– Classrooms

• Factory– Production– Purchases

© 1984-1994 T/Maker Co.

Short-Term Scheduling Examples

Organization Managers Must Schedule

Operating room usePatient admissionNursing, security, maintenance staffsOutpatient treatments

Classrooms and audiovisual equipmentStudent and instructor schedulesGraduate and undergraduate courses

Production of goodsPurchase of materialsWorkers

Scheduling Decisions

• Mount Sinai Hospital

• Indiana University

• Lockheed-Martin Factory

Organization Managers Must Schedule

Chefs, waiters,bartendersDelivery of fresh foodsEntertainersOpening of dining areas

Maintenance of aircraftDeparture timetablesFlight crews, catering, gate, and ticketing personnel

Scheduling Decisions

• Hard Rock Cafe

• Delta Airlines

Capacity Planning, Aggregate Scheduling, Master Schedule, and Short-Term Scheduling

Capacity Planning 1. Facility size 2. Equipment procurement

Aggregate Scheduling 1. Facility utilization 2. Personnel needs 3. Subcontracting

Master Schedule 1. MRP 2. Disaggregation of master plan

Long-term

Intermediate-term

Short-term

Intermediate-term

Short-term Scheduling 1. Work center loading 2. Job sequencing

Forward and Backward 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

• Backward scheduling: begins with the due date of the final operation; schedules jobs in reverse order– used in many manufacturing environments, catering,

scheduling surgery

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

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

• 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 & scheduling) - capacity– Assignment method - job to specific work center

Loading Jobs in Work Centers

Options for Managing Facility Work Flow

• 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)

Gantt Scheduling ChartStart of an activity

Scheduled activity time allowed

Point in time when chart is reviewed

S T W T F SDay

Job

Job A

Job B

Job C

Maintenance

Now

End of an activity

Actual work progress

Non-production time

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

• Assigns tasks or jobs to resources

• Type of linear programming model– Objective

• Minimize total cost, time etc.

– Constraints• 1 job per resource (e.g., machine)

• 1 resource (e.g., machine) per job

Assignment Method

Production Control Production

Which job do I run next?

Dispatch ListOrder Part Due QtyXYZ 6014 123 100ABC 6020 124 50

Job PacketJob XYZ

Order release

Sequencing Challenge

• 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

Priority Rules for Dispatching Jobs 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.

FCFS

EDD

SPT

LPT

CR

• Process first job to arrive at a work center first

• Average performance on most scheduling criteria

• Appears ‘fair’ & reasonable to customers– Important for service organizations

• Example: Restaurants

First Come, First Served Rule

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.

Longest Processing Time Rule

• Process job with longest processing time first.

• Usually the least effective method of sequencing.

• 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

Earliest Due Date Rule

Ratio of time remaining to work time Ratio of time remaining to work time remainingremaining

• Process job with smallest CR first

• Performs well on average lateness

CR Time remainingWork days remaining

Due date - Today' s dateWork (lead ) time remaining

=

=

Critical Ratio (CR)

Advantages of the Critical RatioScheduling 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

Job Sequencing Example

Job Job Work

Processing time in days

Job Due Date (day)

A 6 8

B 2 6

C 8 18

D 3 15

E 9 23

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

Critical Ratio (CR)Job Job Work

Processing time in

days

Job Due Date (day)

Critical Ratio

A 6 8 0.75

B 2 6 0.33

C 8 18 0.44

D 3 15 0.20

E 9 23 0.39

Sequence

A

C

E

B

D

• Used to sequence N jobs through 2 machines in the same order

© 1995 Corel Corp.

© 1995 Corel Corp.

Saw Drill

Job AJob A

Job BJob B

Job CJob C

Jobs (N = 3)

Johnson’s Rule

Graphical Depiction of Job Flow

B E D C A

B E D C A

Work center 1

Work center 2

0 3 10 20 28 33

0 3 9 10 20 22 28 29 33 35Time =>

Time =>

B E D C A

= Job completed= Idle

Limitations of Rule-Based Dispatching Systems

• Scheduling is dynamic; therefore, rules need to be revised to adjust to changes in process, equipment, product mix, etc.

• 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

Finite Scheduling System

• 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

Theory of Constraints

Theory of ConstraintsA Five Step Process

Identify the constraintsDevelop a plan for overcoming the identified

constraintsFocus resources on accomplishing the constraints

identified in step 2Reduce the effects of the constraints by off-

loading work or by expanding capabilityOnce one set of constraints is overcome, return to

the first step and identify new constraints

• Bottleneck work centers have less capacity than prior or following work centers

• They limit production output

© 1995 Corel Corp.

Bottleneck Work Centers

Techniques for Dealing With Bottlenecks

1. Increase the capacity of the constraint2. 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

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 mirage5. The transfer batch may not, and many times

should not, be equal to the process batch

The 10 Commandments for The 10 Commandments for Correct SchedulingCorrect 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

Scheduling for Services

• Appointment systems - doctor’s office

• Reservations systems - restaurant, car rental

• First come, first served - deli

• Most critical first - hospital trauma room

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

• Begin the schedule for one worker by scheduling the days off during the planning cycle (at a rate of 2 days per week on average)

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

Operations Management

Just-in-Time and Lean Production Systems

Chapter 16

Learning Objectives

When you complete this supplement, you should be able to :

Identify, Describe or Explain:– Just-in-Time (JIT) philosophy– Lean Production

Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’

— Shoichiro Toyoda President, Toyota

© 1995 Corel Corp.

Introductory Quotation

Green Gear Cycling

• Designs and manufacturers high performance travel bicycles (bike-in-a-suitcase!)

• Strategy is mass customization with low inventory, work cells, and elimination of machine setups.

• Major focus on JIT and supply-chain management.

• Two lines with seven work cells• One day throughput time• Focus on quality

• Management philosophy of continuous and forced problem solving

• Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.

What is Just-in-Time?

Lean Production

• Lean Production supplies customers with exactly what the customer wants, when the customer wants, without waste, through continuous improvement.

• Overproduction

• Waiting

• Transportation

• Inefficient processing

• Inventory

• Unnecessary motion

• Product defects

Types of Waste

Variability Occurs Because• Employees, machines, and suppliers produce units

that do not conform to standards, are late, or are not the proper quantity

• Engineering drawings or specifications are inaccurate

• Production personnel try to produce before drawings or specifications are complete

• Customer demands are unknown

Results

• Queue and delay reduction, speedier throughput, freed assets, and winning orders

• Quality improvement, reduces waste and wins orders• Cost reduction increases margin or reduces selling price• Variability reductions in the workplace reduces waste

and wins orders• Rework reduction, reduces waste and wins orders

Yielding

Faster response to the customer at lower cost and higher quality

A competitive advantage!

Suppliers

Preventive Maintenance

Layout

Inventory

Scheduling

Quality

Employee Empowerment

JIT

Just-in-TimeSuccess Factors

Goals of JIT partnerships

Elimination of unnecessary activitiesElimination of in-plant inventoryElimination of in-transit inventoryElimination of poor suppliers

• Diversification

• Poor customer scheduling

• Frequent engineering changes

• Quality assurance

• Small lot sizes

• Physical proximity

Concerns of Suppliers

• Traditional: inventory exists in case problems arise

• JIT objective: eliminate inventory• JIT requires

– Small lot sizes– Low setup time– Containers for fixed number of parts

• JIT inventory: Minimum inventory to keep system running

Inventory

• Japanese word for card– Pronounced ‘kahn-bahn’ (not ‘can-ban’)

• Authorizes production from downstream operations– ‘Pulls’ material through plant

• May be a card, flag, verbal signal etc.• Used often with fixed-size containers

– Add or remove containers to change production rate

Kanban

• JIT exposes quality problems by reducing inventory

• JIT limits number defects with small lots• JIT requires TQM

– Statistical process control– Worker involvement

• Inspect own work• Quality circles

– Immediate feedback

Quality

JIT Quality Tactics

• Use statistical process control

• Empower employees

• Build failsafe methods (poka-yoke, checklists, etc.)

• Provide immediate feedback

• Get employees involved in product & process improvements– Employees know job best!

• JIT requires– Empowerment

– Cross-training

– Training support

– Few job classifications

© 1995 Corel Corp.

Employee Empowerment

JIT in ServicesAll the techniques

used in manufacturing are used in services

SuppliersSuppliers

LayoutsLayouts

InventoryInventory

SchedulingScheduling

Attributes of Lean Producers - They

• use JIT to eliminate virtually all inventory• build systems to help employees product a perfect part

every time• reduce space requirements• develop close relationships with suppliers• educate suppliers• eliminate all but value-added activities• develop the workforce• make jobs more challenging• reduce the number of job classes and build worker

flexibility

Operations Management

Maintenance and ReliabilityChapter 17

Learning ObjectivesWhen you complete this chapter, you

should be able to :

Identify or Define: – Maintenance– Mean time between failures– Redundancy– Preventive maintenance– Breakdown maintenance– Infant mortality

Learning Objectives - continued

When you complete this chapter, you should be able to :

Describe or Explain:– How to measure system reliability– How to improve maintenance– How to evaluate maintenance

performance

NASA• Maintenance of space shuttles• Columbia:

– 86,000,000 miles on odometer– 3 engines each the size of a VW– expected to make dozens more launches

• Maintenance requires– 600 computer generated maintenance jobs– 3-month turnaround– More than 100 people

• All activities involved in keeping a system’s equipment working

• Objective: Maintain system capability & minimize total costs

© 1995 Corel Corp.

Maintenance Management

The Strategic Importance of Maintenance and Reliability

• Failure has far reaching effects on a firm’s– operation– reputation– profitability– customers– product– employees– profits

Maintenance Procedures

Employee Involvement

Maintenance PerformanceMaintenance Performance

© 1995 Corel Corp.

© 1995 Corel Corp.

Maintenance Performance

Good Maintenance & Reliability Strategy• Requires:

– Employee involvement– Maintenance and reliability procedures

• To yield:– Reduced inventory– Improved quality– Improved capacity– Reputation for quality– Continuous improvement

Lower operating

costs

Continuous improvement

Faster, more dependable throughput

Higher productivity

Improved quality

Improved capacity

Reduced inventory

Maintenance

Maintenance Benefits

• How much preventive & breakdown maintenance

• Who performs maintenance– Centralized, decentralized, operator etc.– Contract or in-house

• When to replace or repair• How much to replace

– Individual or group replacement

Maintenance Decisions

Preventive Breakdown

Routine inspection & servicing

Prevents failures Bases for doing

Time: Every day Usage: Every 300 pieces Inspection: Control chart

deviations

• Non-routine inspection & servicing

• Remedial

• Basis for doing– Equipment failure

Types of Maintenance

A Computerized Maintenance System

Contract for Preventive Maintenance

• Compute the expected number of breakdowns without the service contract

• Compute the expected breakdown cost per month with no preventive maintenance contract

• Compute the cost of preventive maintenance

• Compare the two options

Operations Manager Must Determine How Maintenance Will

be Performed

Operator Maintenance Department

Manufacturer’s field service

Depot Service (return equipment)

Competence is higher as we more

to the rightPreventive maintenance costs less and is faster as we move to the left

A Key To Success

High utilization of facilities, tight scheduling, low inventory and consistent quality demand reliability - total preventive maintenance is the key to reliability.

Techniques for Establishing Maintenance Policies

• Simulation - enables one to evaluate the impact of various maintenance policies

• Expert systems - can be used by staff to help diagnose faults in machinery and equipment

Lets finish with Discussion Questions

Page 632

Questions 1-5 & 10

1. The objective of maintenance and reliability is to maintain the capability of the system while controlling costs.

2. Candidates for preventive maintenance can be identified by looking at the distributions for MTBF (mean time between failure).

If the distributions have a small standard deviation, they are usually a candidate for preventive maintenance.

3. Infant mortality refers to the high rate of failures that exists for many products when they are relatively new.

4. Simulation is an appropriate technique with which to investigate maintenance problems because failures tend to occur randomly, and the probability of occurrence is often described by a probability distribution that is difficult to employ in a closed-form mathematical solution.

5. Training of operators to perform maintenance may improve morale and commitment of the individual to the job or organization. On the other hand, all operators are not capable of performing the necessary maintenance functions or they may perform them less efficiently than a specialist. In addition, it is not always cost effective to purchase the necessary special equipment for the operator’s use.

10. Only when preventive maintenance occurs prior to all outliers of the failure distribution will preventive maintenance preclude all failures. Even though most breakdowns of a component may occur after time, some of them may occur earlier. The earlier breakdowns may not be eliminated by the preventive maintenance policy. A distribution of natural causes exists.

Best wishes on your final!More than that – I wish you

success in your careers!

• Chapters– 1&2

– 11-17

• Be sure to bring!– Blue Book

– Scan-tron• Short form