Julien-Robert Lecadou |lecadou@gmail.com

PRODUCTION SCHEDULING WITH

MICROSOFT DYNAMICS AX PART II &III

Customizing Job Shop scheduling using Microsoft Dynamics AX 2009

How to implement a production scheduling engine using Microsoft Dynamics AX 2009?

The Part II and III of this discussion will be focused on:

The presentation of the blown film manufacturing process

The description of the Manufacturing Planning and Control System

II. Part II: Blown Film Manufacturing Process

A. Questionnaire We interviewed the users in order to have a better understanding of the current manufacturing and planning system.

Below are the questions that we’ll use to interview the people that are in charge of the production planning and scheduling.

1. Leger account What is the leger accounts number of the following entries?

Leger Account group Account – WIP Account Costing WIP Issue Issue WIP Account Offset Account

2. Extruder capacity What are the factors that determine the throughput capacity of an extruder?

What should be the daily maximum capacity of each machine?

What should be the minimum capacity required to run each work center?

3. Setup time on an extruder What are the factors that influence the setup time?

We noticed that it usually takes between 15 to 30 min to calibrate an extruder from the starting point up to its optimum run range.

Is this the right time interval or does the “startup time” differ from one machine to another?

4. Preferred Material Is there any preferred material for some machines?

Which material can only run on one machine and what is the minimum load required to start production?

5. Downstream Equipment Which production lines use specific downstream equipment? If there is any, can we have the list of Machines attached to the downstream equipment?

6. Width and Gauge What are the minimum and maximum width and gauge for each work center?

7. Number of web on production line What are the factors that influence the choice of the number of web on a production line? For example, we have noticed that the gauge, width and the total weight of a production order influence the choice of an extruder thus the number of web. We would like to have more details on how to control the number of web.

8. Setup time by Material What is the general setup time from one material to another? For example what is the setup time from LLRC to LLRB?

9. Setup time by color What is the general setup time from one color to another? For example what is the setup time from Red or black to clear?

10. Term and Definition

Production Line: A Production line is composed of an extruder and the downstream equipment.

B. Understand the Blown Plastic Manufacturing process We used the model below to capture the main transactions that occur during the production scheduling process.

1. Plastic Bags properties This diagram helps in explaining how the machines are selected using our customized scheduling engine.

Each plastic bag has the following attribute:

1. Width in inch 2. Gauge in mil 3. Color 4. Main material 5. And the bag specs which can be individually folded, star seal and more 6. Packing type which can be separated or rolls

1. 2. Fig 3: Plastic bag physical properties 3.

2. Blown Film Extrusion Description The equipment used in blown film extrusion is shown below. The method of making blown film distinguishes the process from other extrusion methods. The unique features about a blown film extrusion line are the die, the method of cooling the film, the collapsing tower, and the film winder.

Fig 4: Blown Film Line

Air is introduced through a hole in the center of the die to blow up the tube like a balloon. A high speed air ring mounted on top of the die blows into the hot film to cool it. The collapsing frame takes the bubble and collapses the tubular film before it is pulled through the nip rolls. The tube is flattened to create what is known as a "lay-flat" tube. The lay flat tube is taken back down the extrusion town via idler rolls. The film is either kept as such or the edges are slit off to produce two flat film sheets and wound into reels.

3. Extruder blower properties For every machine (Extruder), we have the following properties:

o A minimum and maximum width of the film that can be blown (Bubble Diameter)

o A minimum and maximum plastic film gauge o The preferred and restricted material o And finally the minimum and maximum output capacity

Fig 5: Blow film bubble

4. Plastic Film extrusion downstream equipment properties For every tool, we have the following properties:

o Min / Max Width o Preferred Production Line o Master Route

FIG 6.1: FIG SEPARATOR TOOL (SHEETING) FIG 6.2 WINDING TOOLS

5. Production Line example The figure 6 below is an example of a production line. This production line is composed of:

• A Blown extruder • Winding machine (tool)

The winding machine can be moveable. If a tool is moveable, we can say that our production line is configurable. The configuration of the production line will depend on the finished goods scheduled to be produced.

Fig 7: Production line with winder

6. Process Summary From what we’ve written above, we now understand that the production scheduling is dependent of three major components:

- The item or finished goods properties - The extruder (blown film extruder) properties - The downstream equipment properties

The primary focus of the scheduling engine would be to optimize the usage of the extruders and also reduce the amount of scrap created during the processing activities. The secondary area attention would be allocating the downstream equipment to the production line and focusing on reducing the number of their travel from one production to another. Finally, manufacture the right finished goods at the optimal process time.

III. Part III: Manufacturing Planning and Control System In this section, we will introduce the notions around the manufacturing planning and control system. We will discuss about the master scheduling, material requirement planning, and the capacity management.

Priority Capacity PRODUCTION

PLAN RESOURCE

PLAN

Long Range

PLAN

MASTER PRODUCTION

PLAN

ROUGH-CUT CAPACITY

PLAN

Medium Range

MATERIAL

REQUIREMENTS PLAN

CAPACITY MANAGEMENT

PLAN

IMPLEMENT/ CONTROL

Short Range

PRODUCTION

ACTIVITY CONTROL

CAPACITY CONTROL

Short Range

Fig 8: Planning levels

The figure 8 is the illustration of the interrelationship between the Material and Capacity Management. For example the master production plan is dependent upon the rough-cut capacity plan. We will explain each notion and show how they are related.

Fig 9: Requirements and Capacity relation process flow

Fig 10: Manufacturing Planning and Control System

A. Strategic Business Plan The strategic business plan is a statement of the major goals and objectives the company expects to achieve over the next 2 to 10 years or more. It is a statement of the broad directions of the firm and shows the kind of business—product lines, markets, and so on—the firm wants to do in the future. The plan gives general directions about how the company hopes to achieve these objectives. It is based upon a long range of forecasts and includes participation from marketing, finance, production, and engineering. We will not discuss the details of the strategic business plan because it is out of the scope of this document. We emphasize on this point to show the different factors to consider when you are implementing a Production scheduling solution.

B. Production Plan Given the objectives set by the strategic business plan, the production management is concerned by the following:

INPUT OUTPUT Business Plan Financial Plan Marketing Plan Capacity

PRODUCTION PLAN Aggregate Plan • By-Product Groups • Inventory Levels

Production Plan Forecasts Customer Orders Inventory Capacity

MASTER PRODUCTION

SCHEDULE

Detailed Plan • By Week • By End Item

MPS, Item Master Drawing / specs. Bill of Materials Inventory, Capacity/ Routing Work center master Requirements Operations details

MATERIAL REQUIREMENTS

PLAN

Time-Phased Manufacturing and Purchase Orders • For Raw Material • For Components

PURCHASING

PRODUCTION ACTIVITY CONTROL

- The quantities of each product group that must be produced in each period. - The desired inventory levels. - The resources of equipment, labor, and material needed in each period. - The availability of the resources needed.

Production planners must devise a plan to satisfy the market demand with the resources available to the company. This will involve determining the resources needed to meet market demand, comparing the results to the available resources, and devising a plan to balance requirements and availability.

This process of determining the resources required and comparing them to the available resources takes place at each of the planning levels and is the problem of capacity management. For effective planning, there must be a balance between priority and capacity.

C. Master Production Scheduling The master production schedule (MPS) is a plan for the production of individual end items. It breaks down the production plan to show, for each period, the quantity of each end item to be made. Inputs to the MPS are the production plan, the forecast for individual end items, sales orders, inventories, and existing capacity.

The level of detail required by the MPS is higher than the one for the production plan. Whereas the production plan was based upon families of products (Low Density, High density or Retail trash bags), the master production schedule is developed for individual end items (each individual trash bag Item for example PVC33-33). The Planning horizon usually extends from 3 to 18 months but primarily depends on the purchasing and manufacturing lead times. The term master scheduling describes the process of developing a master production schedule. The term master production schedule (MPS) is the end result of this process. Usually, the plans are reviewed and changed weekly or monthly.

Once the preliminary master production schedules are made, they must be checked against the available capacity. This process is called rough-cut capacity planning.

Fig 12: Master Production Scheduling

The Fig 12 describes the flow of the different activities that are rendered to finally have a MPS.

1. Customer Order Process Every working day, the Sales department takes orders from the company’s customers. The orders are processed. At the end the process, the sales agent gives the approximate time of delivery. This lead time can be based on two principles.

o Dynamics AX will calculate the Advance-To-Promise (ATP) and the result will give the best availability time.

o Or the company can establish lead time policies depending on the type of items ordered by the customers.

Customers’ order process handling helps in evaluating the quantity of Customs and Stock of Items needed to be manufactured.

Fig 13 Customer Orders Process Flow

2. Inventory Replenishment The inventory replenishment process is the process by which the amount of stock of the items required is calculated. The replenishment process calculates the quantity of finished goods needed back in the inventory. This quantity is based on the safety stock for each item. The formula used to calculate the quantity of replenishment for each item is shown below:

𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑄𝑄𝑄𝑄𝑄𝑄 = 𝑄𝑄𝑄𝑄𝑄𝑄 𝑂𝑂𝑂𝑂ℎ𝑎𝑎𝑂𝑂𝑅𝑅 − 𝑄𝑄𝑄𝑄𝑄𝑄 𝑂𝑂𝑂𝑂 𝑂𝑂𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 − 𝑅𝑅𝑄𝑄𝑄𝑄 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 − 𝑆𝑆𝑎𝑎𝑆𝑆𝑅𝑅𝑄𝑄𝑄𝑄 𝑅𝑅𝑄𝑄𝑠𝑠𝑠𝑠𝑠𝑠 𝑅𝑅𝑄𝑄𝑄𝑄

Qty On-Hand: Count of an individual item currently available in the inventory Qty On Order: Quantity of items ordered by customers for each individual item Qty Reserved: Count of items available in the inventory but currently reserved for an order Safety Stock Qty: or Buffer qty: This is the quantity of items required to be kept in the inventory in order to avoid materials running out stock out.

Fig 14 Inventory Replenishment Process

The Fig 14 illustrates the process by which the replenishment orders are created. In our case, the replenishment process is handled by the sales department. The sales manager for example, will review every morning the items that need some attention and request production orders that will help put these stock of items back into the inventory.

Not every item that is running out of stock will be replenished, mainly because there are several factors that determine the replenishment of an item back into the inventory, for example the seasonality of an item and/or also because of its recent sales’ trend.

Let’s assume that Item ABC sales has increased the last 30 days by 20 %. The replenishment system could recommend that we only need to manufacture 200 cases back into the inventory based on the safety stock level. The Sales Manager could order the production of 300 cases instead.

Even though the recommendation from the system is not wrong, these type of conditions require human attention. For this reason the Sales Manager needs to supervise the replenishment process and enter the quantities that are in line with the recent trends of the market.

Par-Level Calculation

Fig 15 Par Level calculation Process

The PAR level stands for “Periodic Automatic Replenishment.”

PAR level refers to the exact amount of product you should have in stock to meet demands.

PAR levels are boundary markers in inventory levels that signal if any replenishment is necessary.

D. Rough-cut Capacity Planning The Rough-cut capacity planning checks whether critical resources are available to support the preliminary master production schedules. Critical resources include bottle –neck operations, labor, and critical material.

Let’s assume that the preliminary MPS indicates that we will need 2,000,000 lbs. of plastics bag a month for the next 6 month. The rough-cut capacity planning will evaluate the time that should be allocated to each resource during for the next 6 months in order to fulfil the future customers’ requests.

Hence, the purpose of rough-cut capacity planning is to check the feasibility of the MPS, provide warnings of any bottlenecks, ensure utilization of work centers, and advise vendors of capacity requirements

E. Material Requirement Planning The material requirements plan (MRP) is the process following master production scheduling. The MRP main goal is to set priorities and determine the material requirements.

Plastic trash bags are manufactured using materials such as Resin, Repro, Calcium and more. The MRP evaluates the quantity of each material needed in order to have the finished good items.

The inputs (Fig16) necessary to calculate the MRP are:

- The Master Production Scheduling - Bill of Materials ( BOM Explosion) - The Raw material and finished goods Inventory - Capacity Requirement Planning - Order Process Planning

We have already mentioned the MPS in the preceding sections, here we will discuss a little bit about the Bill of Material (BOM).

Fig 16 Material Requirement Planning

1. Bill of Material The bill of material describes the material content of a product at each stocking level in the manufacturing process. The item being produced is called a parent, and the materials required to produce the item are components.

BOM 123 for Item ABC

Material / Components

Qty Unit Per Series

Resin 10 Lbs. 1 Calcium 1 Lbs. 1 Box 1 Piece 1 Label 1 Piece 1

The BOM explosion is the process by which the definitive quantity of material needed for each production order is calculated. The BOM explosion uses the BOM document with the production order quantity to calculate the total number of Material needed.

Using our example for the ABC Item, we assume that the production order of ABC is 10,000 bags meaning 100 boxes of 100 bags each. The explosion will display the following results:

Calculation of the Required Material for Item ABC in Prod 123

Material / Components

Qty Unit Per Series Number of series

Required Qty

Resin 10 Lbs. 1 100 1000 Calcium 1 Lbs. 1 100 100 Box 1 Piece 1 100 100 Label 1 Piece 1 100 100

The quantity of these materials is not the final quantity of materials required because we have to take into account the scraps’ factor.

2. Scrap Factor Scraps are by-products of the manufacturing activities. During manufacturing activities, scraps are generated. Thus, if we need more than 1000 lbs. of Resin to produce 10,000 bags. Let’s assume that the scrap factor is 10 %, this ratio means that for each 100 lbs. we generate 10 lbs. of scrap.

Hence, if we want to produce 10,000 bags, we would need 1,111 lbs. of the raw resin.

3. Material Requirement Calculation Process Fig 17 describes the process flow that leads to the calculation of the MRP. In summary, when the MPS is published, the Gross MRP is generated for each period. This Gross MRP is then reduced by the quantity of finished goods available in the inventory. This reduced quantity is called Net MRP (Fig 18). The net requirement is the firm quantity of material needed to fulfil the actual demand. Often, the material required to fulfil one production order is not available in the raw material’s warehouse. In that case, the material stock out list needs to be updated by the quantity of material needed to be purchased.

Formulas 𝑁𝑁𝑅𝑅𝑄𝑄 𝑀𝑀𝑅𝑅𝑀𝑀 = 𝐺𝐺𝑅𝑅𝑠𝑠𝑅𝑅𝑅𝑅 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑒𝑒𝑅𝑅𝑂𝑂𝑄𝑄 − 𝐴𝐴𝑅𝑅𝑎𝑎𝑅𝑅𝐴𝐴𝑎𝑎𝐴𝐴𝐴𝐴𝑅𝑅 𝐹𝐹𝐺𝐺 𝑅𝑅𝑂𝑂𝑅𝑅𝑅𝑅𝑂𝑂𝑄𝑄𝑠𝑠𝑅𝑅𝑄𝑄 ∗

𝑀𝑀𝑎𝑎𝑄𝑄𝑅𝑅𝑅𝑅𝑅𝑅𝑎𝑎𝐴𝐴 𝑁𝑁𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 = 𝐴𝐴𝑅𝑅𝑎𝑎𝑅𝑅𝐴𝐴𝑎𝑎𝐴𝐴𝐴𝐴𝑅𝑅 𝑅𝑅𝑂𝑂𝑅𝑅𝑅𝑅𝑂𝑂𝑄𝑄𝑠𝑠𝑅𝑅𝑄𝑄 − 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑄𝑄𝑄𝑄𝑄𝑄

Note: The available FG inventory here is the total quantity of finished good available in inventory.

Fig 17 Material Requirement Planning

Fig 18 Net Material requirement calculation

F. Capacity Requirement Planning The capacity required is the amount (volume) of resource required in order to fulfil a Net MRP over a certain period of time.

The resources are the machines, the operators and the tools that are needed to manufacture a finished good. The notion of capacity is closely related to the term load. A load is the amount of work assigned to a resource (or group of resource). The unit of measure of the load is most of times associated with the notion of time. For example “lbs. / hr.” “Man/day” etc… In the manufacturing environment, the resource thus the capacity are most the time limited.

Hence, a good material requirement planning needs to be associated with good capacity planning. Capacity planning (Fig 19) is the process of determining the resources required to meet the priority plan and the methods needed to make that capacity available.

Production planning, master production scheduling, and material requirements planning determine priorities: what is wanted and when. These priority plans cannot be implemented,

unless the firm has sufficient capacity to fulfill the demand. Capacity planning, thus, links the various production priority schedules to manufacturing resources.

Fig 19 factor that determine the Capacity requirement planning

G. Production Activity Control and Purchasing Purchasing and Production Activity control (PAC) represent the implementation and control phases of the production planning and control system. Purchasing is responsible for establishing and controlling the flow of raw materials into the factory. PAC is responsible for planning and controlling the flow of work through the factory.

The planning horizon is very short, perhaps from a day to a month. The level of detail is high since it is concerned with individual components, workstations, and orders. Plans are reviewed and revised daily.

If you refer back to fig. 9 on page 18, you can observe the following:

1- When there is not enough material to be picked for manufacturing, the required material is ultimately purchased from outside supplier.

2- In case there is enough material the planner schedules the production sequences.

H. Conclusion In this section, we reviewed the manufacturing planning and control system. This section was a high level view of the whole system. The manufacturing planning and control system comprise several processes including the Master Production Planning, the Material Requirement Planning, the Capacity planning and more.

The part IV of this document will discuss the solution design of the project.

We will show how we have implemented the inventory replenishment process, the production scheduling using priorities and more.

Reference

Eastman, Blown Film line, retrieve from http://www.eastman.com/Markets/medical_technical_center/ Processing/Extrusion/Pages/BF_Process.aspx on 06/25/2014

IJ. R. Tony Arnold and Al. (2008), Introduction to Materials Management, Pearson Prentice Hall Jerry Clement and al. (1992), manufacturing data structures, Oliver Wight