Unit 3

Scheduling Operations
Chapter 13: Scheduling

Lesson 43- OPTIMIZED PRODUCTION TECHNOLOGY And Synchronous

Manufacturing
Learning Objectives
After reading this lesson you will be able to understand
Optimized production technology
Software for OPT
Computerized workforce scheduling systems
Synchronous manufacturing

Dear students, this third lecture focuses solely on OPT, the related software and
other such practical issues.

OPTIMIZED PRODUCTION TECHNOLOGY

There is another approach to the planning and scheduling so far presented is Optimized
Production Technology. This is a computer based system for planning production,
material needs, and recourse utilization. It was first introduced in the USA in 1979 by
Creative Output Inc, a Consulting Form in Milferd, Connecticut.

The key feature of OPT is its emphasis on bottleneck center works- people or machines..
The OPT philosophy is that managing bottlenecks is the key to successful performance:
total system output can be maximized and the in-process inventories reduced.

The OPT software consists of four modules.

1. BUILDNET
 2. SERVE
3. SPLIT
4. OPT
The above mentioned modules creates a model of the shop according to the data provided
by the user, how each product is made, its build up sequence, materials, and routing
through the shop), the products time requirements ( setup, run time, schedule delay ), the
capacity availability at each resource ( work center, machine , worker), and the order
quantities.
The initial purpose of SERVE is to create a tentative schedule for the jobs waiting in the
shop. Later it creates a more refined schedule. The crucial information obtained in the
SERVE is an estimate of the percentage utilization of the various shop resources.

The SPLIT module distinguishes critical from non critical resources based on their
percent utilizations calculated by SERVE. Resources that are near or above 100 percent
utilization are the bottleneck operations. These bottlenecks, and the operations that follow
them, are the "critical" operations; all others (those with lower percentage utilizations) are
"non critical."
The OPT module reschedules the critical part of the network using forward
scheduling. Then the program cycles back to SERVE to reschedule the non critical
resources.
The OPT package consists not only of software but of consulting services and
training for implementation as well. The specific details of the procedure, especially of
SERVE and OPT (the detailed scheduling modules), are proprietary (not published and
available to the general public). Consequently, detailed comparative evaluations of its
performance with that of other systems are not available.
The Behavioral elements in intermittent systems are of immense significance. You can’t simply
ignore it.
Please pay attention.

Behavioral elements in intermittent systems

The next few narrations are about the various behavior aspects of intermittent systems
which relate to the sheer technical complexities of having many, perhaps thousands, of
jobs flowing through many, perhaps hundreds, of work centers. Not only must all these
jobs be processed, but customer deliveries must be on time, and the entire operation must
be smooth and efficient.
A single human being is incapable of accomplishing all this. Our limited mental
capacities prohibit total awareness of current job status and how that status changes over
time. For these reasons, the tools presented in this chapter have great value to managers
of intermittent systems. Gantt load charts and scheduling charts, although simplistic in
concept and appearance, serve as memory supplements. For decision making, priority
sequencing rules playa similar role. By systematically applying priority rules, we get the
simplified process we need.
Although the rules do not ensure optimal system performance, they do help achieve
satisfactory performance, and they are usually better than alternative approaches,
including human intuition.
As a logical extension of the above concept, we now take up for consideration:-

SYSTEM ORGANIZATION AND ROLE RELATIONSHIPS

Another behavioral factor is the intra relationships of intermittent system employees,
groups, and work centers or departments. All must be integrated in an effective system.
Behavioral consideration specific to intermittent systems include those related to
individual and group characteristics.

Individual Characteristics You may remember that intermittent systems, compared with
continuous flow systems, comprise a variety of tasks. Different types of employee skills
are necessary. Generally, jobs in intermittent systems are already "enlarged": tasks vary,
and a higher degree of employee responsibility is emphasized in executing the tasks. In
hiring, managers seek employees who are highly skilled and who can work independently
without a great deal of supervision. Through monetary rewards, facilitating group
relationships, and allocating work methodically, management can create a working
environment that helps employees feel secure and fulfills their social needs. Doing so
increases motivation in job performance.
Group Characteristics In discussing facility layout, we pointed out that intermittent
systems comprise work centers sharing common processes. A facility might have several
work centers, each using workers skilled in machining, painting, and photography, for
example. Group affiliatioJ1s are often established among commonly skilled workers,
machinists, for example. There are three reasons for these group affiliations: command
structure, physical proximity, and shared craft interest. As a formal basis for group
affiliation among machinists, for example, the organizational structure may specify that
all machinists report to a machining foreman. Second, the physical proximity of
machinists in the facility, since they usually work near one another, tends to facilitate
interaction and communication, both work-related and personal. Since this is likely to
occur on a regular basis, strong group bonds may form. Finally, an important shared
interest-the craft or skill-is a basis for interaction. Unions facilitate this last affiliation; it
is likely that in a unionized facility of any size, more than one union will represent
differing groups of employees.
A work group significantly affects the operations of the system. Although a group
usually adopts a set of group norms and strives to satisfy member needs, the group norms
mayor may not be consistent with management goals. Group norms can strongly
influence its members' productivity, especially in highly cohesive groups. When the
norms of these cohesive groups are consistent with management goals, the groups tend to
produce at higher levels.

Centralized versus Decentralized Decision Making

A decentralized scheduling system provides an important dimension of managerial
discretion for the first-line supervisor: The supervisor decides which employees will work
on which job orders. This prerogative does not exist in more centralized systems. In an
environment in which wages are hourly and fixed, the decentralized system might be one
of the few devices directly available to the supervisor for rewarding and motivating
employees. In a more centralized system, job assignments are often depersonalized,
handed out by the production control center_ Gains in interdepartmental coordination can
be offset by losses in employee satisfaction and/or productivity.
 In many companies, bargaining between subordinates and foremen for job
assignments is a traditionally accepted interpersonal process. Without it, the prestige of
the supervisor and the experienced worker may both diminish. Unless other adjustments
are made, the diminution can lead to frustration and defensive behavior on the part of
supervisor and the subordinates alike, followed by decreased productivity and quality.
Friends, have a little patience.
We are nearing the end of our current discussion.
Before that, a couple of topics must be considered-----

SCHEDULING IN SERVICES

So far we have seen the scheduling systems in manufacturing. Now let us see how the
scheduling system works in service area.

The manufacturing scheduling process is a key element of an integrated supply chain.

APS systems attempt to link to the scheduling process demand data and forecasts, supply-
chain facility and inventory decisions, and the capability of suppliers so that the entire
supply chain can operate as efficiently as possible. The ability to change schedules
quickly while recognizing the implications on the rest of the supply chain can provide a
competitive edge.

One important distinction between manufacturing and services that affects scheduling is
that service operations cannot create inventories to buffer demand uncertainties. A second
distinction is- that in service operations demand often is less predictable. Customers may
decide on the spur of the moment that they need a hamburger, a haircut, or a plumbing
repair. Thus capacity, often in the form of employees, is crucial for service providers. In
this section, we discuss various ways in which scheduling systems can facilitate the
capacity management of service providers.

SCHEDULING CUSTOMER DEMAND

One way to manage capacity is to schedule customers for arrival times and definite
periods of service time. With this approach, capacity remains fixed and demand is leveled
to provide timely service and utilize capacity. Three methods are commonly used:
appointments, reservations, and backlogs. .

APPOINTMENTS. An appointment system assigns specific times for service to

customers. The advantages of this method are timely customer service and high
utilization of servers. Doctors, dentists, lawyers, and automobile repair shops are
examples of service providers that use appointment systems. Doctors can use the system
to schedule parts of their day to visit hospital patients, and lawyers can set aside time to
prepare cases. If timely service is to be provided, however, care must be taken to tailor
the length of appointments to individual customer needs rather than merely scheduling
customers at equal time intervals. .

RESERVATIONS. Reservation systems, although quite similar to appointment systems,

are used when the customer actually occupies or uses facilities associated with the
service. For example, customers reserve hotel rooms, automobiles, airline seats, and
concert seats. The major advantage of reservation systems is the lead time they give
service managers to plan the efficient use of facilities. Often, reservations require some
form of down payment to reduce the problem of no-shows.

BACKLOGS. A less precise way to schedule customers is to allow backlogs to develop;

that is, customers never know exactly when service will commence. They present their
service request to an order taker, who adds it to the waiting line of orders already in the
system. TV repair shops, restaurants, banks, grocery stores, and barber shops are
examples of the many types of businesses that use this system. Various priority rules can
be used to determine which order to process next. The usual rule is first come, first
served, but if the order involves rework on a previous order, it may get a higher priority.
Finally, we must tackle the issue of:-

SCHEDULING THE WORKFORCE

This is a important area where the workforce is involved in giving services and therefore,
managing the scheduling system like their on & off periods etc over a period of time for
the workforce becomes important. Similarly assigning postal clerks, nurses, pilots,
attendants, or police officers to specific workdays and shifts. This approach is used when
customers demand quick response and total demand can be forecasted with reasonable
accuracy. In these instances, capacity is adjusted to meet the expected loads on the
service system.
Recall that workforce schedules translate the staffing plan into specific schedules of
work for each employee (see the Aggregate Planning chapter). Determining the workdays
for each employee in itself does not make the staffing plan operational. Daily workforce
requirements, stated in aggregate terms in the staffing plan, must be satisfied. The
workforce capacity available each day must meet or exceed daily workforce
requirements. If it does not, the scheduler must try to rearrange days off until the
requirements are met. If no such schedule can be found, management might have to
change the staffing plan and authorize more employees, overtime hours, or larger
backlogs.

CONSTRAINTS. The technical constraints imposed on the workforce schedule are the
resources provided by the staffing plan and the requirements placed on the operating
system. However, other constraints, including legal and behavioral considerations, also
can be imposed. For example, Air New Zealand is required to have at least a minimum
number of flight attendants on duty at all times. Similarly, a minimum number of fire and
safety personnel must be on duty at a fire station at all times. Such constraints limit
management’s flexibility in developing workforce schedules.
The constraints imposed by the psychological needs of workers complicate scheduling
even more. Some of these constraints are written into labor agreements. For example, an
employer may agree to give employees a certain. number of consecutive days off per
week or to limit employees' consecutive workdays to a certain maximum. Other
provisions might govern the allocation of vacation, days off for holidays, or rotating shift
assignments. In addition, preferences of the employees themselves need to be considered.
One way that managers deal with certain undesirable aspects of scheduling is to use a
rotating schedule, which rotates employees through a series of workdays or hours. Thus,
over a period of time, each person has the same opportunity to have weekends and
holidays off and to work days, as well as evenings and nights. A rotating schedule gives
each employee the next employee's schedule the following week. In contrast, a fixed
schedule calls for each employee to work the same days and hours each week.
Students, this can not be effectively accomplished without:-

DEVELOPING A WORKFORCE SCHEDULE. Suppose that we are interested in developing

an employee schedule for a company that operates seven days a week arid provides each
employee two consecutive days off. In this section, we demonstrate a method that rec-
ognizes this constraint.1 The objective is to identify the two consecutive days off for each
employee that will minimize the amount of total slack capacity. The work schedule for
each employee, then, is the five days that remain after the two days off have been
determined. The procedure involves the following steps.

Step 1. From the schedule of net requirements for the week, find all the pairs of con-
secutive days that exclude the maximum daily requirements. Select the unique pair that
has the lowest total requirements for the two days. In some unusual situations, all
pairs may contain a day with the maximum requirements. If so, select the pair with the
lowest total requirements. Suppose that the numbers of employees required are

Monday: 8 Friday: 7
Tuesday: 9 Saturday: 4
Wednesday
2 Sunday: 2
:
Thursday: 12

The maximum capacity requirement is 12 employees, on Thursday. The pair having the
lowest total requirements is Saturday-Sunday, with 4 + 2 = 6.

Step 2. If a tie occurs, choose one of the tied pairs, consistent with provisions written into
the labor agreement, if any. Alternatively, the tie could be broken by asking the employee
being scheduled to make the choice. As a last resort, the tie could be broken arbitrarily.
For example, preference could be given to Saturday-Sunday pairs.

Step 3. Assign the employee the selected pair of days off. Subtract the requirements
satisfied by the employee from the net requirements for each day the employee is to
work. In this case, the employee is assigned Saturday and Sunday off. After requirements
are subtracted, Monday's requirement is 7, Tuesday's is 8, Wednesday's is 1, Thursday's
is 11, and Friday's is 6. Saturday's and Sunday's requirements do not change because no
employee is yet scheduled to work those days.

Step 4. Repeat steps 1-3 until all requirements have been satisfied or a certain number of
employees have been scheduled.

This method reduces the amount of slack capacity assigned to days having low
requirements and forces the days having high requirements to be scheduled first. It also
recognizes some of the behavioral and contractual aspects of workforce scheduling in the
tie-breaking rules. However, the schedules produced might not minimize total slack
capacity. Different rules for finding the days-off pair and breaking ties are needed to
ensure minimal total slack capacity.

Now let us try to understand the above concepts by an example

Developing Workforce Schedule

The Amalgamated Parcel Service is open seven days a week. The schedule of
requirements is
Day M T W Th F S Su
No of Employees 6 4 8 9 10* 3 2

The manager needs a workforce schedule that provides two consecutive days off and
minimizes the amount of total slack capacity. To break ties in the selection of off days,
the scheduler gives preference to Saturday-Sunday if it is one of the tied pairs. If not, she
selects one of the tied pairs arbitrarily.
Well my dears, the same rules apply.
Solve first.
Tally later.

SOLUTION

Friday contains the maximum requirements (designated by an *), and the pair S-Su has
the lowest total requirements. Therefore, employee 1 is scheduled to work Monday-
Friday. The revised set of requirements, after scheduling employee 1, is

Day M T W Th F S Su
Number of employees 5 3 7 8 9* 3 2
 TABLE 13.2 Scheduling Days Off
EMPLOY
M T W Th F S Su COMMENTS
EE
4 2 6 7 8* 3 2 3 S-Su has the lowest total requirements. Reduce the
requirements to reflect a M-F schedule for employee 3.
3 1 5 6 7* 3 2 4 M- T has the lowest total requirements. Assign
employee 4 to a W-Su schedule and update the
requirements.
3 1 4 5 6* 2 1 5 S-Su has the lowest total requirements. Assign
employee 5 to a M-F schedule and update the
requirements.
2 0 3 4 S* 2 1 6 M-T has the lowest total requirements. Assign
employee 6 to a W-Su schedule and update the
requirements.
2 0 2 3 4* 1 0 7 S-Su has the lowest total requirements. Assign
employee 7 to a M-F schedule and update the
requirements.

1 0 1 2 3* 1 0 8 Three pairs have the minimum requirement and the

lowest total: S-Su, M-T, and T-W. Choose S-Su
according to the tie-breaking rule. Assign employee 8 a
M-F schedule and update the requirements.

0 0 0 1 2* 1 0 9 Arbitrarily choose Su-M to break ties because S-Su

does not have the lowest total requirements. Assign
employee 9 to a T-S schedule.

0 0 0 0 1* 0 0 10 Choose S-Su according to the tie-breaking rule. Assign

employee 10 a M-F schedule.
Note that Friday still has the maximum requirements and that the requirements for S-Su
are carried forward because these are employee l's days off. These updated requirements
are the ones the scheduler use, tcr the next employee.
The unique minimum again is on S-Su, so the scheduler assigns employee 2 to a M-F
schedule. She then reduces the requirements for M-F to reflect the assignment of
employee 2.
The day-off assignments for the remaining employees are shown in Table 13.3. In this
example Friday has always has the maximum requirements and should be avoided as a
day off. The schedule for the employees is shown in Table 13.3.

TABLE 13.3 Final Schedule

Employee M T W Th F S Su TOTAL
1 X X X X X off off
2 X X X X X off off
3 X X X X X off off
4 off off X X X X X
5 X X X X X off off
6 off off X X X X X
7 X X X X X off off
8 X X X X X off off

9 off X X X X X off

10 X X X X X off off
Capacity, C 7 7 10 10 10 3 2 50
Requirement
6 4 8 9 10 3 2 42
s, R
Slack C - R 1 3 2 1 0 0 1 8

Decision Point With its substantial amount of slack capacity, the schedule is not unique.
Employee 9, for example, could have Su-M, M-T, or T-W off without causing a capacity
shortage. Indeed, the company might be able to get by with one fewer employee because
of the total of eight slack days of capacity. However, all 10 employees are needed on
Fridays. If the manager were willing to get by with only 9 employees on Fridays or if
someone could work one day of overtime on a rotating basis, he would not need
employee 10. As indicated in the table, the net requirement left for employee 10 to satisfy
amounts to only one day, Friday. Thus, employee 10 can be used to fill in for vacationing
or sick employees.

Can anybody out there tell me something about the:-

COMPUTERIZED WORKFORCE SCHEDULING SYSTEMS
Workforce scheduling often has many constraints and concerns. In some types of firms,
such as telephone companies, mail-order catalog houses, or emergency hotline agencies,
employees must be on duty 24 hours a day, seven days a week. Sometimes a portion of
the staff is part-time, allowing management a great deal of flexibility in developing
schedules but adding considerable complexity to the requirements. The flexibility comes
from the opportunity to match anticipated loads closely by using overlapping shifts or
odd shift lengths; the complexity comes from having to evaluate the numerous possible
alternatives. Management also must consider the timing of lunch breaks and rest periods,
the number and starting times of shift schedules, and the days off for each employee. An
additional typical concern is that the number of employees on duty at any particular time
be sufficient to answer calls within a reasonable amount of time.
Computerized scheduling systems are available to cope with the complexity of
workforce scheduling. For example, L. L. Bean's telephone service center must be staffed
with telephone operators 7 days a week, 24 hours a day. The company uses 350
permanent and temporary employees. The permanent workers are guaranteed a minimum
weekly workload apportioned over a 7 week on a rotating schedule. The temporary staff
works a variety of schedules ranging from a full six days week to a guaranteed weekly
minimum of 20 hours. The company uses a computer program to forecast the hourly load
for the telephone work center, translate the work load into capacity requirements, and
then generate week long staffing schedules for the permanent and temporary telephone
operators to meet these demand requirements. The program selects the schedule that
minimizes the sum of expected costs of over and understaffing.

SYNCHRONOUS MANUFACTURING

Optimized Production Technology (OPT) was evolved through software. This software
was developed by Creative Output Inc USA and the person responsible for it is Dr. Eli
Goldratt. Here the scheduling logic is based on the separation of “bottleneck” and non-
bottleneck operations.

Further Dr Goldratt developed the “Theory of Constraints” (TOC), which has become
popular as a problem solving approach that can be applied to many business areas. So
let’s go through TOC briefly;
1. Identify the system constraints (No improvement is possible unless the weak link
or constraint is found out)
2. Decide how to exploit the system constraints (Make the constraints as effective
as possible)
3. Subordinate everything to that decision (align every other part of the system to
support the constraints even if this reduces the efficiency of non constraint
resources).
4. Elevate the system constraints (If output is still inadequate acquire more of this
resource so that it is no longer a constraint)
5. If, in the previous steps, the constraint is broken back, go back to step 1, but do
not let inertia become the system constraint (After the constraint problem is
solved, go back to the beginning and start all over again. This is a continuous
process of improvements

Therefore by removing the constraints and moving forward we get into a situation where
the entire operations or production process work in harmony to achieve the ultimate goal
of an organization i.e. Profit. From the point of view of operation or production
management in order to achieve profit, the goal would be

Increase throughput while simultaneously reducing inventory and reducing operating

expenses.

UNBALANCED CAPACITY

Historically (and still typically in most firms) manufacturers have tried to balance
capacity across a sequence of processes in an attempt to match capacity with market
demand. However, this is the wrong thing to do-unbalanced capacity is better.
Consider a simple process line with several stations, for example. Once the output rate of
the line has been established, production people try to make the capacities of all stations
the same. This is done by adjusting machines or equipment used, workloads, skill and
type of labor assigned, tools used, overtime budgeting and so on.
 In synchronous manufacturing thinking, however, making all the capacities is viewed
as a bad decision. Such a balance would be possible only if the output time of stations
were constant or had a very narrow distribution. A normal variation in output causes
downstream stations to have idle time when upstream stations take longer to process.
Conversely, when upstream stations process in a shorter time, inventor builds up between
the stations. The effect of the statistical variation is cumulative. The only way that these
stations can be smoothed is by increasing work-in-process to absorb the variation (a bad
idea because we should be trying to reduce work-in-process) or increasing capacities.
Stream to be able to make up for the longer upstream times. The rule here is that capacity
within the process sequence should not be balanced to the same levels. Rather, attempt
should be made to balance the flow of product through the system. When flow is balance
capacities are unbalanced.

What are the limiting factors that prevail?

Could you tell me any?
Well,

BOTTLENECKS AND CAPACITY-CONSTRAINED RESOURCES

We have earlier said about constraints and bottlenecks, now let us see its definition and
further understanding of the topic.

A bottleneck is defined as any resource whose capacity is less than the demand placed
upon it. A bottleneck is a constraint within the system that limits throughput. It is that
point in the manufacturing process where flow thins to a narrow stream. A bottleneck
may be a machine, scarce or highly skilled labor, or a specialized tool. Observations in
industry have shown that most plants have very few bottleneck operations.
If there is no bottleneck, then excess capacity exists and the system should be changed
to create bottleneck (such as more setups or reduced capacity), which we will discuss
later.

Capacity is defined as the available time for production. This excludes maintenance
and other downtime. A non bottleneck is any resource whose capacity is greater than the
demand placed on it. A non bottleneck, therefore, should not be working constantly
because it can produce more than is needed. A non bottleneck contains idle time.
A capacity-constrained resource (CCR) is one whose utilization is close to capacity
and could be a bottleneck if it is not scheduled carefully. For example, a CCR may be
receiving work in a job-shop environment from several sources. If these source:; schedule
their flow in a way that causes occasional idle time for the CCR in excess of its unused
capacity time, the CCR becomes a bottleneck when the surge of work arrives at a later
time. This can happen if batch sizes are changed or if one of the upstream operations is
not working for some reason and does not feed enough work to the CCR.

Friends, the question that comes to mind is how do we remove these constraints?
 Well, the answer is:-
We usually can not.
Therefore, we must have adequate

METHODS FOR CONTROL

The figure below shows how bottleneck and non bottleneck resources should be
managed.
Resource X and Resource Yare work centers that can produce a variety of products. Each
of these work centers has 200 hours available per month. For simplicity, assume that we
are, dealing with only one product and we will alter the conditions and makeup for four
different situations. Each unit of X takes one hour of production time and the market
demand is 200 units per month. Each unit of Y takes 45 minutes of production time and
the market demand is also 200 units per month.

The figure shows a bottleneck feeding a non bottleneck. Product flows from Work
Center X to Work Center Y. X is the bottleneck because it has a capacity of 200 units
(200 hours/l hour per unit) and Y has a capacity of 267 units (200 hours/45 minutes per
unit). Because Y has to wait for X and Y has a higher capacity than X, no extra product
accumulates in the system. It all flows through to the market.

B part in the figure is the reverse of A, with Y feeding X. This is a non bottleneck
feeding a bottleneck. Because Y has a capacity of 267 units and X has a capacity of only
200 units, we should produce only 200 units of Y (75 percent of capacity) or else work-in-
process will accumulate in front of X.

C part in the figure shows that the products produced by X and Y are assembled and
then sold to the market. Because one unit from X and one unit from Y form an assembly,
X is the bottleneck with 200 unit_ of capacity and, therefore, Y should not work more
than 75 percent or else extra parts will accumulate.

D part in the figure equal quantities of product from X and Y are demanded by the
market. In this case we can call these products "finished goods" because they face
independent demands. Here Y has access to material independent of X and, with a higher
capacity than needed to satisfy the market, it can produce more products than the market
will take. However, this could create an inventory of unneeded finished goods.

A X Y B Y X
Market Market

200 Units of 200 units of Y can be used 75% of time of work

in
product (200 product (150 process will build up
hours hours
 X used 200 / 200 = 100%
Y used 150 / 200 = 75%

Market D Market Market

C

FG
X Y
X Y (Spare parts)
Y can be used only 75% of the time X can be used only 75% of
the
or spare parts will accumulate time or Finished Goods
inventory will build up

The four situations just discussed demonstrate bottleneck and non bottleneck resources
and their relationships to production and market demand. They show that the industry
practice of using resource utilization as a measure of performance can encourage the
overuse of non bottlenecks and result in excess inventories.

Dear friends, now Let us look at the components of production cycle time

T I M E C OM P 0 N E N T S

The following kinds of time make up production cycle time:

1. Setup time- the time that a part spends waiting for a resource to be set up to work
on this same part.

2. Processing time- the time that the part is being processed.

3. Queue time –the time that a part waits for a resource while the resource is busy
with something else.

4. Wait time-the the time that part waits not for a resource but for another part so
that they can be assembled together.

5. Idle time-the unused time; that is, the cycle time_ less the sum of the setup time
processing time and the wait time.

For a part waiting to go through a bottleneck, queue time is the greatest. As we discuss
latter in this chapter, this is because the bottleneck has a fairly large amount of work to do
in front of it (to make sure that it is always working). For a non bottleneck, wait time is
the greatest. The part is just sitting there waiting for the arrival of other parts so that an
assembly can take place.
 Schedulers are tempted to save setup times. Suppose that the batch sizes are doubled to
save half the setup times. Then, with a double batch size, all of the other times
(processing time, queue time, and wait time) increase twofold. Because these times are
doubled while saving only half of the setup time, the net -result is that the work-in-
process is approximately doubled, as is the investment in inventory.

Can you tell me how do we go about FINDING THE BOTTLENECK

FINDING THE BOTTLENECK

There are two ways to find the bottleneck (or bottlenecks) in a system. One is to run a
capacity resource profile; the other is to use our knowledge of the particular plant, look at
the system in operation, and-talk with supervisors and workers.

A capacity resource profile is obtained by looking at the loads placed on each resource
by the products that are scheduled through them. In running a capacity profile, we assume
that the data are reasonably accurate, although not necessarily perfect. As an example,
consider that products have been routed through Resources Ml through M5. Suppose that
our first computation of the resource loads on each resource caused by these products
shows the following:

Ml 130 percent of capacity

M2 120 percent of capacity
M3 105 percent of capacity
M4 95 percent of capacity
M5 85 percent of capacity

For this first analysis, we can disregard any resources at lower percentages because
they are non bottlenecks and should not be a problem. With this list in hand, we should
physically go to the facility and check all five operations. Note that MI, M2, 'and M3 are
overloaded; that is, they are scheduled above their capacities.

We would expect to see large quantities of inventory in front of M I. If this is not the
case, errors must exist somewhere-perhaps in the bill of materials or in the routing sheets.
Let's say that our observations and discussions with shop personnel showed that there
were errors in M1, M2, M3, and M4. We tracked them down, made the appropriate
corrections, and made the capacity profile again:

M2 115 percent of capacity

M1 110 percent of capacity
M3 105 percent of capacity
M4 90 percent of capacity
M5 85 percent of capacity

M1, M2 and M3 are still showing a lack of sufficient capacity, but M2 is the most
serious. If we now have confidence in our numbers, we use Iv'l2 as our bottleneck. If the
data contain too many errors for a reliable data analysis, it may not be worth spending
time (it could take months) nuking all the corrections.

SAVING TIME
Recall that a bottleneck is a resource whose capacity is less than the demand placed on it.
Because we focus on bottlenecks as restricting throughput (defined as sales), a
bottleneck's capacity is less than the market demand. There are a number of ways we can
save time on a bottleneck (better tooling, higher-quality labor, larger batch sizes,
reducing setup times, and so forth), but:-

Just how valuable is the extra time?

Very, very valuable!

AN HOUR SAVED AT THE BOTTLENECK ADDS AN EXTRA HOUR TO THE

ENTIRE PRODUCTION SYSTEM.

How about time saved on a non bottleneck resource?

AN HOUR SAVED AT /\ NONBOTTLENECK IS A MIRAGE AND ONLY ADDS AN

HOUR TO ITS IDLE TIME.

Because a non bottleneck has more capacity than the system needs for its current
throughput, it already contains idle time. Implementing any measures to save more time
does not increase throughput but only serves to increase its idle time.

Finally, my dear students, we inch towards the end of today’s lecture. But before
we formally close our shops for the day, let’s focus on:-

COMPARISON of SYNCHRONOUS MANUFACTURING with MRP and JIT:

(i) MRP uses backward scheduling after having been fed a master production schedule.
MRP schedules production through a bill of materials explosion in a backward manner-
working backward in time from the desired completion date. As a secondary procedure;
MRP, through its capacity resource planning module, develops capacity utilization
profiles of work centers. When work centers are overloaded, either the master production
schedule must be adjusted or enough slack capacity must be left unscheduled in the
system so that work can be smoothed at the local level (by work center supervisors or the
work themselves). Trying to smooth capacity using MRP is so difficult and would require
many computer runs that capacity overloads and under loads are best left to local decision
such as at the machine centers. An MRP schedule becomes invalid just days after it was
created.
The synchronous manufacturing approach uses forward scheduling because it focuses
on the critical resources. These are scheduled forward in time, ensuring that loads placed
on them are within capacity.
The no critical (or non bottleneck) resources are then scheduled to support the critical
resources. (This can be done backward to minimize the length-of time that inventories are
held.) This procedure ensures a feasible schedule. To reduce lead time and work-in-
process, in synchronous manufacturing the process batch size and transfer batch size are
varied-a procedure that MRP is not able to do.

Comparing JlT to synchronous manufacturing, JlT does an excellent job in reducing

lead times and work-in-process, but it has several drawbacks:

1) JIT is limited to repetitive manufacturing.

2) JIT requires a stable production level (usually about a month long).

3) JIT does not allow very much flexibility in the products produced. (Products must be
similar with a limited number of options.)

4) JIT still requires work-in-process when used with kanban so that there is "some
demand to pull." This means that completed work must be stored on the downstream side
each workstation to be pulled by the next, workstation.

5) Vendors need to be located nearby because the system depends on smaller, more
frequent deliveries.

Because synchronous manufacturing uses a schedule to assign work to each work

station, there is no need for more work-in-process other than that being worked on. The
exception is for inventory specifically placed in front of a bottleneck to ensure continuous
work, or at specific points downstream from a bottleneck to ensure flow of product

Concerning continual improvements to the system, JIT is a trial-and-error procedure

applied to a real system. In synchronous manufacturing, the system, can be program and
simulated on a computer because the schedules are realistic (can be accomplished)
computer run time is short.

With that, we have come to the end of today’s discussions. I hope it has been an
enriching and satisfying experience.