A modified hierarchical production planning system integrated with MRP: A case study

In this paper, a hierarchical planning system is proposed which integrates aggregate capacity planning with MRP. This system is to be implemented in a metal box manufacturing company which multi-user MRP system covering manufacturing activities as well as procurement sales order processing and accounting systems. The hierarchical planning system includes a medium-range aggregate planning model adapted to the firm's requirements and strategies. The model consists of a mathematical formulation which covers labour capacity has already installed a constraints and includes certain cost estimations in the objective function. The planning horizon of the medium range planning is taken as twelve months in order to cover sales seasonality. The aggregate production quantities resulting from the optimized medium-range planning model are disaggregated according to procedures already found in the literature. Furthermore, the theoretical infeasibilities pertaining to the disaggregation procedures are also resolved in an heuristic manner. Using the latter modified disaggregation procedure, a feasible disaggregated plan is generated for the whole planning horizon. The proposed plan is compared with the current production policy of the firm and it is observed that the proposed plan leads to backorder reduction.     

Reengineering of a supply chain management system: A case study

A business process reengineering (BPR) project concerning a supply chain management (SCM) system of a heavy machinery manufacturing company has been discussed in this paper. The BPR implementation process model has been described. The principal objective of this project has been to bring about radical changes in the mind sets, management styles and systems of a very mature but large organization in India. The implementation process has been very successful because the model has been explored by an organizational development initiative. BPR is both feasible and worthwhile in business only when ideas and ideals are put willingly in practice; and is practised in a collaborative mode to get closer to the people, especially at the floor level, and to customers and suppliers.     

Integrated enterprise modelling: A method for the management of change

'The capability to adjust to new conditions quickly has developed into a decisive competitive advantage. You cannot waste any time if you want to be successful.' (Emeritus Professor Dr h. c. mult. Changing conditions in the market place issue new challenges to small- and medium-sized enterprises. Organization and qualification of employees have to be adjusted to the modified situation. If the only steady factor is change, the management of change is going to be the outstanding role of the leader. The successful structuring of change processes requires powerful methods and tools: to make business processes transparent and lean; to find a common 'corporate language' based upon customers benefits and shareholders value; Dr-Ing. G. Spur) to bring together process know-how in a central information base. This contribution summarizes the experiences from several projects. We will show how the synchronization of necessary reengineering measures makes corporate knowledge active, e.g. to improve the shareholders value, reduce investment costs, and shorten the duration of projects. As successful examples two medium-sized companies are described.     

A review on Ecological Engineering based Engineering Management

Engineering achievements have improved the quality of human life, provided creature comforts, and expanded the human domain to unprecedented levels. When enjoying all these achievements, human beings are coming to realize that the more invasion of the nature, the more environmental problems. Under the context of sustainable development, it is certain that effective Engineering Management calls for an ecological concept. The basic claim of this paper is that Engineering Management should be based on Ecological Engineering, which is an essential requirement of effective Engineering Management. At the same time, Ecological Engineering shall serve as the base of Engineering Management, which is commanded by the characteristics of Ecological Engineering. To date, there are only scattered studies focused on Engineering Management using the ecological concept. Moreover, there is no systematic concept of Ecological Engineering based Engineering Management (EMEE). In this paper, a thorough review of EMEE is presented. Our goals are to clarify this concept, promote this promising thought, summarize past research, and identify issues for future research to create impacts on the practice of Engineering Management.     

A NOTE ON DYNAMIC LOT SIZING IN A ROLLING-HORIZON ENVIRONMENT

This paper presents a modification of the dynamic lot-size algorithm of Wagner and Whitin for rolling horizon environments. The computational results show that the modified algorithm gives better cost performance than the Wagner-Whitin algorithm and the Silver-Meal heuristic. The improvements over the Wagner-Whitin algorithm require very few additional computations.     

THE PERFORMANCE OF A SIMPLE INCREMENTAL LOT-SIZING RULE IN A MULTILEVEL INVENTORY ENVIRONMENT

A simple incremental cost approach to lot sizing was tested in a multilevel inventory environment. The incremental approach has not previously been tested in a large-scale study involving multiple product-structure levels. Using the Wagner-Whitin (WW) algorithm as a benchmark, the simple incremental rule (IPPA) was compared to three heuristic procedures (LFL, EOQ, and POQ) frequently used in material requirements planning (MRP) lot-sizing research. The incremental rule consistently generated lower total order/setup and carrying costs than the three heuristics across the 3,200 multilevel test situations examined. In many of the test situations, the incremental rule also outperformed the WW benchmark.     

The impact of JIT on capacity management: A case study and analysis

This article describes the production planning and control techniques used at Verbatim Computer Disk Company in Charlotte, NC. The factory operates by management policy on a 24 hours-per-day, 7 days-per-week, 363 days-peryear, basis as if it were a process industry. Production of discrete units, computer disks, follows repetitive manufacturing methods including the implementation of just-in-time JIT methods into an existing material requirements planning MRP system. Production is based on the actual customer orders received from Marketing for disks from both US customers and international markets. Marketing uses price adjustments in coordination with Production Planning to ensure the factories operate at 100 capacity and within predefined inventory levels. This article discusses the relationship between Marketing and Manufacturing which allows for the attainment of a process industry-like economies of scale for a line of discrete products. Key characteristics of the production planning and control system are identified as are the current operating problems.     

COMMENTS ON “COST INCREASES DUE TO DEMAND UNCERTAINTY IN MRP LOT SIZING”: A VERIFICATION OF ORDERING PROBABILITIES

In a recent article in this journal, De Bodt and Van Wassenhove [1] presented analytic derivations related to lot-sizing behavior under uncertainty. Although their models appear to have been verified in the aggregate by simulation experiments, detailed justifications for several of the derivations are missing. The present paper looks at De Bodt and Van Wassenhove's analysis and provides verifications of (and corrections to) the ordering probabilities and order cycles used by the authors to estimate the cost effects of forecast errors in the particular operating environment studied. The probabilities simulated in this study also generate additional insight into the “system nervousness” caused by lot-sizing and forecast errors.     

A DISCRETE PRODUCTION SWITCHING RULE FOR AGGREGATE PLANNING

Aggregate planning (AP) is a necessary activity for manufacturing and services alike. A shift toward high-volume batch and continuous flow processes within American manufacturing has given rise to increasing numbers of crew-loaded facilities. A majority of AP approaches incorporate continuous decision variables and require frequent adjustments to both production and work-force settings. Despite the availability and diversity of these approaches, few significant applications have been reported. This paper presents the detailed development of a discrete AP switching rule that can be applied to a variety of cost environments. Inventory costs are estimated using an interval approach rather than traditional point estimates. The model allows incorporation of overtime options and is interactive in nature. Decision variables from the model can be disaggregated and linked directly to lower-level planning activities. Actual results of model implementation are reported. An overview of the model's incorporation into the larger context of hierarchical production planning is found in [21].     

Open Order Rescheduling in Job Shops with Demand Uncertainty: A Simulation Study

This paper addresses the problem of open order rescheduling in a job shop. Results are reported of experiments conducted in a simulation model of an 8-machine job shop. Four different order updating policies are examined. The due-date process is modeled to include several realistic features about the pattern of due-date variability. These features are parameterized and tested at several levels. Tardiness results indicate that open order rescheduling is beneficial only when allowances are loosely set. The results indicate that inventory performance is improved by order rescheduling, particularly in cases when due dates are revised to earlier times than originally forecast.     

国际工程造价管理体制的比较研究

工程造价管理体制改革—直是近两年来国家经济体制改革的一个重要组成部分。随着我国建筑市场体制改革的深入,对于这一课题的研究已经成为当务之急。本文运用比较管理研究的方法深入分析和对照了中国香港、英联邦国家、美国、日本和我国的工程造价管理体制,分别从工程造价总的管理体制、政府性工程项目管理体制和具体的工程造价管理方式方法阐述了各自的利弊和我们在工程造价管理体制改革中应该借鉴的地方。     

HEURISTIC LOT-SIZING PERFORMANCE IN A ROLLING-SCHEDULE ENVIRONMENT*

This paper examines the impact of a rolling-schedule implementation on the performance of three of the better known lot-sizing methods for single-level assembly systems——Part-Period-Cost-Balancing, Silver-Meal, and Wagner-Whitin algorithms—and a modified version of the Silver-Meal procedure. The main finding is that under certain conditions the computationally simpler Silver-Meal heuristic can provide cost performance superior to that of the Wagner-Whitin algorithm.     

A Model for Master Production Scheduling in Uncertain Environments

In uncertain environments, the master production schedule (MPS) is usually developed using a rolling schedule. When utilizing a rolling schedule, the MPS is replanned periodically and a portion of the MPS is frozen in each planning cycle. The cost performance of a rolling schedule depends on three decisions: the choice of the replanning interval (R), which determines how often the MPS should be replanned; the choice of the frozen interval (F), which determines how many periods the MPS should be frozen in each planning cycle; and the choice of the forecast window (T), which is the time interval over which the MPS is determined using newly updated forecast data. This paper uses an analytical approach to study the master production scheduling process in uncertain environments without capacity constraints, where the MPS is developed using a rolling schedule. It focuses on the choices of F, R, and T for the MPS. A conceptual framework that includes all important MPS time intervals is described. The effects of F, R, and T on system costs, which include the forecast error, MPS change, setup, and inventory holding costs, are also explored. Finally, a mathematical model for the MPS is presented. This model approximates the average system cost as a function of F, R, T, and several environmental factors. It can be used to estimate the associated system costs for any combination of F, R, and T.     

Technology roadmapping for technology-based product-service integration: A case study

Today, since a single product is no longer sufficient to cope with the dynamic market environment, firms are trying to provide the integrated offering of products and services. However, despite the importance and utility of product-service integration, a limited approach has been conducted regarding the planning of the strategic management of integrated offering. To deal with this issue, this paper firstly suggests the concept and typology of technological interface in product-service integration. Based on the technological interface, a generic structure of product-service integrated roadmap is developed. Extended from the generic structure, this paper finally proposes the typological configurations of integrated roadmap according to the technological interface and investigates the usage, characteristics, and roadmapping processes.     

A METHODOLOGY FOR LABOR SCHEDULING IN A SERVICE OPERATING SYSTEM

In the increasingly competitive services sector, utilization of the labor force can make the difference between profits or losses. Until recently, service operations managers had a limited set of tools, most of them computer-based, for scheduling labor. This paper offers a manual heuristic for labor scheduling that outperforms traditional algorithmic solution approaches. Specifically, this study examines the problem of scheduling employees in service delivery system subject to demand variability. The manual heuristic proposed asigns full-time empolyees to weekly work schedules with the objective of minimizing the total number of labor hours scheduled. The performance of the manual heuristic is compared to the classical algorithmic solution and to a lower bound for a variety of demand distributions and system operating conditions. The heuristic is shown to produce a smaller work force than the classical approach in 106 of the 108 demand-operating condition patterns examined.     

A Comparative Analysis of Master Production Scheduling Techniques for Assemble-To-Order Products

This paper studies the master production scheduling (MPS) activity of manufacturing firms that produce assemble-to-order (ATO) products. It describes four techniques for master scheduling ATO products: end-product bills, modular bills, super bills, and percentage bills. These procedures are compared in terms of the percentage of customer orders delivered late, the mean tardiness of customer order deliveries, and the total cost of inventory using simulation analysis. The results indicate that the performance of an MPS technique is affected by the level of uncertainty of the end products' demands and the degree of component commonality in the product structure. In particular, modular bills produce the highest customer service level and super bills produce the lowest total inventory cost under most operating conditions. The conclusions also suggest that the choice of a particular MPS technique is often a compromise between the benefits of improved MPS performance and the costs of implementing and executing the MPS system.     

Notes and Communications REPLANNING FREQUENCIES FOR MASTER PRODUCTION SCHEDULES

Updating production plans typically is achieved by rolling the planning horizon forward one period at a time, each time including the latest information in order to determine the best course of action to pursue in the present period. Theoretical planning-horizon studies have identified the conditions by which the production decisions in the current and some specified number of future periods remain optimal given some set of future demands. Motivated by these findings, this study addresses the replanning frequency in a hierarchical production planning problem where no planning-horizon theorems are available. In this problem the aggregate production plan and the master production schedule are linked by a rolling-horizon practice. Empirical experimentation indicates that under certain cost and demand conditions the master production schedule need not be updated every period. If a schedule does not need to be updated for several periods, the schedule for these periods can be frozen to provide stability for planning components at lower levels in the bill of material of the products. The results of this study thus provide some reference for the determination of the frozen portion of the master production schedule.     

Concepts,Theory, and Techniques A JOINT LOT-SIZING RULE FOR FIXED LABOR-COST SITUATIONS

Many American firms are implementing just-in-time production in order to minimize inventories, reduce flow time, and maximize resource utilization. These firms recognize that, in the short run, setup costs really are fixed expenses and it is available capacity which is the critical factor in determining production-run quantities. We propose using available capacity to increase the number of setups and reduce lot-size inventories. This results in improved relevant cost performance. Sugimori, Kusunoki, Cho, and Uchikawa [16] in their paper on the Toyota kanban system developed a relationship for lead time but failed to use it for lot sizing. We use this relationship to develop the joint lot-sizing rule. The efficacy of our proposed rule is demonstrated by applying it to lot-size scheduling problems at the John Deere Engine Works [14]. Extensions of the proposed rule to undercapacity situations with material-wastage costs in the setup processes and to multistate production inventory systems also are discussed.     

Analysis and Approximation of a JIT Production Line: A Comment

A recent Decision Sciences article by Jordan [9] presented a Markov-chain model of a just-in-time (JIT) production line. This model was used to estimate average inventories and production rates to find the optimal number of kanbans. Results for expected production rate were found to be consistently lower than those obtained by Huang, Rees, and Taylor [8] in a previous Decision Sciences article. Jordan attributed this unexpected outcome to some procedural problems in Huang et al.'s simulation methodology. In this paper, Markov-numerical analysis is used to compare the performance of Jordan's and Huang et al.'s methods of production control. Simulation analysis is then used to determine the effects of finite withdrawal cycle times. Results show that, for equal numbers of kanbans, Huang et al.'s two-card method of production control provides substantially greater expected production rates than Jordan's method. These results suggest that the Jordan model should not be applied to the problem of setting kanban numbers on manual JIT lines. Finally, we comment on the efficiency of Jordan's iterative method to obtain performance measures of tandem queues.     

COST INCREASES DUE TO DEMAND UNCERTAINTY IN MRP LOT SIZING

This paper analyzes the cost increases due to demand uncertainty in single-level MRP lot sizing on a rolling horizon. It is shown that forecast errors have a tremendous effect on the cost effectiveness of lot-sizing techniques even when these forecast errors are small. Moreover, the cost differences between different techniques become rather insignificant in the presence of forecast errors. Since most industrial firms face demand uncertainty to some extent, our findings may have important managerial implications. Various simulation experiments give insight into both the nature and the magnitude of the cost increases for different heuristics. Analytical results are developed for the constant-demand case with random noise and forecasting by exponential smoothing. It is also shown how optimal buffers can be obtained by use of a simple model. Although the analysis in this paper is restricted to simplified cases, the results merit further consideration and study. This paper is one of the first to inject forecast errors into MRP lot-sizing research. As such it attempts to deal with one of the major objections against the practical relevance of previous research in this area.