Supply Chain Management

CAPACITY
MANAGEMENT

Capacity Management
- Result should be a workable plan that meets the priority
objectives and provides the capacity to do so
- Satisfy MRP and allow for adequate utilization of the work
force, machinery and equipment

Capacity Management
. Supply the necessary resources
. Capacity
-Available
-Required
-Balance
. Balance priority and capacity

Capacity Management
. Capacity
. Amount of work that can be done in a specified
time period
. Capacity of a
1. Worker
2. Machine
3. Work Center
4. Plant
5. Organization
. To produce output per period of time (APICS)

Capacity Management
. Rate of doing work not quantity of work
. Capacity available
- Capacity of system or resources to produce a quantity
of output in a given time period
. Capacity required
- Capacity of system or resources needed to produce a
desired output in a given time period
- Capacity required is load

Capacity Management
. Load : amount of
- Released and
- Planned
Work assigned to a facility for a particular time period
- Load is sum of all the required capacities
. Capacity Management
- Capacity management is responsible for determining the
capacity needed to achieve the priority plans.

Capacity Management
. Capacity management : (continuous)
- Capacity management is responsible for
determining
the capacity needed to achieve the priority plans
-Capacity management is responsible for
. Providing
. Monitoring and
. Controlling
- That capacity so that priority plan can be met

Capacity Management
. Capacity management : (continuous)
- The function of
. Establishing
. Measuring
. Monitoring and
. Adjusting
limits or levels of capacity in order to executive
all manufacturing schedules (APICS)

Capacity Management
. Capacity management : (continuous)
1- Capacity Planning
2- Capacity Control
Capacity Planning:
- Process of determining the resources required to
meet the priority plan
- Process of determining the methods needed to
make that capacity available
- Capacity planning links the various production
priority schedules

Capacity Management
. Capacity Control
- Process of monitoring the production output
compare it with capacity plans and taking correct
action when needed.

Capacity Management
. Capacity Planning
- Calculating the capacity needed to achieve the
priority plan
- Finding ways of making that capacity available
- If the capacity requirement can not be met, the
priority plan have to be changed
- Priority plans are started in units of product/output
- Tons of steel, yards of cloths, 1000 units of coils

Capacity Management
. Capacity Planning
- Capacity must be started in same units
-

Tons of steels, yards of cloths, 1000 units of coils

- Capacity must be started in hours available if no

common units are stated.
- The priority plan is translated into hours of work
required

Capacity Management
. Process of capacity planning
1 Determine the capacity available in each work
center in each time period
2 Determine the load at each work center in each time
period
- Translate priority plan in to hours of work required
at each work enter in each time period.
- Sum up the capacity required for each item on
each work center in each time period

Capacity Management
. Process of capacity planning (Continuous)
3 Resolve differences between available and required
capacities.
- Available capacity should be adjusted to match
the load
- Priority plan should be changed to match available
capacity

2 This process occurs at each level in the priority

planning process:
- Master production schedules
- Material requirement planning
- Etc
. Level of detail and time span very in each level

Capacity Management
. Planning Levels:
- Resources planning
. Long range monthly, quarterly, annual
- Link with production planning
- Changes in Manpower, Equipment, product design etc
- Resources plan and production plan set limits and levels for production
- Resources plan and production plan dictates master production
schedule
, MPS

Capacity Management
. Planning Levels:
- Rough cut capacity planning
. Input is master production schedule, MPS
- Check feasibility of MPS
- Provide warning of any bottlenecks
- Ensure utilization of work center and equipment
- Advise vendor of capacity

Capacity Management
Levels of capacity: (3)
Machine or individual level
Work center level
Plant level

Capacity Management
Methods of determining capacity available: (2)
Measured (demonstrated) capacity
Calculated (rated) capacity Measured (demonstrated) capacity
Examine previous production records
Average
Depends on utilization and efficiency
Utilization and efficiency can be obtained from previous record

Capacity Management
Methods of determining capacity available: (2)
Calculated (rated) capacity
Available time
Number of machines
Number of operators
Hours of operation
Rate capacity = available time x utilization x efficiency

Capacity Management
Calculated (rated) capacity (continues)
Utilization = active time / available hours
Efficiency = actual rate of production / std. rate of production

Capacity Management
Example
Over the previous four weeks, a work center
produced
120, 130, 150 and 140 standard hours of work.
What is the demonstrated capacity of the work
center:
Demonstrated capacity = 120+130+150+140
4
Demonstrated capacity = 135 standard hours

Capacity Management
Example
A work center has three machines and operated for eight hours
a day five days a week. What is the available time
Available time = 3 * 8 * 5 = 120 hours per week

Capacity Management
Example
Over a four week period, a work center produced 540
standard hours of work, was available for work 640 hours,
and actually worked 480 hours. Calculate the utilization and
efficiency of the work center?
Utilization = active time / available hours
Utilization = 480 / 640 x 100 = 75%
Efficiency = actual rate of production / std. rate of production
Efficiency = 540 / 480 x 100 = 112.5

Capacity Management
Capacity Required (Load)
Priority planning
Translating into hours
Capacity Required (Load): 2 steps

Determine the time needed for each order at each work center
Time needed = setup time + run time
Sum up the capacity required for individual orders
Determine standard hour of operation time
Add all standard hours for each work center

Capacity Management
Work center load report
Discuss chart:
Over load
Under load
Over capacity
Under capacity
Capacity and load can be juggle to meet the plan

Capacity Management

Scheduling orders
Schedule: time table for planned occurrence (APICS)
Back scheduling:
Start with due date
Work back to find start date using lead time of each operation
Information required for each orders
Quantity
Due date
Queue time
Wait time
Move time
Work center
Sequence of operation
Setup time of each operation
Run time of each operation
Work center available capacity

Capacity Management
Scheduling orders (continues)
Source of information
Order file
Quantity
Due date
Route file
Work center
Sequence of operation
Setup time of each operation
Run time of each operation

Capacity Management
Scheduling orders (continues)
Source of information
Work center file
Queue time
Wait time
Move time
Work center available capacity

Capacity Management
Scheduling orders (continues)
Process
Calculate the capacity required (time)
at each work center for each order
Starting with due date, schedule back
to get the completion date and start dates
for each operation

Capacity Management
Making the plan
Compare the load with available capacity
2 ways of balancing capacity and load
Alter the load
Shifting orders ahead or back
Change the capacity
Over time
Under time
Shift work force flexible
Use alternate work center
Subcontract work