Production Planning and

Scheduling

Group 9

Bipul Megotia
Gaurav Kataria
Jammy Maisnam
Kaavish Kidwai
Neer Prajapati
 Production Planning
Scheduling
Scheduling production
production
Manufacturing
Manufacturing production
production
Controlling
Controlling production
production activities
activities
 Dealing with the Problem
Complexity through
Decomposition
Corporate Strategy

Aggregate Unit Aggregate Planning

Demand
( Plan . Hor .: 1 year , Time Unit : 1 month )

Capacity and Aggregate Production Plans

End Item (SKU) Master Production Scheduling

Demand
( Plan . Hor .: a few months , Time Unit : 1 week )

SKU-level Production Plans

Manufacturing Materials Requirement Planning

and Procurement
lead times ( Plan . Hor .: a few months , Time Unit : 1 week )
Component Production lots and due dates

Part process Shop floor-level Production Control

plans ( Plan . Hor .: a day or a shift , Time Unit : real - time )
Aggregate Planning
Solution techniques
 Solution Approaches
• Graphical Approaches: Spreadsheet-based
simulation
• Analytical Approaches: Mathematical (mainly
linear programming) Programming
formulations
 A prototype problem
Forecasted demand: On-hand Inventory: Current Workforce
Jan: 1280 500 Level: 300
Feb: 640 Required on-hand
Mar: 900 Inventory at end
Apr: 1200 of June: Worker prod.capacity:
May:2000 600 0.14653 units/day
Jun: 1400

Working days per month

Jan: 20
Feb: 24
Mar: 18
Cost structure: Apr: 26
Inv. holding cost: $80/unit x month May: 22
Hiring cost: $500/worker Jun: 15
Firing cost: $1000/worker
 A prototype problem (cont.)
Forecasted demand: On-hand Inventory: Net predicted demand:
Jan: 1280 500 Jan: 780
Feb: 640 Required on-hand Feb: 640
Mar: 900 Inventory at end Mar: 900
Apr: 1200 of June: Apr: 1200
May:2000 600 May: 2000
Jun: 1400 Jun: 2000
An LP formulation for the prototype
Problem Parameters
problem
Dt = Forecasted demand for period t
dt = working days at period t
c = daily worker capacity
W0=Initial workforce level
I0 = Current on-hand inventory
CH = Hiring cost per worker
CF = Firing cost per worker
CI = Inventory holding cost per unit per period
Problem Decision Variables
Ht = Workers hired at period t
Ft = Workers fired at period t
Wt = Workforce level at period t
Pt = Level of production at period t
It = Inventory at the end of period t
An LP formulation for the prototype
problem

s.t.
Optimal Plan for the considered
example
•Fire 27 workers in January
•Hire 465 workers in May
•Produce at full (labor) capacity every month

Resulting total cost:

$379320.900
•
WHY WE NEED PRODUCTION


PLANNING
&

SCHEDULING
 Problem area
• complex production environments
– plastic, petrochemical, chemical, pharmaceutical
industries

• several different resources

– producers, movers, stores

• batch/serial processing with time

windows
• transition patterns (set-up times)
• by-products, co-products (re-cycling)
• non-ordered production (for store)
• alternatives
– processing routes, production formulas, raw material
 Problem area - example &
objectives
complex production environment


silo order

processor B1
purchas
processor silo
e
A processor B2 order
sacks
 warehous
e

• Task
– preparing a schedule for a given
time period
(not minimising the makespan)
– objective
• maximising the profit (minimising the
cost)
 Constraint Programming
(CP)
• Declarative problem solving

– stating constraints about the problem

variables
• a set of variables X={x1,…,xn}
• variables’ domains Di (usually finite set of
possible values)
• a set of constraints (constraint is a
relation among several unknowns)

– finding a solution satisfying all (most)

the constraints
• systematic search with consistency
techniques & constraint propagation
 CP - Advantages & Limitations
• Advantages
– declarative modelling
• transparent representation of real-life
problems
• easy introduction of heuristics
– co-operative solving
• integration of solving methods from
different areas (OR, AI …)
– semantic foundation
• amazingly clean and elegant languages
• Weaknesses
– NP-hard problems & tractability
– unpredictable behaviour
– model instability
 Planning and Scheduling -
Traditional View
Planning


– finding a sequence ofScheduling

activities – allocating the
transferring the activities to
initial world into a available
required state resources over
– AI & CP time respecting
– the constraints
PLANNER SCHEDULER
– – OR & CP
Plan = a list Schedule =
– of activities – allocated
– – activities
– –
– uses scheduler’s –
constraints –
(otherwise too – all activities are
tighten or too know in advance
relaxed plans)
 Planning and Scheduling in
Industry
• not strictly distinguished
– different discrimination criteria (time horizon p&lan
resolution) eting
k
Mar
• marketing planning
– what and when should be produced
– not planning in AI terminology pl an
ct ion
• production planning u
Prod
– generation of activities
– allocation to departments
• production scheduling ed ule
Sch
– exact allocation of activities
to machines over time
– sometimes new activities introduced
 Separate Planning and
Scheduling
• Co-operation between planner and scheduler
– too tighten plans (impossible to schedule)
– too free plans (less profitable schedule)
 backtrack from the scheduler to the planner


• Activity generation
– what if appearance of the activity
depends on the allocation of other
activities?
• alternatives
• transition patterns (set-ups)
• processing of by-products
• non-ordered production
 Mixing Planning and
Scheduling
• A scheduler with planning
capabilities
MARKETING
• generating activities during scheduling
PRODUCTION SCHEDULER
PLANNING Schedule
ACTIVITY - what activities
GENERATOR are necessary to
Marketing Plan =
satisfy the
what should be Activity Values for marketing plan
produced (custom parameters
orders plus expected
- how the
stock)
ACTIVITY activities are
ALLOCATOR allocated to the
resources over
time
 Conceptual models


Expressiveness


 What could be modelled? (problem area)

 What is easy/hard to express? (constraints)

 Constraint classification in
scheduling
• resource constraints
– resource limits in given time point
– capacity, compatibility
• transition constraints
– activity transitions in single resource
– set-ups
• dependency constraints
– dependencies between different
resources
– supplier-consumer relation
•
Time-line model
a discrete time line with time slices
– Production (item1) Change-over Production (item 2) Production (item 3)

resources
– empty Storing (item 1) Storing (items 1&B) empty

–
No production Production (item4) Production (item5)

– time

• description of situation at each time

point/slice
• planning and scheduling - no difference
– a variable for activity in the description of time
point/slice
• comments
– covers all the typical problems in complex
production environments
– all the variables are known in advance
• too many variables in large-scale industrial
problems
 Order-centric model
• a chain of activities per order (task)
time
 polymerizing polymerizing

storing storing
resources


extruding extruding

storin storing
 g

• description of the activity

– start, end (duration), resource
• enhancement
– activities in the production chain are generated
during scheduling starting from the order
(alternatives, set-ups)
– sharing activities between production chains (by-
products)
–
How to model? (in order-centric model)
• alternatives
– pre-processing (chosen by the planner)
– alternative activities in slots
• set-ups
– set-up slot is either empty or contains the set-up
activity (depending on the allocation of the next
activity)
• by-products (re-cycling)
– sharing activities between the production chains
• non-ordered production
– pre-processing (non-ordered production is planned in
advance - before the scheduling)
 Resource-centric model
• a sequence of activities per resource
• “what the resource can process” rather
than “how to satisfy the order”
resources Production (item1) Change-over Production (item 2) Production (item 3)

empty Storing (item 1) Storing (items 1&B) empty

No production Production (item4) Production (item5)

No order Order1 No order

time

• description of the activity

– start, end (duration), quantities, state, suppliers,
consumers
• representation
– a list of virtual activities
– transition constraints between successive activities

Comparison of models
 What’s next?
• ad-hoc implementation
– dynamic constraints
– propagation (early detection of
inconsistencies)
– labelling (incremental)
– heuristics (choice of alternatives)
• theoretical foundation
– structural constraint satisfaction (A.
Nareyek)
• parallelism
– agent based scheduling
 Program-Centric Strategic
Planning
• organizations are ill-prepared for the
competitive demands and lack the
discipline to identify, organize, and
execute the appropriate work in
any sustainable way.
• Need for an advanced way of
planning and orchestrating
strategic direction-setting.
• Changes need to be made on the fly.
Pressure to automate business
 R.I.T.A.
• Resilient I.T. Architecture - resilience
built in—capable of rapid change and
extensibility
• Four basic dimensions
• Work—the work performed by the
organization
• Information—the data needed to
perform the work
• Applications—the automated systems
needed to manage the data
• Technology—the computing and
communication devices needed to run
the systems
 Uninterrupted Business
Design
• Mass production to mass
customization
• Focus on forging relationship with
vendors in order to be able to
outsource business processes to
meet fluctuating demand.
• Most industried required to radically
restructure business before going
for automation.
•
 

 A CASE STUDY
 Saturn: Production Planning
and Scheduling

•Background
•Business Process Redesign:
Process, IT
•Implications

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SATURN: BACKGROUND

General Motors, Saturn’s Parent, Is the World’s Largest

Industrial Corporation and Leading Automobile Producer
a

- Operating loss comes from North American operations:

•International operations earned profit of $1.2 billion in sales of $30.8 billion
- Performance improved over 1991; sales increased 8.6% and losses decreased by 92%

- GMAC, GM’s vehicle financing subsidiary: $1.2 billion in profits

- EDS: $600 million in profits
- GM Hughes Electronics: $700 million in profits

Despitethe
Despite thepoor
poorperformance
performanceof
ofits
itsparent,
parent,Saturn
Saturnhas
hasgrown
grownat
atrecord
record
pace,increasing
pace, increasingits
itsmarket
marketshare
shareten-fold
ten-foldfrom
from1990
1990to
to1991.
1991.

a. Including accounting changes, GM experienced net loss of $23.4 billion

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SATURN: BACKGROUND

GM Has Experienced Erosion of Its Market Share

60%

50%

General Motors’ 40%

Market
Share of U.S.
Auto Sales 30%

20%

10%

1984 1985 1986 1987 1988 1989 1990 1991

Year

Source: Business Week, April 20, 1992, p. 32.

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SATURN: BACKGROUND

GM Faces Significant Challenges from “Lean”

Manufacturers, Both Here and Overseas

Chrysler: Ford: Toyota: Other Japanese

manufacturers:
•New platforms •Successful platform •Best-in-Class
teams production system: •Rationalized
•New dealer awareness -Level production
•Leaner systems scheduling alternatives
-Lower inventory
-Supplier •Lower inventory
coordination

Competitive
Pressures

Customer
•Industry
overcapacity
Intense
Intense dissatisfaction
competitive
competitive with:
•Increased labor environment for
costs environment
GM for •Long
lead times
GM
•Dealer
relations

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SATURN: BACKGROUND

GM’s Eroding Share Is Largely a Result of Outdated

Production Paradigms and Business Processes

Materials Flow: Dealer Customers

Parts Inventory
Dealer
Supplier GM Operation
s

Information Flow: Customers

Supplier Requests Dealer Orders
Production Demand
Information Information

•Production runs batched in stamping, body, paint, and trim

•Large inventory stocks at each station
•10,000 suppliers in 1988 and 5,500 in 1991; all operating in batch mode

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SATURN: BUSINESS PROCESS

GM’s Traditional Business Process Suffered from Key

Weaknesses

- Limited dealer choice of available cars

- Long lead time for a custom—or new— order

- No trading of real order data

- No synchronization with supplier
- Little adherence to ideal sequence

- Dealer buffer
- Large parts inventories

- Large setups
- Focus on long runs and quotas

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SATURN: BUSINESS PROCESS
GM Set Up Saturn as an Independent Entity with a New
Paradigm
How to provide superior
service?
How to deliver cars in 12
days?
How to develop worker,
supplier, and dealer
partnerships?
How to develop system
capturing world-class
lean principles?
How to treat distribution
and supplier as integral
part of production chain?
cmpm A00267ppmmJun93E
Separate entity
Centralized Greenfield
plant
Goal of one supplier per
input
Direct EDI input to
suppliers
Noncompetitive retailers
with electronic linkup
Supply chain information
system
Integrated supply
production-distribution
- 39 -
SATURN: BUSINESS PROCESS

Saturn’s IT Systems Play a Critical Part in Integrating Its

Supply Chain
Information Flow:
Allocations
Deliveries
Materials
Schedule

Materials Integrated Production Order Demand Sales

Integrated Planning Order
Management systemwith
system with management
management Data
Suppliers engineering, systemand
and Retailers
engineering, system
materialsand
materials and allocation
allocation
retailer orders
retailer orders system
system

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SATURN: BUSINESS PROCESS

Important System Characteristics Help State-of-the-Art

Forecasting

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SATURN: BUSINESS PROCESS

Saturn’s Time Horizon Is Based on a Benchmarking Study

Time Planning Flexibility

22 weeks Aggregate plan

4–8 weeks ±10% on model type

±20% on options

2–3 weeks ±5% on options

1 week Load plant, ±5% exterior

colors

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SATURN: BUSINESS PROCESS

Saturn’s Production Planning Process Is Integrated with

Dealers, Suppliers, and Major Component Manufacturers

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SATURN: BUSINESS PROCESS

The Ideal System Pulls Requirements Exactly When Needed

but May Need an Interior Buffer

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SATURN: IMPLICATIONS

Saturn’s Solid Results Are Related to Managing the Entire

Production and Supply Chain for the Benefit of Its Customers

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SATURN: IMPLICATIONS

A Number of Key Lessons Can Learned from the Saturn

Experience

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