• Choose a category
• All
• Classic-Fiction

By Root 2513 0

penetration into the buffer is less than 33 percent, we are in green—actually too much finished-goods stock at the moment. When the buffer is in yellow—buffer status between 33 and 66 percent—then the buffer state is truly satisfactory. (So we have at least one-third of the target in finished-goods inventory and the rest lined up in the shop for fabrication when needed.) Likewise, when the buffer penetration is equal to or above 67 percent, the buffer is red. The immediate message is expedite the order as you are about to stock out.

The priority rules are now clear: red orders should be expedited and should trigger management attention. Red orders definitely should have priority over all other orders, while yellow orders have priority over green orders.

Within the same color code, the decision of which order to do next is in the hands of the operators on the floor. The author believes that the buffer status, on top of the color code itself, is valuable information for the operator. If two red orders show up, one with buffer status of 70 percent and the other with 96 percent, it seems clear that one needs a very persuasive argument not to process the 96 percent order first. However, if one order is 70 percent and the other is 74 percent, then the real choice probably lies in other factors.

Generating Production Orders and the State of Capacity

The ideal situation is to generate new production for all items that were consumed the day before every day. What is the obvious negative branch of doing exactly that?

What could easily happen is that too much time is devoted to setups. Should we be concerned about doing too many setups? When at least one resource is losing too much of its protective capacity, then we definitely should care. The problem in losing the protective capacity is that the replenishment time grows longer and longer. Then, with longer replenishment times, more and more end products would become red. When the number of red orders exceeds 20 percent, then the whole scheme of maintaining priorities loses its effectiveness and a significant number of shortages will occur.

The lesson we should keep in our mind is that MTA requires a certain level of protective capacity. We deal more with that issue because losing protective capacity might be caused by too much total demand (not just the demand for one item, but also the demand for the whole product mix). Right now, we do not wish to let too many setups be the cause for losing protective capacity.8 There are two ways to deal with the issue:

1. Dictating a minimum production batch. The minimum batch is not part of the target level! It comes on top of it. That means that once the inventory in the pipeline plus on-hand is less than the target level, a production order is generated, but its size equals a quantity at least equal to the minimum batch quantity. We may discover that the total inventory is above the target level, but it should be less than the target level plus the minimum batch.

2. Managing the capacity of the capacity constrained resource (CCR) and releasing new production orders only when it seems reasonable, the CCR would work on them soon. The concept of the “planned load” was defined in Chapter 9; here we need to define the planned load for the specific environment of MTA.

Definition9: The regular planned load for MTA is the summation of the derived load on the CCR of all the production orders already released that have not yet been processed by the CCR.

Releasing orders only up to a certain limit of the regular planned load causes the release of new orders to be under control as this procedure releases new production orders only up to that level where the regular planned load approaches the agreed limit. Production orders that were not released today will be considered again the next day. The regular planned load for the next day should be smaller by the amount of work the CCR has processed during the previous day and this allows more orders to be released.

What should the criteria be for choosing which production orders to release?