Dd capacity scheduling

Demand Driven Capacity
Scheduling and Execution
Chad Smith
Partner, Demand Driven Institute
Co-Author Orlicky’s Material Requirement Planning 3/E
Co-Author Demand Driven Performance – Using Smart Metrics
All material and © copyright Demand Driven Institute 2013, all rights reserved

Planning and Scheduling is Harder Than Ever
• The Manufacturing and Supply Chain landscape is more volatile
than ever – the bullwhip is alive and well in today’s environment
• Customer Tolerance Times have decreased substantially relative to
the time it takes to procure, manufacture and distribute items
• Product variety, options and complexity has put tremendous
pressure on planning and scheduling systems
• FLOW is the critical link between service, asset utilization and ROI

The Demand Driven Operating Method
• The protection of FLOW is paramount
• ROI is directly proportionate to the speed of flow
of relevant materials and information
• Demand Driven operating methods seek to
protect the flow of both relevant information and
materials

DDMRP and Capacity Scheduling
• DDMRP has Implications for Capacity Scheduling
• Advanced Session Webinars
• Download the paper on DDMRP Master Scheduling for
more information

DDMRP Scheduling Basics
DDMRP uses buffered “Decoupling
Points” to establish independent
planned and scheduled horizons.
DDMRP creates resupply signals based
on the “available stock” status of each
buffer. This gives prioritized sequence
based on actual need.
On-the-floor priority is then
determined by the real time buffer
status of the decoupling points that
the open orders are feeding.

When Will we Need More Scheduling
Capability?
• When the use of better shop floor scheduling will
compress lead times and reduce variability so
that make item stock buffers can be reduced.
• When no decoupling point can be inserted
before the shipping point. (Make or Configure to
Order)
• Mixed-mode operation
Advanced Topics Webinar 3

An Mixed-Mode Example
In this case better scheduling and execution is required to synchronize and
prioritize the make to stock and make to order business.
Better lead time and less variability within the plant will reduce the end item
buffer.
10 5 10
5 10 15
5
10
30 10 20 Customer
Supplier
Supplier
Purchased Components
Suppliers

Extending the Demand Driven Method
• The extension of Demand Driven methods to
shop floor scheduling and execution can be seen
in the new book Demand Driven Performance –
Using Smart Metrics
• A series of articles in Strategic Finance Magazine
previews the book – the articles are available for
free download
All material copyright 2013 Constraints Management Group, LLC

Introducing Control Points
• Places to transfer, impose, and amplify control through a
system.
• The 14th edition of the APICS Dictionary defines control points
as “Strategic locations in the logical product structure for a
product or family that simplify the planning, scheduling, and
control functions. Control points include gating operations,
convergent points, divergent points, constraints, and shipping
points. Detailed scheduling instructions are planned,
implemented, and monitored at these locations.”(p. 33)
C

Placing Control Points
Placed between decoupling points with the objective of
better controlling the lead‐time zones between those points.
A shorter and less variable lead time results in less stock
required at the decoupling point (a working capital
reduction).
C

Placing Control Points
Placed between decoupling points and a customer when
decoupling the end item is not possible or in a mixed mode
operation.
Customer C
Customer
Customer
Make/Configure to Order

Determining Control Points
1. Points of Scarce Capacity determine the total system output potential. The
slowest resource‐‐the most loaded resource—limits or defines the system
total capacity.
2. Exit and Entry Points are the boundaries of your effective control. Carefully
controlling that entry and exit determines whether delays and gains are
generated inside or outside your system.
3. Common Points are points where product structures or manufacturing
routings either come together (converge) or deviate (diverge). One place
controls many things.
4. Points that Have Notorious Process Instability are good candidates
because being a control point provides focus and visibility to the resource and
forces the organization to bring it under control or plan for, manage, and
block the effect of its variability from being passed forward.

Placing a Control Point
In this case we have a resource is both
the slowest pace resource as well a
major integration point in the routings
10 5 10
5 10 15
5
10
C →
30 10 20 Customer
Supplier
Supplier
Suppliers
→
→
→

Scheduling a Control Point
10 5 10
5 10 15
5
10
30 10 20 Customer
Supplier
Supplier
Suppliers
→
→
→
C
Replenishment
orders
Sales Order Demand
1 2 3 4 5 6 7 8 9 10 11 12
Capacity
The control point is finitely
scheduled with both MTS and
MTO orders
Sales orders
→
Loading is important to see
for lead time quotation

Synchronizing Material Release
Schedule material release to the control point schedule
Late release will jeopardize the control point schedule
Early release raises WIP levels unnecessarily
10 5 10
5 10 15
5
10
30 10 20 Customer
Supplier
Supplier
Suppliers
→
→
→
C
→
Work orders
Work orders
Work orders

Control Point Schedules
We now have five schedules – all synchronized around a
resource Control Point schedule (Drum)
30 Customer
Supplier
Supplier
Suppliers
→
→
→
C
→
DRUM

Protecting the Schedule
We must insulate the schedules against the accumulated
variability that occurs in the sequences preceding the schedule
– delays are passed on, gains are not
How can we make sure that the schedules are maintained (not
rescheduled)?
10 5 10
5 10 15
5
10
30 10 20 Customer
Supplier
Supplier
Suppliers
→
→
→
C
→
Note: the purchased part stock buffers
protect the material release schedules
against supplier variability

Time Buffers
WO 1595
Upstream
Processes
Scheduled Start at
Control Point
▼
Scheduled Entry to
Buffer
▼
WO 1781
WO 1626
WO 1601
WO 3279
WO 2001
C
→
Early Green BYUeFllFoEwR Red
Late
Example: 9 hour buffer

Buffers Inserted
10 5 10
5 10 15
5
10
30 10 20 Customer
Supplier
Supplier
Suppliers
→
→
→
C
→

The 10 Zone Buffer Board
Early Green BYUeFllFoEwR Red Late
Scheduled Start at
Control Point
▼
Scheduled Entry to
Buffer
▼
Example: 9 hour buffer
Yet to be Received
Received
WO 1626
WO 1626
Green
Yellow
Red
OK
Investigate
ACT

How a Buffer Board works
Yet to Be Received
Early
48709-01
Received
Early
Green
Green Yellow
Yellow Red
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Note: 16 hour work day
Current Day and Time:
Monday, 7:00 am

Yet to Be Received
Early
48709-01
Received
Early
Green
Green Yellow
Yellow Red
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Wednesday, 10:00 am

Yet to Be Received
Green
48709-01
Early
Received
Early
Green Yellow
Yellow Red
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Wednesday, 1:00 pm

Yet to Be Received
Received
Yellow Red
48709-01
Early
Early
Green
Green Yellow
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Wednesday, 4:00 pm

Yet to Be Received
Received Forced Reason Code
Yellow Red
48709-01
Early
Early
Green
Green Yellow
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Wednesday, 5:00 pm
49322-01
49527-03

Yet to Be Received
49322-01
49527-03
Received
Yellow Red
48709-01
Early
Early
Green
Green Yellow
Red
Late
Late
9 Hours of Buffer
Time scheduled
on Drum
(Wed 7:00 pm)
48801-01
Wednesday, 7:00 pm

Reason Code Analysis

Analyzing Buffers Over Time

Dd capacity scheduling

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