Tuesday, February 14, 2012

Practicality of Capacity Planning

Capacity Planning is technically a component of MRP II. It is a system that analyzes your capacity to produce a product (more likely a long list of products) and compares that to what it knows about your ability to produce the product.

A few low- to mid-range manufacturing control systems advertise capacity planning capabilities. Based on the comparison of production demand and supply, they can alert you to impending “bottlenecks.” We believe system such as this should more properly be called a Capacity Analysis system. While its output can be illuminating, it performs no actual planning, and the benefits achieved are far less than what is typically advertised.

A true planning system, know as Capacity Resource Planning (CRP for short) not only tells you where the production bottlenecks are bound to show up, but they tell you what to do about them to minimize the impact on other tasks.

For example, a CRP system knows that Bill and Fred and Sally are scheduled to work on Project A starting June 1st. It knows that Mike and Sally and Jim are scheduled to work on Project B starting June 15th. It knows that Fred is due for a week’s vacation starting June 12th. It knows that Mary isn’t scheduled to work on any project until July 1st. If Fred leaves on vacation as planned, but Project A isn’t yet complete, a CRP system would suggest someone who could jump in to help (that’s the planning part). It would know that Mary is available in the required timeframe, but that she works 75% as fast as Fred and takes every other Wednesday afternoon off as a community volunteer. If Mary does join Project A, but slows it down and the project isn’t complete until June 20th, a CRP system can plan the impact on Project B which Sally was supposed to start, along with Mike and Jim on June 15th.

Now, if just reading the paragraph makes your head hurt, you’re not alone. Some very complex and very expensive manufacturing control systems claim to do effective CRP.

We have had personal experience with one $20+ million MRP II system that created more bottlenecks than it resolved with each click of the “fix it” button. And the salesman said it was a bargain at $20million. We are not recommending it.

If we have convinced you to steer away from Capacity Planning, the question remains whether the “capacity lite” capability of the software you may be looking at is going to be of any value.

Bear in mind, that to do any capacity analysis/planning, the software must know about every operation associated with the production your client performs. This means that a simple bill of material, even a multi-level bill of material, is insufficient if you intend to perform capacity analysis/planning. The bill of material must include what are termed “routings” or “routing operations” – a step by step list of the processes that must be performed, in sequence, in order to produce a given product. For anyone with rudimentary (or non-existent) bills of material, collecting and entering that level of detail is a big, big task.

Coupled to the bill of material routings, the software must have a detailed description of every work center – area of the plant where some specific task is performed: when the work center is open for business, how fast it can operate, and what additional resources (material, labor, and overhead) it requires.

To perform capacity analysis, the manufacturing software computes the “capacity demand” (derived from the BOM routings) and the “capacity supply” (derived from the work center descriptions). From this, it can highlight any impending “capacity bottlenecks.” It is unlikely that any software can tell you what to do about these bottlenecks.

From our experience, true capacity planning is out of the reach of all but the most sophisticated manufacturers. Capacity analysis is nice to have if you are willing to invest in creating – and maintaining – all the supporting data for routings and work centers.

Since its release in 2009, the Shop Floor Control module of the MISys Manufacturing system (a $1750 add-on to MISys Basic Manufacturing) has proven to be a reasonable and effective alternative to complex and mind-numbing capacity planning systems. For users who need a high degree of production control and costing, MISys Shop Floor Control does the job.

Invest the next ten minutes of your time and take the 6-step tour. Download the MISys Manufacturing brochure, fact sheets, watch the demo videos, get a price estimate and more.

Visit www.misysinc.com

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