Project work in Production Planning & Control

“Split Air Conditioner Production System”
MG 2205 OPERATIONS MANAGEMENT

Production Engineering & Management

Submitted By Sabih Zeb Ahmed Saad Naseem Thomas Hausmann Amin Guelil

Submitted To Dr. Daniel T. Semere

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Glossary
Actual Capacity (Total available hours – preventive maintenance – down time hours)/(time of process per product) Aggregate Plan The aggregate production plan specifies in intermediate term how to provide the capacity to meet the demand in the intermediate period. It is often done by trial and error in which as many possible scenario are tested and later compared. Assembly Assembly refers to the systematic assembly of components and/or modules onto products or modules, thus to form units of higher product levels. The reversal of assembly is called disassembly and uses also different techniques. Back Order Back orders occur, if customer needs in concern of orders are not met. BOM – Bill of Material List of all raw materials, parts, subassemblies and assemblies needed to produce one unit of a product. Capacity Planning In capacity planning the needed production capacity is determined to meet customer needs. In this context, the maximum amount of work which the company is capable is called “capacity”. Lead, lag and match strategy are differentiated: Lead strategy: aggressive strategy while adding capacity in prognosis of increased demand. This could lead to inventory, which might be costly and wasteful. Lag strategy: conservative strategy which is adding capacity only if full capacity is reached. On the one hand this minimizes the risk of waste. On the other hand customers could be lost. Match strategy: moderate strategy while adding only small amounts of capacity in response to increased demand. Changeover Time Time to set a machine from one setting to another. Customer order decoupling point This is a virtual point in the supply chain, where stocks are created in order to decouple orders and pre-fabrications. The choice of CODPs is a strategic matter and delivery times, inventories and the level of service should be considered. Cyclical component Mostly a seasonal move of measurements which occurs cyclical. Design Capacity (Total available hours a year)/(Number of hours the process needs per product)
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EOQ - Economic Order Quantity The EOQ is a number within the procurement logistics that minimizes the sum of variable and fix ordering and inventory cost for a given level of service. The EOQ calculation solves the trade-off between small ordernumbers (Inventory cost) and Order-to-order time (Ordering cost). Effective Capacity (total available hours – preventive maintenance) / (time for process per product) Efficiency Actual Capacity / Effectiv Capacity Gross requirements ( MRP) The total expected demand for an item during each time period. Holding cost Cost of handling and storing. Inventory Products, modules or components stored physically. Kanban Kanban (Japanese “card”, “table”, “document”) is a method of production process control. The pull principle is based solely on actual consumption of materials at the source and the sink. Lead time Lead time is the time from placing an order for a material until it is acquired. Each component has its own lead time, depending on the properties of the supply line. MPS – Master Production Schedule The master production schedule indicates the quantity and timing of planned production, taking into accountdesired delivery quantity and timing as well as on-hand inventory. Three basic inputs are used: beginning inventory, forecast for each period of the schedule, customer orders which have already committed. MRP – Material Requirement Planning MRP is an information processing system (often computer based) in which the finished product requirements of the MPS are translated into time-phased requirements of subassemblies, component parts and raw materials, working backward from the due date using lead times to determine how much and when to order. Net Requirement ( MRP) The actual amount needed in each time period. NR = Gross requirement – projected on hand + safety stock

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Ordering Cost ( EOQ) Cost related to order preparation, communication, receiving cost etc. Planned order receipt ( MRP) The quantity expected to be received by the beginning of the time period. Planned order releases The planned amount to order in each time period. Product structure tree PST is a visual depiction of the requirements in a bill of materials where all components are listed by levels. Some of the components in a product may be needed in multiples, for instance for symmetrical products you need duplication of the same component. Such depiction is called exploding the BOM. Production Planning This is a decision making process about what and how much to produce in the future. It’s based on the demand forecast and orders from customers, production capacities and inventory. Production Rate The number of units manufactured in a given period of time or the time required to produce a single article. Production System A production system defines next to resources and manufacturing also rules and the method by which certain processes are carried out in production. It is created out of specific company needs. Projected on hand ( MRP) POH is the expected amount of inventory at hand at the beginning of each time period. Projected Inventory PI = Inventory from previous week – current week requirement Pull-principle The pull principle is a system for process control, in which the orders are pulled through the production. The impulse for working on an order is given from the end of the supply chain. That means, it is done in opposite direction to the material flow. It establishes a demanddriven production. Push-principle The push principle is a production control system in which the orders are pushed through the supply chain. The impulse for the initiative of each step is triggered by a fixed plan. Scheduled receipts ( MRP) Open orders scheduled to arrive from suppliers by the beginning of the period.
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Scheduling It deals with the operational (short term), temporal, quantitative management and control of all operations that are necessary for the production of goods and commodities. Takt Time Total available time / Desired output rate Time horizon ( Capacity Planning, Aggregate Planning, Scheduling) In production planning three levels of time horizons are differentiated. Long term (years to decades), intermediate term (months to years), short term (hours to weeks) Trend A trend in a case of measurements in science, technology and economy is a systematic positive or negative effect on the whole measurement in time. Utilization Actual Capacity / Design Capacity

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. References…………………………………………………………………… A2..5.2..1. 2. Model Enhancement………………………………………………………….Customer order decoupling point……………………… 3. Scheduling………………………………………………………....2. Indoor Unit Manufacturing Process……………………………..2. Outdoor Unit Manufacturing Process…………………………..1. 2...9. 3. 3.2. 0.2. 1... Forecasting Methods……………………………… 3. 3.6.3. 1.1.. Appendix…….TABLE OF CONTENTS 0.8.. Product presentation…………………………………………………………. Bill of Materials and Product Structure Tree…………………… 3... Manufacturing Process and Variants…………………………………………. Air Conditioning and Air Conditioner…………………………. 1. Our Forecasting………………………………….……………………………………………………………… 6 . 3. Aggregate Planning……………………………………………. Master Production Schedule…………………………………….1.2.3.... Economic order quantity (EOQ). Introduction…………………………………………………………………… 0. Historical Data Trend…………………………………………… 3. CODP . 3.2.1. 2.………………………………. Variants…………………………………………………………. 3. 3. KanBan…………………………………………………………. Split Air Conditioner and associated parts……………………… 2. Introduction……………………………………………………. Approach……………………………………………………….4. 2. 3.7. A1. Capacity Planning……………………………………………….4. Data Mining……………………………………………………...

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8 . The following analysis and implementation of course knowledge is based on the Process Modeling project from last semester. Data mining is basically an analytic process. 1) The initial exploration In the initial exploration stage we gathered further data for our Air conditioning manufacturing plant model which we designed using Extend6. Introduction 0.2. the process of data mining consists of 3 stages (1) The initial exploration (2) model building with verification/validation (3) Deployment. Approach The product we have chosen is Air conditioner. We modified the model many times until we got the desired result.0.1. assumptions had to be made of how much detail analysis was required for certain steps. 0. The workload was divided amongst team members and regular meetings were held to make sure the progress was according to schedule. The order of implementation of the methods learned in production planning and control is done according to the lecture. Often. 3) Deployment In the third stage of data mining. 2) Model building with verification/validation The already built model was taken into consideration and it was further modified for smoother results. the selected model from the previous step was taken and now we applied forecasting techniques to the selected model for further improvements and in order to generate predictions or estimates of the expected forecast. and then to validate the findings by applying the detected patterns to new subsets of data. which is designed to explore data in search of consistent patterns and systematic relationships between variables. The original data is acquired from PEL Pak Electron Limited which produces Air conditioners in Pakistan with collaboration with M/s AEG Germany. Data Mining We start our process by using the three stages of data mining. The log at the end of this report documents this. Using the mentioned strategy we analyzed our model and enhanced its performance. The main goal of data mining is prediction.

Indoor Unit: It is the indoor unit that produces the cooling effect inside the room. Product presentation 1. motor vehicles etc. 1. 9 . packaged air conditioner. The term can refer to any form of cooling. central air conditioning plants. houses components like the compressor. An air conditioner (AC) is a machine designed to stabilize the air temperature and humidity within an area (cooling as well as heating depending on the air properties at a given time) typically using a refrigeration cycle. condenser and expansion valve. Split Air Conditioner and associated parts: The split air conditioner comprises of two parts: the outdoor unit and the indoor unit. All work on the same basic principle of the refrigeration cycle. The split air conditioner can be used to cool one or two rooms.1. Its use in the form of providing comfort can be found in houses. Further. window air conditioner system. ventilation or disinfection that modifies the condition of air. There are many types of air conditioners present namely. The indoor unit of the split air conditioner is a box type housing in which all the important parts of the air conditioner are enclosed. heating. The indoor unit comprises the evaporator or cooling coil and the cooling fan. hospitals. the present day split units have aesthetic looks and add to the beauty of the room.2. For this unit you don’t have to make any slot in the wall of the room. Our focus is concerned on split air conditioning systems. offices. The outdoor unit. Air Conditioning and Air Conditioner: The process of air conditioning refers to the removal of heat from indoor air for thermal comfort.1. split air conditioner system. fitted outside the room.

The shaft of the blower rotates inside the bushes and it is connected to a small multiple speed motor. This air is then blown to the room where the cooling effect has to be produced. The cooling coil is covered with the aluminum fins so that the maximum amount of heat can be transferred from the coil to the air inside the room. thus the speed of the blower can be changed. The blower sucks the hot and unclean air from the room and supplies cool and clean air back. It is an induced type of blower and while is sucks the room air it is passed over the cooling coil and the filter due to which the temperature of the air reduces and all the dirt from it is removed. When the fan speed is changed with the remote it is the speed of the blower that changes. after producing the cooling effect is again sucked by the blower and the process of cooling the room continues. 10 . 3) Cooling Fan or Blower: Inside the indoor unit there is also a long blower that sucks the room air or the atmospheric air. 2) Air Filter: The air filter is very important part of the indoor unit. Thus the clean air at low temperature is supplied into the room by the blower.1) Evaporator Coil/Cooling Coil: The cooling coil is a copper coil made of number turns of the copper tubing with one or more rows depending on the capacity of the air conditioning system. When the blower sucks the hot room air. it is first passed through the air filter and then though the cooling coil. which leads to the cooling of the air. The air. 4) Drainpipe: To remove condensed water vapors from evaporator the drainpipe is connected to the some external place outside the room where water can be disposed of. Thus the drainpipe helps removing dew water collected inside the indoor unit. The air filter in the wall mounted type of the indoor unit is placed just before the cooling coil. The refrigerant from the tubing at very low temperature and very low pressure enters the cooling coil. The blower absorbs the hot room air or the atmospheric air and in doing so the air passes over the cooling coil. It removes all the dirt particles from the room air and helps supplying clean air to the room.

in the case of a three-port valve. 11 .5) Louvers or grill: The cool air supplied by the blower is passed into the room through louvers. This valve maintains constant superheat in the evaporator. the outflow is switched between the two outlet ports. The valve is controlled by an electric current through a solenoid coil. which is connected to TXV by a length of capillary tubing. 7) Expansion valve The thermostatic expansion valve (TEV or TXV) is used for refrigerant flow control and operates at varying pressures resulting from varying temperatures. Thermal expansion valve has a sensing bulb. There are two types of louvers: horizontal and vertical. With louvers one can easily change the direction in which the maximum amount of the cooled air has to be passed. 6) Thermostat: A thermostat is a device for regulating the temperature of a system so that the system's temperature is maintained near a desired set point temperature. A thermostat may be a control unit for a heating or cooling system or a component part of a heater or air conditioner. Solenoid valves may have two or more ports: in the case of a two-port valve the flow is switched on or off. 8) Solenoid valve A solenoid valve is an electromechanical valve for use with liquid or gas. The capillary tube transmits sensing bulb pressures to the top of the TXV valve’s diaphragm. The louvers help changing the angle or direction in which the air needs to be supplied into the room as per the requirements.

Out Door Unit: 1) Condenser: Air conditioners use refrigerants that easily convert from a gas to a liquid and back again. The closer the molecules are together. The working fluid arrives at the compressor as a cool. more quickly. by the same means. The working fluid leaves the compressor as a hot. By reversing the flow of refrigerant. This is used to transfer heat from the air inside of a home to the outside air. The liquid goes into the evaporator through a very tiny. the higher its energy and its temperature. When it does it begins to evaporate into a gas. and with the same hardware 12 . high pressure gas and flows into the condenser. low-pressure gas. This packs the molecule of the fluid closer together. narrow hole. that reverses the direction of refrigerant flow. On the other side. The fins on coils act just like a radiator in a car and help the heat go away. its temperature is much cooler and it has changed from a gas to a liquid under high pressure. The compressor squeezes the fluid. the liquid's pressure drops. 2) Reversing valve: A reversing valve is a component in a heat pump. or dissipate. This allows a residence or facility to be heated and cooled by a single piece of equipment. the heat pump refrigeration cycle is changed from cooling to heating or vice versa. When the working fluid leaves the condenser.

Furthermore the outdoor unit also comprises of the solenoid valve. expansion valve and a fan which have already been discussed in the indoor unit parts above. As gases are compressible. the compressor also reduces the volume of a gas. Compressors are similar to pumps: both increase the pressure on a fluid and both can transport the fluid through a pipe. thermostat. Indoor and Outdoor Unit 13 .2) Compressor: A gas compressor is a mechanical device that increases the pressure of a gas by reducing its volume.

Variants Four Variances are introduced Variance 1 2 3 4 1 TON with cooling 2 TON with cooling 1 TON with cooling and heating 2 TON with cooling and heating Production Volume (%) 25% 25% 25% 25% Variant 1: 1 Ton cooling capacity for normal air conditioner Variant 2: 2 Ton cooling capacity for normal air conditioner Variant 3: 1 Ton capacity reversible split Air conditioner acting like a heat pump. Manufacturing Process and Variants 2. The refrigeration cycle in both the cases remains the same. They manufacture all the non-electrical components in facility. Indoor and outdoor unit. But we are modeling the whole manufacturing process. Auxiliary components are assembled in between. So there are two basic production lines which join at the end.2. Conversion between cooling and heating is achieved by adding a single four way reversing valve to the normal air 14 . A heat pump is a machine that moves heat from one location at a lower temperature to another location at a higher temperature using mechanical work.2. The difference between a normal air conditioner and a hear pump is that a heat pump can be used to both heat and cool a particular area.1. 2. Now a day’s due to high production load. Introduction We have replicated the manufacturing processes used in LG Air conditioner Industries (Pvt) limited. Our product is made up of two major parts. quality issues and market competence the manufacturing is substituted by only assembly of parts and most of the components are purchased from suppliers or daughter companies.

It is then punched to produce slots and holes for assembly and mountings.3. In cooler climates it is common to have heat pumps Variant 4: 2 Ton capacity reversible split Air conditioner acting like a heat pump. 4. On one line copper tubes from supplier are passed through straightening machine. metal sheets are first sheared on metal cutting machine according to the dimensions 2. 15 .conditioning unit. Then square blanks are produced from them to make a single fin. by reversing the direction of the valve one can choose between cooling and heating. One another line aluminum strips from large rolls are punched slightly with diameter slightly smaller than copper tube Dia. Indoor metal casing manufacturing steps Specifications: Hydraulic Shearing machine: 2000 kN. Finally they are powder coated and dried under UV light to give an aesthetic look and corrosion resistance. 3. 8-10 strokes per minute Punching machine: 1500 kN. 3. For casing. Punched sheets are then bended to produce corners and sides of casing. 2. 5. 2. 3 strokes per minute Powder coating /painting: 1 part per minute Evaporator coils: 1. Sheet metal casing is then conveyed to the assembly station. 10 strokes per minute Bending/folding machine: stroke length 50 inch. Indoor Unit Manufacturing Process Steps in the production of our indoor unit are mentioned below: Metal casing: 1.

02 BTB Trimming is usually done by hand. 1 part/ minute Evaporator coils manufacturing steps Front grill: 1. The ends are then soldered. 7. 16 . The molded panel has sharp corners and plastic hangovers. 2.(Aluminum fins can be produced on double action punching and blanking machine or two different machines) 4. The tubes are bended to produce evaporator or condenser. they are removed in trimming process. Plastic granules are used in injection molding machine to produce front grill of air conditioner cast depending on the model under manufacturing. 5. 80 oz. speed 18 m/min Hi speed punching n blanking machine. 10 stokes per minute Soldering: soldering is manually done to assure leak proof quality. 6. Machine specification: Injection molding. shot. Machine specification: Tube straightener: Capacity Range Tube OD 1. The size depends upon the capacity of air conditioner. 500 kN. 30 parts per stroke. Then fins are stacked on copper tube at assembly station.5 – 8mm.

metal sheets are first sheared on metal cutting machine according to the dimensions 2. 1. Control panel: It is sophisticated electronic circuit and usually purchased from supplier. Sheet metal casing is then conveyed to the assembly station. 4.Front grill manufacturing steps Expansion Valve: Expansion valve is a precise electrical component and usually purchased from suppliers. but usually these are also purchased in AC manufacturing as air filters are usually cheap.4. Air filters: Air filters can be produced by plastic injection molding and then assembly with filter fabric. 5. Outdoor Unit Manufacturing Process Metal casing: Outdoor unit case has same manufacturing process as indoor unit case except the size is different. Punched sheets are then bended to produce corners and sides of casing. 2. It is then punched to produce slots and holes for assembly and mountings. For casing. 3. Thermostat: This component is also purchased. Finally they are powder coated and dried under UV light to give an aesthetic look and corrosion resistance. Outdoor metal casing manufacturing steps 17 .

1 part/ minute Condenser coil manufacturing steps 18 . 3. 10 stokes per minute Soldering: soldering is manually done to assure leak proof quality. 10 strokes per minute Bending/folding machine: stroke length 50 inch. The ends are then soldered. 2. 8-10 strokes per minute Punching machine: 1500 kN.5 – 8mm. 5. The tubes are bended to produce evaporator or condenser. 3 strokes per minute Powder coating /painting: 1 part per minute Condenser coils: This process is same as evaporator manufacturing. One another line aluminum strips from large rolls are punched slightly with diameter slightly smaller than copper tube Dia. Then fins are stacked on copper tube at assembly station. 30 parts per stroke. The size depends upon the capacity of air conditioner. 500 kN. speed 18 m/min Hi speed punching n blanking machine.Specifications: Hydraulic Shearing machine: 2000 kN. On one line copper tubes from supplier are passed through straightening machine. Then square blanks are produced from them to make a single fin. (Aluminum fins can be produced on double action punching and blanking machine or two different machines) 4. Machine specification: Tube straightener: Capacity Range Tube OD 1. 6. except the dimensions are different 1.

19 .Cooling fan: 1. If the molded panel has sharp corners and plastic hangovers. they are removed in trimming process. 2. 21 oz. Machine specification: Injection molding. Fan motor is purchased from supplier and conveyed to assembly station where it is joined with fan blades. it is purchased from supplier. Pressure switch: Safety pressure switch is purchased from supplier to ensure high quality. Reversing valve: In heating and cooling AC models reversing valve is installed. Plastic granules are used in injection molding machine to produce cooling fan blades of air conditioner depending on the model under manufacturing. 14 BTB Fan manufacturing steps Compressor: Hermetically sealed compressor is purchased from dealer or Daughter Company. shot. 3.

1. Capacity Planning 1) Initial Calculations Capacity planning is basically the process of determining the production capacity needed by an organization to meet changing demands for its products. The capacity planning for our whole production system is carried out as using the following formulas: 𝐷𝑒𝑠𝑖𝑔𝑛 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = 5840 𝑇𝑜𝑡𝑎𝑙 𝐻𝑜𝑢𝑟𝑠 𝑎𝑣𝑎𝑖𝑙𝑏𝑙𝑒 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟 = = 58400 0.1 To summarize in the form of a table we achieve the following results after applying the above mentioned formulas to our production system.1 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 ℎ𝑜𝑢𝑟𝑠 𝑡ℎ𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑛𝑒𝑒𝑑𝑠 𝑝𝑒𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = 𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = 𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑏𝑙𝑒 ℎ𝑜𝑢𝑟𝑠 − 𝑝𝑟𝑒𝑣𝑒𝑛𝑡𝑖𝑣𝑒 𝑚𝑎𝑖𝑛𝑡𝑒𝑛𝑎𝑛𝑐𝑒 − 𝑑𝑜𝑤𝑛 𝑡𝑖𝑚𝑒 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 ℎ𝑜𝑢𝑟𝑠 𝑡ℎ𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑛𝑒𝑒𝑑𝑠 𝑝𝑒𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 5840 − 180 − 150 = = 55100 0. Model Enhancement 3.3 % 𝐷𝑒𝑠𝑖𝑔𝑛 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 58400 𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑏𝑙𝑒 ℎ𝑜𝑢𝑟𝑠 − 𝑝𝑟𝑒𝑣𝑒𝑛𝑡𝑖𝑣𝑒 𝑚𝑎𝑖𝑛𝑡𝑒𝑛𝑎𝑛𝑐𝑒 5840 − 180 = = 56600 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 ℎ𝑜𝑢𝑟𝑠 𝑡ℎ𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑛𝑒𝑒𝑑𝑠 𝑝𝑒𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 0.3. whereas.3 Efficiency (%) 97.3 55100 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = = 97. we define capacity as the maximum amount of work that an organization is capable of completing in a given period of time. Design Capacity 58400 Effective Capacity 56600 Actual Capacity 55100 Utilization (%) 94.1 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 55100 = = 94.3% 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 56600 20 .

breakage. actual capacity. D – Production demand per time unit C – Fixed and variable costs associated to the machine/resource. effective capacity. and other disruptions.the machine or resource process time that includes the actual process time. setups. 21 . utilization and efficiency which have been summarized in the following table. For each machine we have carried out the same process using the above formulas and calculated the design capacity. 2) Machine requirements Number of machines and capacity requirement: The Machine requirement will be calculated as follows: Te . Because of this reason our system runs smoothly enough to produce a high efficiency and rate of utilization.From the table we see that the Utilization rate and Efficiency are both very high. this is due to the fact that in an air conditioning production system majority machines are either hydraulically operated or are molding machines and hence for duration of one year they do not require high preventive maintenance times or frequent breakdowns.

that is due to the fact that in an air conditioning production plant most machines are hydraulically operated as mentioned above in this report as well. therefore. during the production time span of one year very less breakdowns are encountered which keeps the machine utilization and efficiency above 95%. The machine requirement table also indicates that we have used the right amount of machines in our production system and therefore achieve quite realistic results.So the Machines Will be M > Te X D In the table below we have calculated our machine requirement considering realistic data from our extend model and have achieved the following results summarized in the table below. By taking a look at the results of the above two tables we conclude that both the efficiency and utilization of our machines are high. 22 . In the next step of capacity planning we calculate the Takt Time for our production system.

e. [minutes of work / unit produced] Ta= Net time available to work. e.3) Takt Time: Takt Time is determined by the following formula T= 𝑇𝑎 𝑇𝑑 Here.2. [units required / day] For our production system. T= Takt time.1 𝑇𝑑 156 3. Ta = 960 Mins/day Td = 156 Units/day T= 𝑇𝑎 960 = = 6. [minutes of work / day] Td = Time demand (customer demand).g. Historical Data Trend 60 50 Production Volume 40 30 20 10 0 2010 2009 2008 2007 2006 2005 Historical Data Trend 1 23 .g. e.g.

from October till March the sales were relatively less as compared to that in the summers. June and July. Another interesting fact that can be seen from the above data is that year to year the sales increase more and more. It can be clearly seen that the sales of the units were very high during the months of May.e. The concept of trend comes from the fact that over the years the demand of air conditioners are increasing more and more compared to the previous years as the population is increasing rapidly and ongoing constructions are in progress which causes the demand of air conditioners to increase more as the years progress. which manufactures its air conditioners in Pakistan. The graph drawn above shows a clear trend in its pattern. Since the demand of an air conditioner increases during the summer season therefore it is categorized as a seasonal time series model. June and July the weather is extremely hot and hence the demand of air conditioners significantly increases in summers. This is due to the fact that during May. an Air Conditioner has a Seasonal plus Trend characteristic. This can be explained by the fact that since the population is increasing and constructions are ongoing therefore the demand and hence the sales of the air conditioners are increasing as the years progress. This is due to the fact that in winters since the use of air conditioners is not required therefore the sales drop. Our Forecasting From the given data that we have presented above we can conclude that our product i.The table and graph show the sales of split type air conditioner for a span of 5 years from 2005 to 2010. From the above data we can conclude that over a span of 5 years an average of 64914 unit were produced. The data given above shows the sales of the air conditioner in Pakistan during 2005 to 2010. This can be shown by the following graph 14 12 10 8 6 4 2 0 Jan/04 May/05 Oct/06 Time Feb/08 Jul/09 Nov/10 Apr/12 Production Volume Thousands Historical Data Trend 2 3. 24 .1. The data is realistic and taken from a German affiliated company PEL.2. whereas.

Exponential Smoothing (Halt Winters Method) or Triple Exponential Smoothing 1. 3. To do this we have used 4 different forecasting methods and compared them to one another.2. Simple Moving Average 3.In our next task using the historical data presented above we forecast the production of air conditioners for the year 2011.2. The results which we achieved from this method along with the graph are shown below. But since we follow a seasonal pattern along with a trend the naïve forecast method cannot be applied to our system and hence we would not consider the results produced by this method suitable for forecasting the demand for 2011. Forecasting Methods Following are the 4 forecasting methods that we have used for our model 1. Naïve Forecast 2. Naïve Forecast: The first method that we tried for forecasting was a relatively simple method known as the naïve forecast. According to the naïve forecast method the forecasted value of our air conditioners in 2011 would be equal to the demand of 2010. The naïve forecast method is a time series method in which the forecast for the next period equals the demand for the current period. Production Volume 14000 12000 10000 8000 6000 4000 2000 0 Jan/04 May/05 Oct/06 Feb/08 Time Jul/09 Nov/10 Apr/12 Aug/13 Naive Forecast 25 . Weighted Moving Average 4.

𝐹𝑡 The error in forecast is then calculated using Where. It’s a time series method used to estimate the average of a demand time series by averaging the demand for the n most recent time periods. The following formula was used to calculate the forecasted value 𝐹𝑡+1 = 𝑠𝑢𝑚 𝑜𝑓 𝑙𝑎𝑠𝑡 𝑛 𝑑𝑒𝑚𝑎𝑛𝑑𝑠 𝐷𝑡 + 𝐷𝑡−1 + ⋯ … . a graph for the simple moving average method is also drawn. The table below indicates the detailed results which we obtained. 2. 𝐸𝑡 = Forecast error for period t 𝐹𝑡 = Forecast for period t 𝐷𝑡 = Actual demand in period t Using the historical data presented above in this report along with the mentioned formulas of simple moving average we calculated our forecasted value for 2011. Simple Moving Average: The 2nd forecasting method used is the simple moving average method. 𝐷𝑡 = Actual demand in period t n = Total number of periods in the average 𝐹𝑡+1 = Forecast for period t+1 𝐸𝑡 = 𝐷𝑡 . To show the behavior of the data. 26 . 𝐷𝑡−𝑛+1 = 𝑛 𝑛 Where.From the data and graph it is clearly seen that the forecast of 2011 is exactly the same as 2010 and no trend has been followed. Hence in our case the naïve forecast method is not an ideal method.

In this method each historical demand in the average can have its own weight. This method does not follow the trend line as seen. The forecasted error for this method has still been calculated and displayed in the following table Forecast for 2011 Demand for 2010 Forecast for 2010 Error in forecasting 3. 64914. the simple moving average method is not suitable and therefore must be avoided for such data sets. the sum of the weights equal to 1. This type of method can be used when the demand has no pronounced trend or seasonal influences. The results of this method are shown in the table below. we applied this method on our historical data.17 97540 58389 39151 For better illustration of what we achieve. 27 . Similar to the simple moving average method. Weighted Moving Average: The 3rd time series method which we applied to our data is the weighted moving average method.14000 12000 10000 Production Volume 8000 6000 4000 2000 0 Jan/04 May/05 Oct/06 Feb/08 Time Jul/09 Nov/10 Apr/12 Aug/13 From the above graph it can be clearly seen that. a graph has been plotted using the above data. for a seasonal plus trend characteristic type data.

When the data exhibits either an increasing or decreasing trend over time. Therefore we can say that for a seasonal plus trend type data the weighted moving average method is not particularly suited. One advantage of this method is that it allows emphasizing recent demands over earlier demands.14000 12000 Production Volume 10000 8000 6000 4000 2000 0 Jan/04 May/05 Oct/06 Feb/08 Time Jul/09 Nov/10 Apr/12 Aug/13 By taking a look at the graph we conclude that the weighted moving average method produced better results for our case as compared to the simple moving average method but still it does not produce what is required by a seasonal plus trend characteristic. The weighted moving average forecast lags behind demand because it merely averages past demands. This lag is noticeable because of the presence of a trend. Simple exponential smoothing models work best with data where there are no trend or seasonality components to the data. However. Exponential Smoothing (Halt Winters Method) or Triple Exponential Smoothing: The 4rth and final forecasting method that we have used for our system is the Halt Winters Method. neither of these exponential smoothing models addresses any seasonality in the data therefore. Triple exponential smoothing also known as the Winters method is a refinement of the popular double exponential smoothing model but adds another component which takes into account any seasonality or periodicity in the data. 28 . we used the Triple Exponential Smoothing method. 4. It is also known as triple exponential smoothing and is considered a part of Exponential smoothing. simple exponential smoothing forecasts tend to lag behind observations. The exponential smoothing method is a sophisticated weighted moving average method that calculates the average of a time series by giving recent demands more weights than earlier demands. Double exponential smoothing is designed to address this type of data series by taking into account any trend in the data.

with a value between 0 and 1 c) Smoothing of the seasonal factor: 𝑆𝑡 = 𝛾( 𝑋𝑡 ) + (1 − 𝛾)𝑆𝑡−𝑐 𝐴𝑡 Where. we achieve the following forecasted values for our system which is shown below along with its graph. 29 𝐹𝑡 = forecasted value at time t . 𝑆𝑡 = seasonal index factor 𝑋𝑡 = observed value at time t 𝛾 = smoothing parameter for the seasonality. 𝐴𝑡 = exponentially smoothed average of the series in period t 𝑇𝑡−1 = Trend estimate last period 𝛼 = smoothing parameter for the average. After using the above formulas on our historical data.The following formulas are used in the Triple exponential smoothing method 𝐴𝑡 = 𝛼𝐷𝑡 + (1 − 𝛼)(𝐴𝑡−1 + 𝑇𝑡−1 ) a) Overall Smoothing: Where. with a value between 0 and 1 b) Smoothing of the trend factor: 𝑇𝑡 = 𝛽(𝐴𝑡 − 𝐴𝑡−1 ) + (1 − 𝛽)𝑇𝑡−1 Where. 𝑇𝑡 = exponentially smoothed average of the trend in period t 𝐴𝑡 = exponentially smoothed average of the series in period t 𝑇𝑡−1 = Trend estimate last period 𝐴𝑡−1 = Average 𝛽 = smoothing parameter for the trend. with a value between 0 and 1 c = the number of periods in the seasonal pattern The forecast for the next period is then calculated using 𝐹𝑡 = (𝐴𝑡 + 𝑇𝑡 )𝑆𝑡 Where.

6.5.7 alpha 0. 0. We used the values of alpha 0.9 aplha 0.smoothing parameters α β γ 0. 0.4 alpha 0.7.5 - The forecasted data in the form of a plot are shown below 25000 Production Volume 20000 15000 10000 5000 0 Jan/04 May/05 Oct/06 Feb/08 Time Jul/09 Nov/10 Apr/12 Aug/13 From the graph it can be clearly seen that while using the triple exponential smoothing method our forecasted value for 2011 follows the same trend pattern that has been adopted over the recent years and hence we can conclude that the Halt Winters methods is the ideal method to use for a seasonal data which follows a trend.5 units for the year 2011. Using this method we have forecasted a demand of 115062.4. 0.6 alpha 0. The following graph shows the effect the smoothing parameters have.9 and a slight difference can be visible on the above graph.6 0.4 May/05 Oct/06 Feb/08 Jul/09 Nov/10 Apr/12 Aug/13 30 . 0. 25000 20000 15000 10000 5000 0 Jan/04 alpha 0.5 alpha 0.

in advance of 2 to 18 months. Now our main concern is to plan according to forecast and capacity to remove backlog and decrease the amount of inventory.((F41+F46+F42+F43)-F39))) Case 2: Out sourcing and zero backlog.3.5 0.6 =ABS(MIN(0.3 0. We did this by increasing the number of shifts of production and Out sourcing the manufacturing to daughter or privet producer. in initial months when demand is less than production. so that the total cost of operations of the organization is kept to the minimum over that period. 31 . Aggregate Planning Aggregate planning is an operational activity that does an aggregate plan for the production process.3. To get zero backlog and minimum inventory.9 3. Cost (Krones) Production cost Regular time Over Time Subcontract Inventory Back orders All values are multiple of 1000 2. But this method causes backlog and which in turn increases customer dissatisfaction and total cost. to give an idea to management as to what quantity of materials and other resources are to be procured and when. In this we evenly divided the entire annual forecast into 12 months. the extra parts go into inventory to be used in peak months to compensate for high demand. Case 1: Even Production with no out sourcing. The aggregate planning for our system is given below.5 2. we used EXCEL SOLVER.

In our case we have made a Bill of material along with the Product structure tree for our air conditioning system. 32 . sub-components.4. We have two product structure trees as our outdoor air conditioning unit and indoor air conditioning unit are both manufactured and packaged separately. intermediate assemblies. parts and the quantities of each needed to manufacture an end product. sub-assemblies. The Product structure tree of our air conditioning system is shown below. components. Bill of Materials and Product Structure Tree A bill of materials (BOM) is a list of the raw materials. A product structure tree is a visual depiction of the requirements in a bill of materials where all components are listed by levels.3.

Air conditioner Outdoor Unit Product Structure Tree Level 0 Level 1 Level 2 Level 3 Level 4 Casing CasCon Assembly Compressor Pressure Switch Fan Outdoor Unit Motor Assembly Motor Referigerant Solenoid Valve Valves Expansion Valve Thermostat Pakaging Condenser Paint Bent Tubes Aluminium Fins Plastic Aluminum Sheets Copper Tubes Aluminium Strips 33 .

Lvl ID Description 1 0 OU0001 Outdoor Unit 2 3 4 5 6 7 8 9 10 11 12 1 2 2 3 3 3 4 4 4 1 1 CC0001 CA0001 CN0001 PA0001 BT0001 AF0001 AS0001 CT0001 AS0001 CO0001 PS0001 Specification Supplier Assembled ASTS Sub CasCon Assembly Assembly Casing Condenser Paint 0. 1 1 1 1 1 1 1 1 1 1 1 1 34 .5 Berger Bent Tubes 200 cm One star Aluminum Fins 150 cm One star Aluminum Sheets 200 sq. cm One star Copper Tubes 200 cm One star Aluminum Strips 150 cm One star Compressor Kiloskar Pressure Switch Kiloskar Each Pcs Pcs Pcs Pcs Liters Pcs Pcs Pcs Pcs Pcs Pcs Pcs Qty/Pcs.Air conditioner Indoor Unit Product Structure Tree Level 0 Level 1 Level 2 Level 3 Level 4 Casing CasEvap Assembly Blower Pressure Switch Plastic Grill Indoor Unit Air Filter Solenoid Valve Valves Drainage Pipe Remote Control Expansion Valve Evaporator Paint Bent Tubes Aluminium Fins Aluminum Sheets Copper Tubes Aluminium Strips No.

5 150 cm 150 cm 200 cm 150 cm 150 cm 230 Volts 200 800 m - - Pcs 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - Full tech Pcs Shenzhen Power Motor Pcs Rich forth Pcs Camec Bars Vstar Pcs Vstar Pcs Vstar Pcs Kiloskar Pcs Golden Star Meters Golden Star Pcs Golden Star Pcs Golden Star Pcs TPak Pcs ASTS Pcs Berger One star One star One star One star One star Fulltech Kiloskar Rich forth One star Vstar Vstar Vstar ADS Universal Electronics Golden Star Golden Star Golden Star Golden Star Pcs Pcs Pcs Liters Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Pcs Meters Pcs Meters Pcs Pcs Pcs 35 .13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 45 46 47 48 49 1 2 2 3 1 1 2 2 1 1 1 1 1 1 0 1 2 2 3 3 3 4 4 4 1 1 2 3 3 1 2 2 1 1 1 1 1 1 M0001 FA0001 MO0001 PL0001 Rf0001 V0001 SV0001 EV0001 TH0001 W0001 R0001 N0001 B0001 PK0001 IU0001 Motor Assembly Fan Motor Plastic Refrigerant Valves Solenoid Valve Expansion Valve Thermostat Wiring Rivets Nuts Bolts Packaging Indoor Unit CasEvap CE0001 Assembly CA0002 Casing EV0001 Evaporator PA0002 Paint BT0002 Bent Tubes AF0002 Aluminum Fins AS0002 Aluminum Sheets CT0002 Copper Tubes AS0002 Aluminum Strips BW0001 Blower PS0002 Pressure Switch G0001 Grill PL0002 Plastic AF0001 Air Filter V0002 Valves SV0002 Solenoid Valve EV0002 Expansion Valve DR0001 Drainage Pipe RC0001 Remote Control W0002 Wiring R0002 Rivets N0002 Nuts B0002 Bolts Sub Assembly 27 cm dia 230 Volts 5 800 m Assembled Sub Assembly 0.

Master Production Schedule A master production schedule (MPS) is a plan for production. With the use bill of material we will get the part level and with MPS we will plan the receipt of individual parts to make sub-assemblies and then final product. The MPS quantity is selected to satisfy the inventory so its level must remain above zero to avoid backlog and delay. staffing. 36 . MPS accuracy and viability dramatically affect profitability.3. and management the information to plan and control manufacturing. The time bucket is taken as one week. An effective MPS ultimately will: • • • • Give production. etc. planning. inventory.5. On hand= 12290 Forecast Orders projected inventory MPS Quantity April 1 3081 2700 6128 0 2 3081 2500 3047 0 3 3081 3150 2897 3000 4 3081 3200 2697 3000 1 3744 2600 1953 3000 2 May 3 3744 465 3000 4 3744 3850 615 4000 1 4830 3850 285 4500 2 June 3 4830 3500 625 5000 4 4830 795 5000 1 4275 4200 1020 4500 2 July 3 4275 4400 280 4000 4 4275 3800 5 4000 3744 2950 1209 3000 4830 455 5000 4275 4340 680 4000 MRP: Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes An MRP system is intended to simultaneously meet three objectives: • • • Ensure materials are available for production and products are available for delivery to customers. and other resources in order to optimize production. Plan manufacturing activities. Maintain the lowest possible level of inventory. delivery schedules and purchasing activities. purchasing. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded. And on hand inventory from last month is 12290 units. Tie overall business planning and forecasting to detail operations. This plan quantifies significant processes. Enable marketing to make legitimate delivery commitments to warehouses and customers Increase the efficiency and accuracy of a company's manufacturing Given Below is our MPS table for next four months. parts. A master production schedule may be necessary for organizations to synchronize their operations and become more efficient.

MRP for next four months is given below. Rather than ordering for each receipt.With the use of excel we have developed MRP for every part required for the final receipt of product at different points on timeline. for small parts we can order a batch requirement of two receipts and store in inventory. We have used SMART DRAW to produce a time line that contains the material planned releases and receipts to provide visual demonstration of first order. 37 . There are many software tools available for assisting MRP. For parts in level 4. 5 weeks from final planned product receipt. They provide different solutions to make understanding easy. the planned release time goes back to 4.

receiving costs etc • The holding cost – the storing and handling cost. AHC.3. There are three cost components in ordering process • The purchase cost of the material. and compares it with different order size to get AOC and AHC for every product. (often in unit cost) • The ordering cost . 𝐴𝑛𝑛𝑢𝑎𝑙 𝑜𝑟𝑑𝑒𝑟𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 (𝐴𝑂𝐶) = 𝐴𝑛𝑛𝑢𝑎𝑙 𝐻𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 (𝐴𝐻𝐶) = 𝑂𝑟𝑑𝑒𝑟 𝑆𝑖𝑧𝑒 (𝑄) × 𝐴𝑛𝑛𝑢𝑎𝑙 ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 (𝐻) 2 𝑄 = � 2𝐷𝑆 𝐻 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 (𝐷) × 𝑂𝑟𝑑𝑒𝑟𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑜𝑟𝑑𝑒𝑟 (𝑆) 𝑂𝑟𝑑𝑒𝑟 𝑆𝑖𝑧𝑒 (𝑄) To get the optimum order size. In our model we have selected five annual demands.related to order preparation. 38 .6. Economic order quantity (EOQ) Economic order quantity is the level of inventory that minimizes the total inventory holding costs and ordering costs. In order to decrease our cost we determine the optimum order size that can balance inventory holding cost and re-ordering cost. It is one of the oldest classical production scheduling models. we equate AOC vs. which reveals the following result. communication.

39 .

AHC 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 0 4500 4000 3500 3000 2500 2000 1500 1000 500 0 0 2000 4000 6000 8000 10000 12000 AOC 1 AOC 2 AOC 3 AOC 4 AOC 5 2000 4000 6000 8000 10000 12000 AHC Because our demand is much more than the EOQ.7. And we will stick to our MRP schedule. This first part follows a kind of forecast-based push-strategy whereas the second part is kind of customer-order driven pullstrategy. so this method is not feasible for our model at the moment for any part. 40 .Customer order decoupling point The CODP defines a point of time when an order of anonymous-stock production becomes a customer order. Physically the decoupling point defines the last stock where parts or assemblies are stored without a certain reference to an order. “assemble to order” and “engineer to order” there is a customerindependent production of parts or subassemblies to stock. “make to order”. Based on the principles of “make to stock”. CODP . Two logistic control loops meet here. 3.

g.” The following graphic shows possible points in the production process including their designation. Selection of decoupling points is a strategic decision that determines customer lead times and inventory investment.The APICS dictionary defines the CODP as follows: “The locations in the product structure or distribution network where inventory is placed to create independence between processes or entities. The later the CODP is set within the production process. In order to make a good choice for the CODP placement for our production of air conditioners we are presenting three possible solutions. because there is usually a stable demand for Cheese Burgers. Dell is a good example for a company that has its CODP set at a more early stage in the production process. the more inventory has to be kept to be able to offer the whole product variety. we can reduce our whole inventory by waiting with the assemblies until we have an actual customer order. life cycle and other reasons that could lead to demand fluctuation. Solution 1: CODP after final assembly If we had less variety in our production program. This results in a very high responsiveness and is very useful if demand is stable and predictable. 41 . McDonalds will make Veggie Burgers to order but always have a stock of finished Cheese Burgers. As we deal with products from a product family consisting of some similar parts. It is therefor necessary to evaluate factors such as product popularity. e. The decision about which strategic point to chose results in a trade-off between increased lead times/lost opportunities and increased inventory/risk obsolescence. which are depicted in the next pictures. it would be a very reasonable decision to assemble the components and store the finished products. Many companies prefer this type of setting the CODP with their more popular products. PCs and Laptops are assembled according to customer orders resulting in high flexibility and lower inventories.

The amount of parts has to be determined before manufacturing their components and by not assembling them afterwards response time would increase without any gain. 42 .Solution 2: CODP before assembly one Placing the CODP before the first assembly is the least reasonable alternative. By waiting with the assembly of the outdoor and indoor unit we do not change anything regarding overall inventories as the parts need to be assembled to the units regardless what model is to be produced.

As a kind of Just-in-time method the downstream operation takes items from the upstream just in the time and in the number where it is currently a need. one can use KanBan: The principle of the Kanban system is simple. 3. Planning is based on sales and order forecasts. Response time does not change significantly but the inventory is kept lower then before. When an order for a specific model arrives the second assembly can be initiated and due to its lower complexity and shorter assembly time. To get over this. Furthermore there is a high probability of bad planning. the costumer order decoupling point should be placed there to ensure the meet of customer needs in case of demand variations. the order can be fulfilled in a reasonable time. that the individualization of the four variants start at the assembly of the indoor and outdoor units. KanBan KanBan differs in essential elements of the commonly used central production planning and control. An aggregated demand for the subparts is much easier to forecast and demand fluctuations between different models can be met. With the aim of high capacity utilization there are often high batch sizes and long lead times.Solution 3: CODP before Subassembly two In consideration of the fact.e.8. in contrast to the traditional method where material is passed on to subsequent operations. In cause of complex interactions between the elements of the PPS there is mostly a high coordination effort and a lack of flexibility in this so called “push” system. the transfer in the opposite direction. In the centrally organized production planning and control all tasks are performed – by name – by central agencies. which was created in a Taylorist oriented environment. If material is needed (i. The system is to simplify communication by unique labels with information about what is needed and in which quantity – the so called KanBan. because a stock falls below minimum) – and only then – 43 . because planning and doing units are not the same. what not implicates that the implementation is easy as well: KanBan is a system that performs.

Build a flow production The production program must be placed in uniform flow.the upstream process is asked to provide new material. Reduction and harmonization of transport cycles The reduction of inventory requires increased transportation effort. 2. To avoid a lack of material at the sinks the transportation of the material has to be guaranteed. Only correct parts may be transported. 3. We will have a look. when a KanBan is coming up. 4. we have to implement a planning unit at the last stage of the production. Mostly. Reducing batch sizes In order to achieve just-in-time production the conventional optimization of lot sizes must be waived. especially the principle that there should be manufacturing only in the case. We have only a small variety in the products. Smoothed production Because KanBan systems take part on several stages of production. This would lead to stocks (and furthermore waste). Thus. Within our air conditioner production line we meet this condition. Because there is now no optimized transport flow in use. No overproduction should be made. In case of our production line. Strict rules apply to the production. the conventional time-based management methods are replaced by a demand-oriented control – a pull system. Before implementing a KanBan system one has to identify whether the specific conditions for the use of KanBan are met. This asking is represented by using a Kanban (card. If there is no intervene the KanBan system is a self-controlled cycle system. a new effective system requires a large amount of changes within the company. Any unforeseen change would be apllied to the upstream stages and lead to stress. avoiding large fluctuations and the detailed pilling of production on the last stage is extremely important. this has to be implemented first in our production line. In our production we can easily adopt this condition. whether our production is able to use KanBan or which changes have to be done to meet the requirements: 1. paper). Takeda lists seven essential conditions that must be met. 44 . before using KanBan. As one can see out of the model. the production is strictly timed. which leads to high standardization. That means the degree of standardization has to be increased and the production must be strictly timed. which is generally transported with the goods with each batch and is returned at the dawn of the lot to the new delivery.

Improve the KanBan 45 . 7. self control by labor worker and process controls has to be implemented to ensure the transportation of correct parts to the downstream unit. there is another important condition: the quality issue. Following roadmap gives an overview about upcoming tasks for implementation: a. materials and containers is possible. subassemblies in moveable pallets. whether they are able to work with us in this just-in-time environment. Because our solution involves the suppliers as well while working with KanBan we have to check the suppliers. Conduct data collection (necessary to characterize your production process) b. Calculate the KanBan Size (calculate out of current conditions) c. Start the KanBan f. The container should be as small as possible. special orders have to be handed as well. every consuming and producing unit as well as buffer stocks and all items need a unique name. seems to fit very well to the conditions of KanBan. While choosing a container one has to watch the needs of the next process. Consistent container management Containers perform several tasks in transportation. Thus a precise allocation of the cards. like we are doing in our model and changed it to the new conditions. Additionally to the seven steps of Takeda. A quality management system. The production of air conditioners. Smaller parts of our production are transported in containers. The variance of products is due to simplification in MRP not given anymore. consisting of automatic quality control. The determination of names and addresses is shown in the figure at the end of this chapter. The system must be kept as transparent and simple as possible in order to avoid mistakes. This has to be done by suitable sizing and standardizing of the KanBan System. which is not applying to our production. Currently we have just one quality control at the end of the line. Audit and maintain the KanBan g. Design the KanBan (questions to concider: How is material controlled? What are the visual signals? Who is responsible? What training will be required? What is the implementation schedule?) d. Continuous production By using KanBan a consistent utilization of the production units is reached. They ensure the damage-free transportation of the products and give the number and type of content. Determination of the addresses Since the material flow is controlled by cards. Train everyone e. Generally. A long-term relationship has to be established to ensure quality and quantity at the required time. For implementation of KanBan there are a lot of things to do. 6.5.

46 .

Instead of using 1 KanBan like calculated one should chose 2 KanBan in this situation. After implementation we are sure that we can reach the following advantages with using the KanBan System: • • • • • • adaptive potential for short-term changes in demand inventory reductions increase in volume efficiency transition of nested production systems to self-running loops increase in transparency of process relations increase in motivation of employees through responsibility in control loops 47 . Because the Compressors are just taken from the stock. there should be 2 KanBan as well.

Even with the use of computers. tedious task. Tools are used in all the cases – because scheduling always shows up as a mathematical complex optimization problem.3. we wanted to round off the picture of production planning by looking into scheduling as well. A current trend shows up. the better the production scheduling. Tools often provide graphical interfaces. resources and labors. Benefits of production scheduling show up as follows: • • • • • • • Process changeover reduction Inventory reduction. which can be easily used to improve real-time workloads. Scheduling Even though it was not part of the lecture. While manufacturing is aiming to minimize the production time and cost by schedule processes in time. Project scheduling is currently under great focus within the manufacturing planning research. Heavy algorithms are used here to solve the minimization/maximization problems. leveling Reduced scheduling effort (rescheduling) Increased production efficiency Labor load leveling Accurate delivery date quotes Real time information 48 . that the conventional shop scheduling turns into project scheduling while associating every process as an own project.8. it is a time consuming. production scheduling’s purpose is to maximize the efficiency of the operation and to reduce costs. Scheduling is a very powerful tool in manufacturing and engineering that has a major impact on the productivity of a process. An easy rule applies for scheduling: the better the information and the model.

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ac.edu (presentation) http://en.in/~praj/acads/seminar/04329008_ExponentialSmoothing.pdf http://vbautomation.duke.statsoft. Ritzman and Malhotra Forecasting: Operation Management 8e Process and value chains by Krajewski.com/blog/bid/48679/Exponential-smoothing-and-Sales-forecasting-software http://www.org/wiki/Aggregate_planning 50 .it. Ritzman and Malhotra http://www.iitb.wikipedia.mxisoft.htm Aggregate planning: Aggregate Planning by Utdallas.110mb. References Data Mining: http://www. Ritzman and Malhotra Time series Forecasting using Holt-Winters Exponential Smoothing by Prajakta S.A1.com/textbook/time-series-analysis/#seasonal Operation Management 8e Process and value chains by Krajewski.edu/~rnau/411outbd.com/FORECASTING/exponential_smoothing_with_seasonality.com/textbook/time-series-analysis/#seasonal Operation Management 8e Process and value chains by Krajewski.statsoft. Kalekar. Kanwal Rekhi School of Information Technology holt-winters forecasting: some practical issues by Chatfield and Yar http://www.htm http://www.

cam.wikipedia. J.scribd.org/wiki/Order_fulfillment http://www. Cox.0.com/homework-help/Industrial+Management/Production+Planning+And+Control/master-production-schedule.html Chopra and Meindl: Supply Chain Management._p11.html http://www.transtutors. 1989 APICS International Conference Proceedings http://en.vnl.at/Entkopplungspunkt.eng.de/news-infocenter/logistik-lexikon/word/customer_order_decoupling_point.wikipedia.gr/pagesuk/technicalissues/management/production-management/production_managment_production_management.competence-site.217.com/doc/24340782/Master-Production-Scheduling CODP: http://www. and Susan Neff.ac.de/pps-systeme/Customer-order-decoupling-point-CODP http://thalys. Terry.aspx http://exceltemplates.htm James F.. and S. MRP: Integrating Material Requirements Planning and Modern Business http://www.uk/dstools/process/mrp. Haythornthwaite. “The Master Schedule.MPS: http://www.org/wiki/Master_production_schedule MRP: Bruggeman. CFPIM. J.ssi-schaefer. Effective Placement of Manufacturing Inventories.ifm.net/company-activities/master-production-schedule/ http://en. Pearson 2007 http://www.” Lunn.html 51 .

de/kanban. p. p. in Engineering Managment International.at (Verein Netzwerk Logistic) competence-site.made simple. Gross and Mcinnis. 1995.org vln.htm VORTEILE http://www.de 52 . American Managment Association 2003 USA Hussein M.it-production. Issue 4.com/index.the japanese just in time production system.php VORTEILE und Einsatzgebiete Kanban .net Glossary: Lecture Notes Wikipedia. in: Engineering costs and production economics.lepros.org/wiki/scheduling_(production_processes) giraffeproductionssystems.de/hybrides-kanban. 305-319 Scheduling: en. Reda (1987): A review of kanban . Isue 9. 143-150 Horst Wildemann (1995): Implementation strategies for the integration of japanese Kanban principles in German companies.php?seite=einzel_artikel_ansicht&id=20220 FUNKTIONSWEISE http://www.wikipedia.kanbanconsult. 1987.KanBan: http://www.

All group members were present.A2. Meeting held around 2 pm in KTH Library Forecasting Aggregate Planning MPS and MRP Kanban 18.11 Group discussion on aggregate planning on how to implement it to our system. All group members were present and rough calculations were made 22. 53 .11 Brief discussion on forecasting again and the Halt Winters method was analyzed in detail after reading the literature the previous night.11 2 hour group discussion on the forecasting methods and research on different methods which could suit our model.02. Appendix Capacity Planning 2 hour discussion on capacity planning and extend model.02.02. 24. Brain storming was carried out and literature was searched for reading. Meeting took place at KTH Library at 3 pm.

Almost 3 hr group discussion 01. Had a detailed study of both in the KTH Library.25.03. capacity planning successfully completed. End result necessary feedbacks.02.03.02. Meeting took place in M block/ Literature collected to precede MPS and MRP.11 Compilation of Capacity planning into report was Compilation of forecasting carried out here we worked in carried out by the other two group of two.11 54 . Two people group members. 02. In the end the worked on writing capacity parts were interchanged planning in report format between the groups to have a whereas the other two worked look and provide with on forecasting.11 28.11 Aggregate planning finalized after reading the literature over the weekend and all group members sat down and gave their input as to how it should be preceded. All members were present.

11 07. All members present at KTH Lib. 05. The complete report finalized. All group members present. The tables and results for formulated on excel but yet to be placed in the final report. Work carried out at KTH Library.03. Put into report format.03.04.11 09. All group members were present Aggregate planning finalized and put into report. MPS and MRP Finalized.11 Another group meeting on aggregate planning.03.11 10.11 06.03.03. Literature review on kanban started at 3 pm in M block. All members were present.11 55 . MPS and MRP Tables developed on excel. Kanban model built and discussed with a few complications but still solved. Amins input was taken through Skype Kanban put into report in its final format.03.

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