VALUE CHAIN OPERATION

What Is a Value Chain?

A value chain is a set of activities that an organization carries out to create value for its
customers. A value chain is a combination of the systems a company or organization
uses to make money. It is made up of various subsystems that are used to create
products or services. This includes the process from start to finish.
https://www.investopedia.com/ask/answers/050115/what-are-primary-activities-
michael-porters-value-chain.asp

Michael Porter, in his 1985 book “Competitive Advantage” introduced a generic value
chain model that comprises a sequence of activities found to be common to a wide
range of firms. Porter's Value Chain focuses on systems, and how inputs are changed
into the outputs purchased by consumers. Using this viewpoint, Porter described a
chain of activities common to all businesses, and he divided them into primary and
support activities.

The idea of the value chain is based on the process view of organizations, the idea of
seeing a manufacturing (or service) organization as a system, made up of subsystems
each with inputs, transformation processes and outputs. Inputs, transformation
processes, and outputs involve the acquisition and consumption of resources - money,
labor, materials, equipment, buildings, land, administration and management. How
value chain activities are carried out determines costs and affects profits.

According to Porter (1985), the primary activities are:

1. Inbound Logistics - These are all the processes related to receiving,

storing, and distributing inputs internally. Your supplier relationships are a
key factor in creating value here.
2. Operations - are all the activities required to transform inputs into outputs
(products and services) that are sold to customers. Here, your operational
systems create value.

INPUT:

o Inputs are resources used to produced output

o Input is something that is transformed, consumed, used or
processed

Ex. natural resources, raw materials, human resources, capital

OUTPUT:
 o The result (product/service) produced by the process if input
o Output is the tangible product or service that is delivered at
the end of the process

Ex. products or services

SOMETIMES THE OUTPUT OF ONE PROCESS IS USED AS INPUT FOR THE

NEXT

3. Outbound Logistics - These activities deliver your product or service to

your customer. These are things like collection, storage, and distribution
systems, and they may be internal or external to your organization. Include
all the activities required to collect, store, and distribute the output.
4. Marketing and Sales - activities inform buyers about products and
services, induce buyers to purchase them, and facilitate their purchase.
These are the processes you use to persuade clients to purchase from you
instead of your competitors. The benefits you offer, and how well you
communicate them, are sources of value here.
5. Service - includes all the activities required to keep the product or service
working effectively for the buyer after it is sold and delivered. These are
the activities related to maintaining the value of your product or service to
your customers, once it's been purchased.

Secondary activities are:

1. Procurement/Purchasing - is the acquisition of inputs, or resources, for

the firm. This is what the organization does to get the resources it needs to
operate. This includes finding vendors and negotiating best prices.
2. Human Resource management - This is how well a company recruits,
hires, trains, motivates, rewards, and retains its workers. People are a
significant source of value, so businesses can create a clear advantage with
good HR practices.
3. Technological Development - pertains to the equipment, hardware,
software, procedures and technical knowledge brought to bear in the firm's
transformation of inputs into outputs. These activities relate to managing
and processing information, as well as protecting a company's knowledge
base. Minimizing information technology costs, staying current with
technological advances, and maintaining technical excellence are sources of
value creation.
4. Infrastructure - serves the company's needs and ties its various parts
together, it consists of functions or departments such as accounting, legal,
finance, planning, public affairs, government relations, quality assurance
and general management. These are a company's support systems, and
the functions that allow it to maintain daily operations. Accounting, legal,
 administrative, and general management are examples of necessary
infrastructure that businesses can use to their advantage.

REFERENCES:

https://www.mindtools.com/pages/article/newSTR_66.htm

https://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/

Scheduling Decision
Scheduling is the process of arranging, controlling and optimizing work and workloads
in a production process. Production scheduling aims to maximize the efficiency of the
operation and reduce costs, and backward and forward scheduling are applied to
allocate plant and machinery resources, plan human resources, plan production
processes and purchase materials.
Scheduling objectives. The objective function measures the quality of the decisions to
be made. The objectives traditionally considered in scheduling problems are time
related, such as the total completion time or makespan, lateness, tardiness and
earliness. However, decisions in chemical industry are usually driven by profitability
criteria. Hence, it is necessary to adequately quantify economic criteria in order to reach
a high quality decision from an integrative perspective. Therefore, global metrics such
as profit, cost or profitability itself should be considered.
Scheduling decisions. The decisions involved in the scheduling function vary according
to the plant management needs and depend on the problem features. Anyways, such
decisions are highly connected to each other, and to other decision levels, for instance
to planning for demand issues or to control for actual processing times. In general,
decisions within the scheduling level can be broadly classified in four types:
•
Batching. It consists of deciding on the number and size of the lots of products
that are to be produced. Therefore, these decisions are directly related to the
mass balances and storage management, and so to the planning level.
•
Allocation. It involves the assignment along time of tasks to equipment units and
other plant resources, such as manpower, electricity and water, according to
their availability. Resources are usually finite and product specific, and they may
be reusable or not.
Sequencing. It determines the order in which batches of the different products
are to be produced in the different equipment units along the process plant.
 •
Timing. It concludes the initial and final times at which batches are to be
performed. Such decisions highly depend on the process features. Therefore,
according to existing intermediate storage policies and the relationship between
tasks, production timing may be differently performed inside the whole
production time horizon. A key point in batch scheduling consists of the time
representation, which depends on whether actions may take place at any time or
at some predefined time points. Since actual processing times depend on process
conditions, which may be influenced by external disturbances, actual timing
decisions may be highly changed from the initial estimation.
https://www.sciencedirect.com/topics/engineering/scheduling-decision

Scheduling Decisions: In Operations

Introduction
Scheduling is considered as the time sequence of activities. Scheduling is a sub phase
of planning, in which, once an alternative program of action is identified, a course can
be established and time sequenced. The Scheduling Decisions mainly consists of the
exercises of integrating time, resources and work elements in the most efficient manner
to achieve the specified objective functions. Scheduling Decisions are an important
function of Management which has a great role particularly in Manufacturing and
Service Industries. The Scheduling Decisions assist the Organizations to perform their
functions with the minimum utilization of resources (Lewis, 2007). The Scheduling
Decisions are used in different operations including hospital, university, movie making,
make-to-order factory, etc.
https://brainmass.com/business/human-resources-management/scheduling-decisions-
224574

Operations Scheduling
This involves the processes of assigning jobs or operations to the right machines and
labor resources.

To ensure that production is completed on time, the timing and utilization of available
resources are crucial. When properly executed, operations scheduling can increase your
company’s revenues and decrease the overall production time. 
While planning considers which resources and materials will be allocated for each job,
scheduling adds the timing component of the production schedule. It deals with
optimizing the sequence of operations on the allocated resources to ensure the most
efficient production schedule is created and executed. 

Objectives of Operations Scheduling

 Maximize Resource Utilization: One area that incurs high costs for a

manufacturing company is the poor utilization of all resources. This can be due
to a poor schedule that leaves machines idle for long periods of time.  

 Manufacturing Time Reduction: When a proper schedule is created, your

overall production time should be reduced. This is usually because all operations
required to make a product will be performed only when they are needed.
Therefore, the start to finish time will be shorter as you will have less time
between the various operations.

 Inventory Minimization: To elaborate on the last point, a shorter

manufacturing time usually means that you have less WIP inventory items
waiting on availability on a resource. In addition, if your production starts so that
it can be completed just before it needs to be shipped out, you will have less
inventory to hold on to. 

 Optimizing Efficiency of Labor: A great production schedule will be one that

minimizes the amounts of back and forth and changeovers/setup time on
machines. In addition, when workers know which item they are producing next
and where the material is coming from, they will be more efficient.

 Service Level Improvement: Having an efficient production schedule not only

benefits the workers on the shop floor but also the customer service employees.
By looking at the schedule, they will know when products will be completed and
they will be able to give a more accurate lead time. They will also be able to
notify customers in advance in the event that a disruption occurs which would
cause jobs products to be late.

 Increasing Profits and Output: Overall, having an efficient schedule will

increase the number of products that are capable of being produced. This is turn
 will decrease production costs, as all resources will be utilized optimally. The
overall result will be increased profits and increased on-time delivery.
Functions of Operations Scheduling

 Resource Allocation: The first part of scheduling operations is to allocate

resources to each job. This is different than assigning jobs to departments as not
every machine or labor resource is capable of producing each item. This will give
you a more realistic picture of the actual capacity you possess. 

 Sequence of Jobs: The next part is to determine the right sequence of jobs

that will be performed on each resource. A common technique used is grouping
jobs together as to minimize the amount of setup and changeover required. This
could be running jobs of similar color or materials one after the other to reduce
machine setup.

 Start and End Time of Job: When your operations are scheduled in the right
order, you will now have a specific start and end time. For the most accurate
schedule, you should consider the different machine run rates for various
products and various machines. Knowing when operations are supposed to start
and finish will help you notify customers of the status of their order.

 Maximum Utilization of Plant: Often, resources are not utilized to their full

capacity. This leaves many resources idle for long periods of time which can be
costly. One method to improve the overall schedule is to focus on the scheduling
of operations on resources that are bottlenecks or that cost a lot to run. This will
ensure that those resources are always processing items while upstream and
downstream operations are adjusted to limit the number of WIP items. 

 Information on Machines: Operations scheduling means that you have up-to-

date operations on machines and the products that are being produced. Shop
floor feedback on the status of operations offers additional visibility on the status
of orders.

 Shop Floor Control: Having optimized operation schedules ensures that

everyone knows what should be started and completed when. This gives
additional structure and control over the shop floor operations.
Overall, operations scheduling will allow your company to see an increase in the
number of on-time deliveries and allow you to maintain a competitive advantage in the
market. An Advanced Planning and Scheduling (APS) system like PlanetTogether can
help you save time in the creation of the most optimized production schedule to help
you reach your company’s goals. Manufacturing companies around the globe are
turning to APS softwares to have better visibility within their operations and improve
their production.

Advanced Planning and Scheduling (APS)

Advanced Planning and Scheduling Softwares have become a must for modern-day
manufacturing operations as customer demand for increased product assortment, fast
delivery, and downward cost pressures become prevalent. These systems help planners
save time while providing greater agility in updating ever-changing priorities, production
schedules, and inventory plans. APS Systems can be quickly integrated with an
ERP/MRP software to fill the gaps where these systems lack planning and scheduling
flexibility, accuracy, and efficiency.

With Planet Together you can:

 Create optimized schedules that balance production efficiency and delivery

performance

 Maximize throughput on bottleneck resources to increase revenue

 Synchronize supply with demand to reduce inventories

 Provide company-wide visibility to resource capacity

 Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take

your manufacturing operations to the next level of production efficiency by taking
advantage of the operational data you already possess in your ERP system. APS is a
step in the right direction of efficiency and lean manufacturing production
enhancement. Try out a free trial or demo!
Scheduling pertains to establishing both the timing and use of resources within an
organization. Under the operations function (both manufacturing and services),
scheduling relates to use of equipment and facilities, the scheduling of human activities,
and receipt of materials.

Read more: https://www.referenceforbusiness.com/management/Ob-Or/Operations-
Scheduling.html#ixzz78c6NvbES
https://www.referenceforbusiness.com/management/Ob-Or/Operations-Scheduling.html

Operations Scheduling
Scheduling pertains to establishing both the timing and use of resources within an
organization. Under the operations function (both manufacturing and services),
scheduling relates to use of equipment and facilities, the scheduling of human activities,
and receipt of materials.

While issues relating to facility location and plant and equipment acquisition are
considered long-term and aggregate planning is considered intermediate term,
operations scheduling is considered to be a short-term issue. As such, in the decision-
making hierarchy, scheduling is usually the final step in the transformation process
before the actual output (e.g., finished goods) is produced. Consequently, scheduling
decisions are made within the constraints established by these longer-term decisions.
Generally, scheduling objectives deals with tradeoffs among conflicting goals for
efficient utilization of labor and equipment, lead time, inventory levels, and processing
times.

There are two general approaches to scheduling: forward scheduling and backward
scheduling. As long as the concepts are applied properly, the choice of methods is not
significant. In fact, if process lead times (move, queue, and setup times) add to the job
lead time and process time is assumed to occur at the end of process time, then
forward scheduling and backward scheduling yield the same result. With forward
scheduling, the scheduler selects a planned order release date and schedules all
activities from this point forward in time.

With backward scheduling, the scheduler begins with a planned receipt date or due
date and moves backward in time, according to the required processing times, until he
or she reaches the point where the order will be released.
Of course there are variables to consider other than due dates or shipping dates. Other
factors that directly impact the scheduling process include: the types of jobs to be
processed and the different resources that can process each, process routings,
processing times, setup times, changeover times, resource availability, number of shifts,
downtime, and planned maintenance.

LOADING

Loading involves assigning jobs to work centers and to various machines in the work
centers. If a job can be processed on only one machine, no difficulty is presented.
However, if a job can be loaded on multiple work centers or machines, and there are
multiple jobs to process, the assignment process becomes more complicated. The
scheduler needs some way to assign jobs to the centers in such a way that processing
and setups are minimized along with idle time and throughput time.

Two approaches are used for loading work centers: infinite loading and finite loading.
With infinite loading, jobs are assigned to work centers without regard for capacity of
the work center. Priority rules are appropriate for use under the infinite loading
approach. Jobs are

loaded at work centers according to the chosen priority rule. This is known as vertical
loading.

Finite loading projects the actual start and stop times of each job at each work center.
Finite loading considers the capacity of each work center and compares the processing
time so that process time does not exceed capacity. With finite loading, the scheduler
loads the job that has the highest priority on all work centers it will require. Then the
job with the next highest priority is loaded on all required work centers, and so on. This
process is referred to as horizontal loading. The scheduler using finite loading can then
project the number of hours each work center will operate. A drawback of horizontal
loading is that jobs may be kept waiting at a work center, even though the work center
is idle. This happens when a higher priority job is expected to arrive shortly. The work
center is kept idle so that it will be ready to process the higher priority job as soon as it
arrives. With vertical loading the work center would be fully loaded. Of course, this
would mean that a higher priority job would then have to wait to be processed since
the work center was already busy. The scheduler will have to weigh the relative costs of
keeping higher priority jobs waiting, the cost of idle work centers, the number of jobs
and work centers, and the potential for disruptions, new jobs, and cancellations.

If the firm has limited capacity (e.g., already running three shifts), finite loading would
be appropriate since it reflects an upper limit on capacity. If infinite loading is used,
capacity may have to be increased through overtime, subcontracting, or expansion or
work may have to be shifted to other periods or machines.
SEQUENCING

Sequencing is concerned with determining the order in which jobs are processed. Not
only must the order be determined for processing jobs at work centers, but also for
work processed at individual work stations. When work centers are heavily loaded and
lengthy jobs are involved, the situation can become complicated. The order of
processing can be crucial when it comes to the cost of waiting to be processed and the
cost of idle time at work centers.

There are a number of priority rules or heuristics that can be used to select the order of
jobs waiting for processing. Some well-known ones are presented in a list adapted from
Vollmann, Berry, Whybark, and Jacobs:

 Random (R). Pick any job in the queue with equal probability. This rule is often
used as a benchmark for other rules.
 First come/first served (FC/FS). This rule is sometimes deemed to be fair since
jobs are processed in the order in which they arrive.
 Shortest processing time (SPT). The job with the shortest processing time
requirement goes first. This rule tends to reduce work-in-process inventory,
average throughput time, and average job lateness.
 Earliest due date (EDD). The job with the earliest due date goes first. This seems
to work well if the firm performance is judged by job lateness.
 Critical ratio (CR). To use this rule, one must calculate a priority index using the
formula (due date - now)/(lead time remaining). This rule is widely used in
practice.
 Least work remaining (LWR). An extension of SPT, this rule dictates that work be
scheduled according to the processing time remaining before the job is
considered to be complete. The less work remaining in a job, the earlier it is in
the production schedule.
 Fewest operations remaining (FOR). This rule is another variant of SPT; it
sequences jobs based on the number of successive operations remaining until
the job is considered complete. The fewer operations that remain, the earlier the
job is scheduled.
 Slack time (ST). This rule is a variant of EDD; it utilizes a variable known as
slack. Slack is computed by subtracting the sum of setup and processing times
from the time remaining until the job's due date. Jobs are run in order of the
smallest amount of slack.
 Slack time per operation (ST/O). This is a variant of ST. The slack time is divided
by the number of operations remaining until the job is complete with the
smallest values being scheduled first.
 Next queue (NQ). NQ is based on machine utilization. The idea is to consider
queues (waiting lines) at each of the succeeding work centers at which the jobs
will go. One then selects the job for processing that is going to the smallest
queue, measured either in hours or jobs.
  Least setup (LSU). This rule maximizes utilization. The process calls for
scheduling first the job that minimizes changeover time on a given machine.

These rules assume that setup time and setup cost is independent of the processing
sequence. However, this is not always the case. Jobs that require similar setups can
reduce setup times if sequenced back to back. In addition to this assumption, the
priority rules also assume that setup time and processing times are deterministic and
not variable, there will be no interruptions in processing, the set of jobs is known, no
new jobs arrive after processing begins, and no jobs are canceled. While little of this is
true in practice, it does make the scheduling problem manageable.

GANTT CHARTS

Gantt charts are named for Henry Gantt, a management pioneer of the early twentieth
century. He proposed the use of a visual aid for loading and scheduling. Appropriately,
this visual aid is known as a Gantt chart. This Gantt chart is used to organize and clarify
actual or intended use of resources within a time framework. Generally, time is
represented horizontally with scheduled resources listed vertically. Managers are able to
use the Gantt chart to make trial-and-error schedules to get some sense of the impact
of different arrangements.

There are a number of different types of Gantt charts, but the most common ones, and
the ones most appropriate to our discussion, are the load chart and schedule chart. A
load chart displays the loading and idle times for machines or departments; this shows
when certain jobs are scheduled to start and finish and where idle time can be
expected. This can help the scheduler redo loading assignments for better utilization of
the work centers. A schedule chart is used to monitor job progress. On this type of
Gantt chart, the vertical axis shows the orders or jobs in progress while the horizontal
axis represents time. A quick glance at the chart reveals which jobs are on schedule
and which jobs are on time.

Gantt charts are the most widely used scheduling tools. However, they do have some
limitations. The chart must be repeatedly updated to keep it current. Also, the chart
does not directly reveal costs of alternate loadings nor does it consider that processing
times may vary among work centers.

SCHEDULING SERVICE OPERATIONS

The scheduling of services often encounters problems not seen in manufacturing. Much
of this is due to the nature of service (i.e., the intangibility of services and the inability
to inventory or store services and the fact that demands for services are usually
random.) Random demand makes the scheduling of labor extremely difficult as seen in
restaurants, movie theaters, and amusement parks. Since customers do not like to wait,
labor must be scheduled so that customer wait is minimized. This sometimes requires
the use of queuing theory or waiting-line theory. Queuing theory uses estimate arrival
rates and service rates to calculate an optimum staffing plan. In addition, flexibility can
often be built into the service operation through the use of casual labor, on-call
employees, and cross-training.

Scheduling of services can also be complicated when it is necessary to coordinate and

schedule more than one resource. For example, when hospitals schedule surgery, not
only is the scheduling of surgeons involved but also the scheduling of operating room
facilities, support staff, and special equipment. Along with the scheduling of classes,
universities must also schedule faculty, classrooms, labs, audiovisual and computer
equipment, and students. To further complicate matters, cancellations are also common
and can add further disruption and confusion to the scheduling process.

Instead of scheduling labor, service firms frequently try to facilitate their service
operations by scheduling demand. This is done through the use of appointment systems
and reservations. This trend is particularly evident in service companies such as airlines
and hotels which have adopted the increased use of electronic reservations systems to
register demand, track cancellations and determine the supply of services. Advance
reservations systems enable companies to significantly reduce random demand,
customer wait times, and difficulties in scheduling of labor.

The increased use of electronic reservation systems by businesses has prompted

governments and regional bodies around the world to respond by reviewing regulations
that govern computerized reservations. In 2008 the Transport Committee of
the European Union Parliament offered its full support to proposals by the European
Union Commission to replace the old rules that govern Computerized Reservations
Systems with new ones. This move was geared towards modernizing regulations and
optimizing opportunities for air travel companies and agencies operating
within European Union member countries.

Therefore, it is important for managers to pursue technological options when seeking

remedies for different problems and difficulties that characterize operations scheduling.
In fact, the use of technological alternatives—including software applications and
electronic scheduling of services—reduce the levels of labor intensity of operations to
the advantage of the company.

Robert Bylett suggests that the use of operations checklist is an effective system for
ensuring that all the activities of a business organization are run according to planned
sequence and set limits. For example, an operations checklist in a restaurant business
facilitates the identification of daily activities, general activities, and special events of
the restaurant. Subsequently, it enables employees to execute assigned duties
according to the set guidelines, thereby eliminating probabilities of customer delays or
wastage of resources.

https://www.encyclopedia.com/management/encyclopedias-almanacs-transcripts-and-
maps/operations-scheduling
 Operations Scheduling and Workplace Planning
Introduction

Scheduling and workplace planning is the final step in operation planning and design.
Operation’s scheduling and workplace planning is implemented during transformation of
input to output. Scheduling deals with production of required quantity of product within
the required time frame. Workplace planning deals with allocation of resources with
priority to work job with first delivery date.

Operations Planning

Scheduling deals with both time allocations as well resource allocation for production of
required quantity. Operations’ planning is done as part of short term planning.

High level objective of operation’s planning is to decide the best way of allocation of
labor and equipment as to find balance between time and use of limited resources
within the organization.

In modern age of competition and global market importance is given to Just In Time
and the lean production concepts. This has led to importance of operation’s scheduling.
There are three important task performed by operations scheduling:

 Allocation of resources
 Workforce scheduling
 Production equipment scheduling

Operations’ planning ensures that proper workflow is established by ensuring allocation

of job on appropriate machines before the advent of production activities. Scheduling is
production timetable highlighting sequence of job, timing and quantity for allocation of
resources as to help an organization in cash flow planning. Therefore, there are three
main objectives of production scheduling:

 Due importance to delivery date and avoiding delays in completion

 Reducing time of job on machines
 Proper utilization of work centers

Operation scheduling is arrived at base on the following principles.

 Ensure continuous job schedule

 End to end completion of job
 Remove the bottleneck
 Ensure feedback as to make adjustment
 Skill set of workforce
 Enhancement of product and process
  Scheduling helps in capacity planning as to reduce bottlenecks.
 Scheduling helps in streamlining order production based on due date.
 Scheduling helps in sequencing of various job works.

Scheduling is done with two approaches, and they are as follows:

 Forward scheduling is type of scheduling where the planner considers order

received date as the starting point for forward planning of all the activities.
 Backward scheduling is type of scheduling where the planner considers the order
delivery date as the starting point and does backward planning of all activities.

https://www.managementstudyguide.com/operations-scheduling-and-workplace-
planning.htm

OPERATION SCHEDULING WITH EXAMPLES

Introduction
In manufacturing or production, operations are considered processes performed on
machines in order to obtain the desired output. In scheduling, work is assigned to
production units with specifications of times in a detailed way. This also includes
manufacturing sequence and continues till the final product is made and ready for
delivery. Scheduling refines processing times to complete all the jobs or tasks on time
so that the final product can be delivered to customers on time.

Operations in manufacturing or production face challenges related to keeping

production in a timely and efficient manner. Many organizations face this challenge due
to advancements in technology. Operations scheduling is one solution to such issues or
challenges. This includes processing assigned operations or tasks to the right machines
and the right labor resources.

So, to put it in simple words, operations scheduling is a process that prescribes the
timelines of execution of each operation in the manufacturing or production process. As
per Kimball and Kimball, Scheduling includes determining the time required for
performing each operation and also, the time needed to continue the whole series of
operations as prescribed.

It is crucial to utilize the available resources to ensure the completion of production on

time. If operations scheduling is executed properly, it may support in increasing the
revenue of the organization and decreasing the overall production time. While the
appropriate allocation of different resources and materials for each job comes under
planning, scheduling brings the timing element of the production schedule. It optimizes
the operation sequence on the allocated resources and thus, ensures the creation and
execution of the most efficient production schedule.

Objectives/ Purpose of Operations Scheduling

Scheduling is the planning of operations on a daily basis that specifies details related to
which job will be done by which work center, the starting and end of an operation or a
job, the equipment on which the operation should be done, and who will be responsible
for doing, the sequence of job operations on different machines or work centers.

Below are the main objectives or purpose of scheduling:

Maximizing Utilization of Resources
Poor or inadequate resource utilization results in high costs for a manufacturing
organization. The reason for this can be a poor schedule that is responsible for leaving
machines in an idle state for a longer duration.

Reduction of Manufacturing Time

It is possible to reduce the overall manufacturing or production time if a proper

schedule is made because it will be possible to perform various operations for product
development on a need basis. So, there will be a shorter start and finish time as the
time consumed between different operations will be less.

Minimizing Inventory

A shorter production time is related to less work-in-progress inventory items waiting on

resource availability. Moreover, if the starting of production is according to its
completion just before it is required to be shipped out, fewer inventories will be there to
hold on.

Labor Efficiency Optimization

An idle operations schedule is aimed at minimizing the setup time on machines. Also,
the efficiency of workers increases once they are aware of the items they are supposed
to produce in the next sequence and flow of material.

Improvement in Service Level

Both workers and other employees serving customers are benefitted from an efficient
operations schedule. By schedule details, it is possible to find out the duration of
completion of products and this facilitates employees to provide a more accurate lead
time to customers. Also, customers can be notified in advance if any disruption occurs
that may delay products.

Enhancing profits and Outcome

An efficient schedule helps in increasing the number of products that have the
capability to be produced. This results in reduced production costs because of the
optimum utilization of all available resources. This overall results in increasing profits
and on-time delivery.
Factors that Affect Scheduling

Through scheduling, the planning phase of production planning and control is finalized.
Below are the factors that create an impact on scheduling and are considered before
making a scheduling plan.

External Factors

These factors are those factors over which an organization’s management has no
control. These are enforced by the forces that are outside the organization.

These factors include the demand of the customer, Delivery dates of Customers, and
Inventories of Dealers and Retailers. These factors are elaborated below in detail:

Demand for Customer

The sales forecasting department estimates this demand. Scheduling depends on the
expected sales forecasting of particular products in the process of continuous
production.

Delivery Dates of Customer

In a manufacturing concern where there is a mass or continuous production with

demand at a seasonal level, the scheduling should be done to generate a balanced
production in the whole year by minimizing inventory stock with a constant production.
If the demand is seasonal and production is intermittent, then adjustments can be done
by providing delivery of consumer orders on delivery dates that are agreeable. 
Inventories of Dealers and Retailers
This situation occurs in the continuous production of standardized goods. Generally, the
stock is maintained at a certain level by dealers and retailers. The basis of scheduling in
such a case should be the position of stock with dealers and retailers.
Internal Factors

There should be a manipulation of factors that are in direct control of management and
this manipulation should be done in such a way that goals of production can be
obtained in the most effective and economic way.

Internal factors include the following factors:

Inventory of Finished Goods

In the case of made to stock production, there is a need to adjust operations scheduling
to the inventory of finished goods with the dealers. Scheduling should be performed by
considering the fluctuations in the stock holding.

Process Intervals

These are the time intervals included in processing finished goods from raw material
and from every assembly.

Availability of Equipment and Machines

Varying production capacities are there for different equipment and machines. Also,
through machine load charts, the occupancy scheduling can be made for these
machines and equipment.

Manpower Availability

The availability of the manpower should be considered while doing scheduling. To

adjust the production rush, from the hiring of a temporary worker to overtime working
should be considered.

Availability of Materials

The production flow may get hampered due to stock out circumstances. To ensure
continuous production, scheduling should be facilitated by maintaining proper stock
levels.

Manufacturing Facilities

To facilitate the scheduling function, manufacturing facilities such as material handling

services, power requirements, storekeeping, and other related services should be given
in appropriate quantities. This also helps in the smooth flow of production.
Economic Production Runs

Both set up cost and the carrying cost are equalized under economic production.

Scheduling Activity under Production Planning and Control (PPC)

Below scheduling activities are covered under PPC:

Routing

Routing or planning activity determines the best possible route to manufacture a

product. A plant’s workflow is defined through routing and also, other activities such as
the type of work, place to perform the work, and way to do that are also determined by
routing. For each job, route sheets are made.

Scheduling

Scheduling includes determining the sequence of processing jobs that will be carried out
at each work center. It also establishes the start and the end time of these jobs.

Dispatch

Through dispatch, production to commerce is allowed by material and work order

supply.

Follow up

This includes monitoring progress and making corrections for the purpose of minimizing
deviations.
Scheduling Strategies

Different organizations have different scheduling strategies as it is based on the

production quantity, type, and size of production, organization’s policy, priorities, etc.
These strategies are mostly related to job shop production because more problem
arises in the case of the same plant carries the production of more than one product. 
Classifications include detailed scheduling, cumulative scheduling, cumulative-detailed
scheduling, and priority decision rules.

Detailed Scheduling

Detailed scheduling is done for ensuring the completion of the orders processed to the
job floor by the due date. To achieve this, different shop floor resources such as
material, machine, tools, and people are allocated in a detailed way. The process is
completed once the order has been closed by completing it.

Cumulative Scheduling

The pooling of customer orders is done for making a cumulative workload and further,
the task of matching with the capacity is performed. The allocation of the work is done
further by ensuring the allocation of immediate periods to maximum capacity.

Cumulative-detailed Combination

Both previous strategies of the organization and work load’s flexible nature are
combined in this. Capacity can be planned by making projections of cumulative
workload as required.
Priority Decision Rules

The matter of prioritizing arises at the time of execution of a set of orders. These
priority decision rules are guidelines for scheduling utilized independently or in
collaboration with any one of the above strategies.

Scheduling Guidelines
Below are the guidelines for scheduling:

Realistic schedule: There should be a realistic approach to scheduling rather than an

idealistic one while considering all the practical possibilities.
Allowing adequate time for operations: Appropriate and enough time should be
permitted for production.
Adequate time allocation from starting to the end of operations: This includes
allowing sufficient time for queuing and transit of WIP (work in progress).
Not to release all available jobs to the shop: The capacity is overloaded if all the
available jobs are released once they are received. Also, it results in an increase in the
lead time and excess of WIP inventory.
Only selected work centers to be loaded: Only those work centers should be
selected for operations that are fit.
Allowing required changes: The schedule should be flexible enough to cope up with
required changes and any changes in the products.
Scheduling Approaches
Two types of approaches are there to scheduling i.e. forward scheduling and backward
scheduling. These are utilized to maintain the lead time for manufacturing at a
minimum level and also, to ensure the supply of the products to customers as soon as
possible.

Forward Scheduling

This approach includes processing the customer orders on an immediate basis once
they are received despite their due dates are quite far.  A planned order release date is
selected by the scheduler in the forward scheduling.

Backward Scheduling

This scheduling starts with a planned receipt date or due date. It moves backward in
time based on the required processing time. In this approach, the processing of
customer orders is done quite late for the purpose of completing and delivering the
orders on exact due dates. To determine the starting time of the processing job, the
total days required for processing are set back from the date of completion.
For example, if it takes 20 days to process all processes of a component, the
execution of the forward and backward scheduling can be done as mentioned below:

The methodology of Scheduling (Quantitative)

Different types of methodologies and scheduling are used in production. Methods are
used based on different factors such as products, industry type, organization, and
sophistication level in the production. Scheduling methodology can be categorized into
priority decision rules and charts and boards.

Charts and Boards

These include Gantt load chart, Schedule boards, Gantt progress chart, and Computer
graphics.

Above charts and boards are briefly discussed below:

Gantt Load Chart

This chart depicts the total cumulative workload allotted to each work center in a
manufacturing plant. Gantt load chart is a graph that shows the estimated total and
individual workload related to each work center on a specific time scale.

Gantt chart Benefits

 It is easy to understand the total workload represented graphically in the
chart as it is clear and simple.
  It indicates that more resources are required in the situation when much
more load is there at a single work center. If the work centers are
overloaded, employees working on low-load work centers may be
transferred to these high-load work centers on a temporary basis.
Gantt chart limitations
 These charts don’t include disruptions and delays that occur during work at
work centers.
 There is no information related to the due date related requirements of each
job.
 There is a need for updating chat periodically for new jobs.
Gantt schedule and Progress chart
This chart shows each job’s scheduled starting and finishing dates. It also reveals the
present status of each job.

Schedule boards

Staff working on the shop floor is required to be familiar with the information related to
the way they are processing production-based components and a simple schedule
board can be used to reflect this in the production shops. The progress department
updates the content of schedule boards on daily basis. These boards include simple bar
graphs and the actual status of products or components are represented on these
graphs.

Computer Graphics

Mechanical charts and boards have been replaced by computer graphics. Production
planning and control department is able to keep track of n number of items with the
help of computers and also, the schedule can be revised through these computer
graphics.
Index of Article (Click to Jump)
 Objectives/ Purpose of Operations Scheduling
o Maximizing Utilization of Resources
o Reduction of Manufacturing Time
o Minimizing Inventory
o Labor Efficiency Optimization
o Improvement in Service Level
o Enhancing profits and Outcome
 Factors that Affect Scheduling
o External Factors
 Demand for Customer
 Delivery Dates of Customer
 Inventories of Dealers and Retailers
o Internal Factors
 Inventory of Finished Goods
 Process Intervals
 Availability of Equipment and Machines
 Manpower Availability
 Availability of Materials
 Manufacturing Facilities
 Economic Production Runs
 Scheduling Activity under Production Planning and Control (PPC)
o Routing
o Scheduling
o Dispatch
o Follow up
 Scheduling Strategies
o Detailed Scheduling
o Cumulative Scheduling
o Cumulative-detailed Combination
o Priority Decision Rules
 Scheduling Guidelines
 Scheduling Approaches
o Forward Scheduling
o Backward Scheduling
 The methodology of Scheduling (Quantitative)
o Charts and Boards
 Gantt Load Chart
 Gantt schedule and Progress chart
 Schedule boards
 Computer Graphics
o Priority Decision Rules
 Single-criteria Rules
 Combined Criteria Rules or Rule of Johnson
 Critical Ratio Scheduling
 Index Method of Scheduling
 Critical Path Method
 Scheduling in Services
o Scheduling Demand of Customers
 Backlogs
 Reservations
 Appointments
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*******Scheduling in Production and Operation Management

Scheduling can be defined as “prescribing of when and where each operation necessary
to manufacture the product is to be performed.” It is also defined as “establishing of
times at which to begin and complete each event or operation comprising a procedure”.
The principle aim of scheduling is to plan the sequence of work so that production can
be systematically arranged towards the end of completion of all products by due date.

Principles of Scheduling
1.The principle of optimum task size:  Scheduling tends to achieve maximum
efficiency when the task sizes are small, and all tasks of same order of
magnitude.
2.Principle of optimum production plan:  The planning should be such that it
imposes an equal load on all plants.
3.Principle of optimum sequence:  Scheduling tends to achieve the maximum
efficiency when the work is planned so that work hours are normally used in
the same sequence.

Inputs to Scheduling
1.Performance standards:  The information regarding the performance standards
(standard times for operations) helps to know the capacity in order to assign
required machine hours to the facility.
2.Units in which loading and scheduling is to be expressed.
3.Effective capacity of the work centre.
4.Demand pattern and extent of flexibility to be provided for rush orders.
5.Overlapping of operations.
6.Individual job schedules.
Scheduling Strategies
Scheduling strategies vary widely among firms and range from ‘no scheduling’ to very
sophisticated approaches. These strategies are grouped into four classes:
1.Detailed scheduling:  Detailed scheduling for specific jobs that are arrived
from customers is impracticable in actual manufacturing situation. Changes in
orders, equipment breakdown, and unforeseen events deviate the plans.
 2.Cumulative scheduling:  Cumulative scheduling of total work load is useful
especially for long range planning of capacity needs. This may load the
current period excessively and under load future periods. It has some means
to control the jobs.
3.Cumulative detailed:  Cumulative detailed combination is both feasible and
practical approach. If master schedule has fixed and flexible portions.
4.Priority decision rules:  Priority decision rules are scheduling guides that are
used independently and in conjunction with one of the above strategies, i.e.,
first come first serve. These are useful in reducing Work-In-Process (WIP)
inventory.
Types of Scheduling
Types of scheduling can be categorized as forward scheduling and backward
scheduling.
1.Forward scheduling
is commonly used in job shops where customers place their orders on
“needed as soon as possible” basis. Forward scheduling determines start and
finish times of next priority job by assigning it the earliest available time slot
and from that time, determines when the job will be finished in that work
centre. Since the job and its components start as early as possible, they will
typically be completed before they are due at the subsequent work centers in
the routing. The forward method generates in the process inventory that are
needed at subsequent work centers and higher inventory cost. Forward
scheduling is simple to use and it gets jobs done in shorter lead times,
compared to backward scheduling.
2.Backward scheduling
is often used in assembly type industries and commit in advance to specific
delivery dates. Backward scheduling determines the start and finish times for
waiting jobs by assigning them to the latest available time slot that will enable
each job to be completed just when it is due, but done before. By assigning
jobs as late as possible, backward scheduling minimizes inventories since a
job is not completed until it must go directly to the next work centre on its
routing. Forward and backward scheduling methods are shown in the
following figure.
Forward and backward scheduling
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