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Systematic Analysis of PPC System Deficiencies – Analytical Approach and Consequences for PPC Design
Systematic Analysis of PPC System Deficiencies – Analytical Approach and Consequences for PPC Design H.-H. Wiendahl1 1 Institute of Industrial Manufacturing and Management (IFF) – University Stuttgart, Germany Submitted by E. Westkämper (1), Stuttgart, Germany
Abstract Manufacturing companies often complain about the difficulties in meeting customers' logistic requirements. Many blame the production planning and control (PPC) software for the perceived performance deficiencies. This paper illustrates why this only accounts for part of the problem: a holistic PPC configuration includes the six aspects of targets, functions, objects, processes, positions and tools. Based on the requirements for an ideal PPC configuration, the paper identifies a list of typical stumbling blocks. Analyzing them from the perspectives of the individual aspects will explain the deficiencies and indicate possible solutions. Finally the paper describes a procedure for identifying stumbling blocks in practice and how to overcome them. Keywords: Optimization, production, PPC model
2 SURVEY OF PPC SYSTEM DEFICIENCIES Identifying PPC deficiencies requires firstly to define the term PPC system: In this context, it encompasses the entirety of tasks, tools and people necessary to plan and control the processes 'Source', 'Make' and 'Deliver' in accordance with the terminology of the SCOR model [3, 5]. A case study of another sample from 40 industrial firms with insufficient logistical performance revealed four typical symptoms of discomfort in PPC operation [3]: • Poor target achievement, i.e. unacceptable deviations from target values, • lack of transparency, i.e. unacceptably wide difference between planned and actual order progress, • high efforts in order tracking, and • event-driven decisions. The first two are 'objective' symptoms representing a more technical view on PPC; the last two are 'subjective' symptoms, representing an organizational and actors view of the people in charge. Further differentiating them leads to eight typical deficiencies (Figure 1, left).
1 INTRODUCTION In today's production environment, superior logistics performance creates competitive advantages. To achieve this, companies spend much time and money to implement new PPC software. For many of them, however, this does not yield the expected success [1]. Often, the improvement steps focus on technical and software aspects. For that reason the experience of a tool manufacturer seems typical: After segmenting production and implementing new PPC software, the company still misses the logistic targets by far. In this situation, it is completely unclear what steps are needed next. As the classical PPC approach (with focus on technical aspects of functions, data and software) cannot explain these deficits [2], an enlarged socio-technical approach is needed. To prove the practical relevance a literature review and a survey of 80 manufacturing companies has been performed, often pointing to organizational rout causes [3, 4]. In conclusion, the paper proposes a holistic PPC design and configuration including organizational issues and actor interests as a new approach.
x
weak correlation
Deficiencies
1 Contradictory targets and implementation
X
X
re si sp bi o lit ny
strong correlation
in fa ter ce s
X
ta se rge tti t ng a in cto te r re st s vi liz su at aio n lo kn gis ow tic le d pa ge se ra tti me ng te r d qu ata al i ty
Root Causes
x
2 Unrealistic planning and scheduling
x
X
X
3 Vicious cycles
x
X
X
4 Lack of planning responsibility
x
x
X
5 Inconsistent order dispatching
x
x
X
6 Incorrect transaction data
x
X
7 Incorrect master data
x
x
X
8 Insufficient ergonomic design
X
x
X
Figure 1: Root causes of PPC system deficiencies.
Annals of the CIRP Vol. 55/1/2006
X
X
In order to remove the observed symptoms of discomfort, Figure 1 correlates these deficiencies to their rout causes:
Set targets
• Each deficiency shows the 'objective' symptoms of 'target achievement' or 'transparency'. The technical view on PPC is therefore able to identify a deficiency. • There is a multiple correlation between deficiencies and rout causes: Some cases require a technical view with relevant improvement steps (group 2, 3), some an actors’ and organizational view on PPC (group 4, 5, 8), some a combination of both (group 1, 6, 7). • Clear visualization supports proper logistic decisions. Key is the ergonomic design of the software and the logistic qualification of the people in charge. But this is not enough to systematically identify and overcome the deficiencies. Therefore, theoretical fundaments are needed • to derive a PPC model describing configuration requirements as necessary results of PPC activities, • to develop a framework for PPC design to identify and explain deficiencies as internal configuration mistakes, • to classify typical configuration deficiencies which can be used to improve real situations. The result should be a theoretically sound and practical procedure for a qualitative PPC screening method. 3 PPC MODEL Customers and suppliers ask for reliable delivery dates and the manufacturing system behavior must be predicted. This is the core task of PPC: to allocate items, processes and resources to orders in terms of time and volume. Action theory distinguishes two levels for examining activities [6]: • The execution level comprises all operative activities and focuses on executing purchase, parts fabrication and assembly (execution system). • The managing level comprises all planning activities that are essential to prepare and review execution activities (information and decision making system). The managing activities facilitate the necessary guidance of the execution process by controlling the material value-added chain and by critically examining the feasibility of given targets. The process view combines these activities in the four sub-phases Plan, Do, Check and (Re-)Act as defined by the Deming cycle [7]. Its basis is the tight link between planning and execution activities (Figure 2, inside). 3.1 The PPC Cycle To describe the necessary results of the activities, a more detailed process view on PPC is needed. Following the decision theory, the complete cycle is subdivided into eight steps (Figure 2). The cycle expresses the dynamic manufacturing behavior as a result of interdependent planning and executive activities. This accentuates two everyday PPC phenomena familiar to every practitioner:
Forecast Learn
(Re-)Act
Evaluate Check Order progress
Plan Allocate
Do
Collect
Decide Production plan
Do
Figure 2: The PPC Cycle. 3.2 Configuration Requirements of PPC From an information processing view, each activity transforms input into output data. Thus, there are two operating characteristics for a smooth-running cycle: • Minor deviations in the output data of each activity, i.e. between target, planned and actual values • Synchronicity, i.e. updated and real-time results are needed to support a smooth running So, each activity should produce complete, correct and updated results. Comparing these characteristics with each activity in the cycle leads – from an internal view – to the following configuration requirements of PPC: • Realistic targets: target setting must be ambitious but feasible for manufacturing. • Realistic planning: production plans must be feasible for manufacturing, i.e. new boundary conditions require new planning activities. • Execution in line with planning: consistent control to achieve the production plans, actual execution must be on time, i.e. neither too late nor too early. • Accurate feedback: feedback information must be complete, correct and on time, and the analysis of consequences must be logistically accurate. • Consistent adaptation: the improvement of the PPC system must suit changing requirements. Figure 3 structures these configuration requirements and assesses the PPC deficiencies through a result analysis for the above-mentioned tool manufacturer. This result assessment identifies PPC deficiencies but doesn't explain them. Results complete
correct
updated
Targets
9
(Act)
Planning
9
• On the one hand, it shows why PPC is iterative. Due to the fact that planning tries to anticipate future events, one will always have to deal with unforeseen situations that require new planning activities.
Execution
9
Feedback
• On the other hand, the model indicates who contributes to the functioning of PPC. Only if all individual actors involved have a joint understanding of the different activities and their interplay, the system can work successfully. In this context, the production plan and its general acceptance play an important role.
(Check)
9
(Plan)
(Do)
9
Adaptation (Re-act)
assessment of case study:
9 good
bad
Figure 3: PPC deficiency assessment I (case study).
4 HOLISTIC PPC DESIGN To explain these deficiencies, a framework for a holistic PPC design is necessary. Complex systems cannot be captured as a whole, which makes it necessary to model them aspect-by-aspect. In socio-technical systems, activities are the central criteria that describe the system. The Russian psychologist Leont'ev proposes an activitybased analysis [8]. 4.1 Design aspects in PPC Specker defines five perspectives to analyze and design IT systems [9]. Applied to PPC, six design aspects of a PPC system can be distinguished, see Figure 4: • The PPC targets require decisions on logistical positioning. If necessary, different targets need to be defined for different departments. • The PPC functions define the activities that are required to plan and control the manufacturing processes. PPC methods carry out PPC functions based on defined algorithms and data. • The PPC objects are the planning subjects of PPC. Most important are items (finished products, components or raw materials), resources (machinery, personnel, etc.), manufacturing processes and orders (customer orders, spare parts orders, etc.). • The PPC processes determine the logical sequence of planning and control activities. Thus they define the workflow of order processing along the logistic process chain, i.e. the business process. The process steps related to the material flow follow the same logic but are not a direct subject matter of the PPC system: they are modeled as PPC objects. • The PPC positions determine the responsibility of the staff members. The classical PPC understanding assumes centralized decisions, ignoring this aspect. • The planning and control tools support the operational order processing by semi-automated PPC activities. This creates standards for operational activities. Staff therefore has more time available for the necessary planning and control decisions. The five design aspects of target, function, object, process and position described above constitute the logical core of a PPC system. The tools have to map the PPC design to the software effectively and efficiently. In addition, the framework indicates the two main views on PPC (Figure 4, outside): On the one hand, the functional logic of order processing, corresponding with the classical technical view on PPC. On the other hand the workflow of order processing, corresponding with the required second view of organization and actors. Workflow of order processing
Function
Process
Target Object
Position
Functional logic of order processing
Figure 4: Design aspects of a PPC system.
Design aspects Functional logic
Targets
• target priority • realistic target • tolerance
Planning
• planning fct. • pl. parameter • tolerance
Execution
• control fct. • ctrl. parameter • tolerance
Feedback
• calculat. logic • frequency • grid
Adaptation
• calculat. logic • deviation anal. • adaptation fct. deficiency clusters:
9 9
9 9 9
Workflow • responsibility • prior. process • acceptance
9
• responsibility • coordin. proc. • acceptance
9
• responsibility • coordin. proc. • actor interests
9
1
9
2
• responsibility 9 • feedback proc. 9 • actor interests 9 • responsibility • adap. process • actor interests
3
1 targets 2 logistical guideline 3 parameterization
Figure 5: PPC deficiency assessment II (case study). 4.2 Stumbling Blocks in PPC Combining the activity view of the PPC cycle with the main views of functional logic and workflow will lead to a root cause analysis of PPC deficiencies. Figure 5 specifies the results as a check list of requirements including the application to the described tool manufacturer. This allows a definition of PPC deficiency: The so-called 'stumbling block in PPC' exclusively applies to internal mistakes in the PPC configuration of the six design aspects defined above [3]. Factors related to the external environment, such as the literally 'chaotic' customers, are not considered. The PPC system itself does not control any of these factors. Nevertheless, the external factors represent requirements that have to be considered when designing a PPC system. 5 APPLICATION The results are applied in a three step procedure for the tool manufacturer: Firstly, the result analysis of deficiencies (Figure 3); secondly, the cause analysis (Figure 5); thirdly, actions to identify the necessary improvement steps (Figure 7). Figure 5 visualizes the main results of the root cause analysis and groups the PPC deficiencies into clusters according to the three following headings. Targets Interviews with employees highlighted the contradictory logistical target priorities of shop manager and foremen as main stumbling block (Figure 5): The shop manager assigns top priority to short lead times, whereas the foremen strive for high output and therefore utilization. From a logistical perspective this conflict is critical: It is not possible to maximize utilization (requiring a high WIP level) while minimizing lead time (requiring a low WIP level). Several authors pointed out that the challenge for managers therefore is not to "optimize" a certain logistic target, but rather to make a rational trade-off between them [10]. To resolve this stumbling block, all actors must have the same target priority [3]. Logistical Guideline The qualitative analysis of the PPC functions also showed a disagreement between the planned and actual flow of orders, i.e. the logistical guideline [11]: In accordance with their target priority of high utilization, the foremen change
the planned sequence to avoid setup times. As a result, planning and control decisions are not coherent: This creates a wide distribution of actual lead times; poor duedate reliability will follow. The quantitative analysis proves this: 40% of orders are not in time, see Figure 6a. The simulation analysis shows: combining WIP-based order release with backlog-based capacity control while using a strict FiFo rule for sequencing, will significantly increase due-date reliability, Figure 6b. Putting this into practice requires coordination processes for planning and control decisions as well as mitigating the conflicting actor interests for execution, Figure 5. Parameterization Successful implementation calls for a process including regular data maintenance and responsibilities, Figure 5. All results point to a lack of logistical and organizational knowledge: here the required joint understanding of the actors is missing. A role-specific qualification program [12] has been carried out to overcome this deficiency. Finally, Figure 7 structures the required steps for improvement in an extended PPC cycle. The levels identify the design responsibilities in PPC. Thus, the cycle enables a continuous review and holistic PPC adaptation to ensure superior logistics performance.
quantity
60% 60% of of orders orders in in time time
10 0
8 REFERENCES [1] Kraemmerand, P., Møller, C., Boer, H., 2003, ERP implementation: an integrated process of radical change and continuous learning, Production Planning & Control, 14/4:338-348. [2] Vollmann, T.E., et al., 1997, Manufacturing Planning and Control Systems, Dow Jones-Irwin, Homewood [3] Wiendahl, H.-H., Wiendahl, H.-P., v. Cieminski, G., 2005, Stumbling blocks of PPC: towards the holistic configuration of PPC systems, Production Planning & Control, 16/7:634-651. [4] Schuh, G., Westkämper, E. (Eds), 2006, Liefertreue im Maschinen- und Anlagenbau, Studie, Aachen. [5] Supply Chain Operations Reference Model, 2006, Version 7.0, http://www.supply-chain.org (4.01.2006) [6] Ropohl, G., 1999, Allgemeine Technologie – eine Systemtheorie der Technik, Hanser, München. [7] Deming, W. E., 1992, Out of Crisis, Massachusetts Institute of Technology, Cambridge, Mass. [8] Leont'ev, A. N., 1977, Tätigkeit, Bewusstsein, Persönlichkeit, Klett, Stuttgart. [9] Specker, A., 2005, Modellierung von Informationssystemen, 2. ed., vdf, Zürich. [10] Nyhuis, P, et al., 2005, Applying Simulation and Analytical Models for Logistic Performance Prediction, Annals of the CIRP, 54/1:417-422. [11] Wiendahl, H.-H., Roth, N., Westkämper, E., 2002, Logistical Positioning in a Turbulent Environment, Annals of the CIRP, 51/1:383-386. [12] Wiendahl, H.-H., Westkämper, E.,2004, PPC Design and Human Aspects, Production Engineering (WGP Annals), 11/1:129-132.
n = 1,649 orders μ = - 5.7 days σ = 64.5 days in time not in time
mean value
%
20
7 ACKNOWLEDGMENTS The author expresses his sincere thanks to Prof. E. Westkämper and H.-P. Wiendahl for their support. The results are part of the ongoing research project “Model-based Order Management Design for discrete manufacturing". The project is funded by the German Research Foundation DFG (WI 2670/1).
too early too late
50
30
6 SUMMARY To improve logistics performance, this paper proposes a holistic PPC design. It evaluates the efficiency of PPC operation (doing the things right), whereas effectiveness (doing the right things) is a question of market-orientation and not a topic of this paper. The result is a theoretically sound and practicable checking procedure based on a fast and reliable PPC screening of internal deficiencies.
-90
-60
-30 0 30 due-date deviation
days
90
a) Due-date reliability tool manufacturer (actual situation) too early too late
50 quantity
30 20 10 0
n = 1,803 orders μ = + 3.6 days σ = 9.5 days in time not in time
mean value
%
95% 95% of of orders orders in in time time -90
-60
-30 30 0 due-date deviation
days
90
b) Due-date reliability tool manufacturer (target situation)
Figure 6: Potential for logistics performance (case study). Act 3
Logistic strategy • target priority • delivery tolerance • logistical guideline
operation tasks
design tasks
• control functions • deviation analysis • adaptation functions
• coordination process • plan acceptance • actor interests (execution)
logistic management
• target acceptance • adaptation responsibility • logistical qualification
operative logisticians
Parameterization
Act 1
• realistic target • planning tolerance • calc. logic, parameter Plan
Do
general management
Basic configuration
Act 2
Check
• prioritization process • adaptation process • actor interests (adaptation)
Functional logic of order processing
Workflow of order processing
Design aspects
Figure 7: Levels of Change and necessary steps for improvement (case study).
Design responsibility
Abstract Manufacturing companies often complain about the difficulties in meeting customers' logistic requirements. Many blame the production planning and control (PPC) software for the perceived performance deficiencies. This paper illustrates why this only accounts for part of the problem: a holistic PPC configuration includes the six aspects of targets, functions, objects, processes, positions and tools. Based on the requirements for an ideal PPC configuration, the paper identifies a list of typical stumbling blocks. Analyzing them from the perspectives of the individual aspects will explain the deficiencies and indicate possible solutions. Finally the paper describes a procedure for identifying stumbling blocks in practice and how to overcome them. Keywords: Optimization, production, PPC model
2 SURVEY OF PPC SYSTEM DEFICIENCIES Identifying PPC deficiencies requires firstly to define the term PPC system: In this context, it encompasses the entirety of tasks, tools and people necessary to plan and control the processes 'Source', 'Make' and 'Deliver' in accordance with the terminology of the SCOR model [3, 5]. A case study of another sample from 40 industrial firms with insufficient logistical performance revealed four typical symptoms of discomfort in PPC operation [3]: • Poor target achievement, i.e. unacceptable deviations from target values, • lack of transparency, i.e. unacceptably wide difference between planned and actual order progress, • high efforts in order tracking, and • event-driven decisions. The first two are 'objective' symptoms representing a more technical view on PPC; the last two are 'subjective' symptoms, representing an organizational and actors view of the people in charge. Further differentiating them leads to eight typical deficiencies (Figure 1, left).
1 INTRODUCTION In today's production environment, superior logistics performance creates competitive advantages. To achieve this, companies spend much time and money to implement new PPC software. For many of them, however, this does not yield the expected success [1]. Often, the improvement steps focus on technical and software aspects. For that reason the experience of a tool manufacturer seems typical: After segmenting production and implementing new PPC software, the company still misses the logistic targets by far. In this situation, it is completely unclear what steps are needed next. As the classical PPC approach (with focus on technical aspects of functions, data and software) cannot explain these deficits [2], an enlarged socio-technical approach is needed. To prove the practical relevance a literature review and a survey of 80 manufacturing companies has been performed, often pointing to organizational rout causes [3, 4]. In conclusion, the paper proposes a holistic PPC design and configuration including organizational issues and actor interests as a new approach.
x
weak correlation
Deficiencies
1 Contradictory targets and implementation
X
X
re si sp bi o lit ny
strong correlation
in fa ter ce s
X
ta se rge tti t ng a in cto te r re st s vi liz su at aio n lo kn gis ow tic le d pa ge se ra tti me ng te r d qu ata al i ty
Root Causes
x
2 Unrealistic planning and scheduling
x
X
X
3 Vicious cycles
x
X
X
4 Lack of planning responsibility
x
x
X
5 Inconsistent order dispatching
x
x
X
6 Incorrect transaction data
x
X
7 Incorrect master data
x
x
X
8 Insufficient ergonomic design
X
x
X
Figure 1: Root causes of PPC system deficiencies.
Annals of the CIRP Vol. 55/1/2006
X
X
In order to remove the observed symptoms of discomfort, Figure 1 correlates these deficiencies to their rout causes:
Set targets
• Each deficiency shows the 'objective' symptoms of 'target achievement' or 'transparency'. The technical view on PPC is therefore able to identify a deficiency. • There is a multiple correlation between deficiencies and rout causes: Some cases require a technical view with relevant improvement steps (group 2, 3), some an actors’ and organizational view on PPC (group 4, 5, 8), some a combination of both (group 1, 6, 7). • Clear visualization supports proper logistic decisions. Key is the ergonomic design of the software and the logistic qualification of the people in charge. But this is not enough to systematically identify and overcome the deficiencies. Therefore, theoretical fundaments are needed • to derive a PPC model describing configuration requirements as necessary results of PPC activities, • to develop a framework for PPC design to identify and explain deficiencies as internal configuration mistakes, • to classify typical configuration deficiencies which can be used to improve real situations. The result should be a theoretically sound and practical procedure for a qualitative PPC screening method. 3 PPC MODEL Customers and suppliers ask for reliable delivery dates and the manufacturing system behavior must be predicted. This is the core task of PPC: to allocate items, processes and resources to orders in terms of time and volume. Action theory distinguishes two levels for examining activities [6]: • The execution level comprises all operative activities and focuses on executing purchase, parts fabrication and assembly (execution system). • The managing level comprises all planning activities that are essential to prepare and review execution activities (information and decision making system). The managing activities facilitate the necessary guidance of the execution process by controlling the material value-added chain and by critically examining the feasibility of given targets. The process view combines these activities in the four sub-phases Plan, Do, Check and (Re-)Act as defined by the Deming cycle [7]. Its basis is the tight link between planning and execution activities (Figure 2, inside). 3.1 The PPC Cycle To describe the necessary results of the activities, a more detailed process view on PPC is needed. Following the decision theory, the complete cycle is subdivided into eight steps (Figure 2). The cycle expresses the dynamic manufacturing behavior as a result of interdependent planning and executive activities. This accentuates two everyday PPC phenomena familiar to every practitioner:
Forecast Learn
(Re-)Act
Evaluate Check Order progress
Plan Allocate
Do
Collect
Decide Production plan
Do
Figure 2: The PPC Cycle. 3.2 Configuration Requirements of PPC From an information processing view, each activity transforms input into output data. Thus, there are two operating characteristics for a smooth-running cycle: • Minor deviations in the output data of each activity, i.e. between target, planned and actual values • Synchronicity, i.e. updated and real-time results are needed to support a smooth running So, each activity should produce complete, correct and updated results. Comparing these characteristics with each activity in the cycle leads – from an internal view – to the following configuration requirements of PPC: • Realistic targets: target setting must be ambitious but feasible for manufacturing. • Realistic planning: production plans must be feasible for manufacturing, i.e. new boundary conditions require new planning activities. • Execution in line with planning: consistent control to achieve the production plans, actual execution must be on time, i.e. neither too late nor too early. • Accurate feedback: feedback information must be complete, correct and on time, and the analysis of consequences must be logistically accurate. • Consistent adaptation: the improvement of the PPC system must suit changing requirements. Figure 3 structures these configuration requirements and assesses the PPC deficiencies through a result analysis for the above-mentioned tool manufacturer. This result assessment identifies PPC deficiencies but doesn't explain them. Results complete
correct
updated
Targets
9
(Act)
Planning
9
• On the one hand, it shows why PPC is iterative. Due to the fact that planning tries to anticipate future events, one will always have to deal with unforeseen situations that require new planning activities.
Execution
9
Feedback
• On the other hand, the model indicates who contributes to the functioning of PPC. Only if all individual actors involved have a joint understanding of the different activities and their interplay, the system can work successfully. In this context, the production plan and its general acceptance play an important role.
(Check)
9
(Plan)
(Do)
9
Adaptation (Re-act)
assessment of case study:
9 good
bad
Figure 3: PPC deficiency assessment I (case study).
4 HOLISTIC PPC DESIGN To explain these deficiencies, a framework for a holistic PPC design is necessary. Complex systems cannot be captured as a whole, which makes it necessary to model them aspect-by-aspect. In socio-technical systems, activities are the central criteria that describe the system. The Russian psychologist Leont'ev proposes an activitybased analysis [8]. 4.1 Design aspects in PPC Specker defines five perspectives to analyze and design IT systems [9]. Applied to PPC, six design aspects of a PPC system can be distinguished, see Figure 4: • The PPC targets require decisions on logistical positioning. If necessary, different targets need to be defined for different departments. • The PPC functions define the activities that are required to plan and control the manufacturing processes. PPC methods carry out PPC functions based on defined algorithms and data. • The PPC objects are the planning subjects of PPC. Most important are items (finished products, components or raw materials), resources (machinery, personnel, etc.), manufacturing processes and orders (customer orders, spare parts orders, etc.). • The PPC processes determine the logical sequence of planning and control activities. Thus they define the workflow of order processing along the logistic process chain, i.e. the business process. The process steps related to the material flow follow the same logic but are not a direct subject matter of the PPC system: they are modeled as PPC objects. • The PPC positions determine the responsibility of the staff members. The classical PPC understanding assumes centralized decisions, ignoring this aspect. • The planning and control tools support the operational order processing by semi-automated PPC activities. This creates standards for operational activities. Staff therefore has more time available for the necessary planning and control decisions. The five design aspects of target, function, object, process and position described above constitute the logical core of a PPC system. The tools have to map the PPC design to the software effectively and efficiently. In addition, the framework indicates the two main views on PPC (Figure 4, outside): On the one hand, the functional logic of order processing, corresponding with the classical technical view on PPC. On the other hand the workflow of order processing, corresponding with the required second view of organization and actors. Workflow of order processing
Function
Process
Target Object
Position
Functional logic of order processing
Figure 4: Design aspects of a PPC system.
Design aspects Functional logic
Targets
• target priority • realistic target • tolerance
Planning
• planning fct. • pl. parameter • tolerance
Execution
• control fct. • ctrl. parameter • tolerance
Feedback
• calculat. logic • frequency • grid
Adaptation
• calculat. logic • deviation anal. • adaptation fct. deficiency clusters:
9 9
9 9 9
Workflow • responsibility • prior. process • acceptance
9
• responsibility • coordin. proc. • acceptance
9
• responsibility • coordin. proc. • actor interests
9
1
9
2
• responsibility 9 • feedback proc. 9 • actor interests 9 • responsibility • adap. process • actor interests
3
1 targets 2 logistical guideline 3 parameterization
Figure 5: PPC deficiency assessment II (case study). 4.2 Stumbling Blocks in PPC Combining the activity view of the PPC cycle with the main views of functional logic and workflow will lead to a root cause analysis of PPC deficiencies. Figure 5 specifies the results as a check list of requirements including the application to the described tool manufacturer. This allows a definition of PPC deficiency: The so-called 'stumbling block in PPC' exclusively applies to internal mistakes in the PPC configuration of the six design aspects defined above [3]. Factors related to the external environment, such as the literally 'chaotic' customers, are not considered. The PPC system itself does not control any of these factors. Nevertheless, the external factors represent requirements that have to be considered when designing a PPC system. 5 APPLICATION The results are applied in a three step procedure for the tool manufacturer: Firstly, the result analysis of deficiencies (Figure 3); secondly, the cause analysis (Figure 5); thirdly, actions to identify the necessary improvement steps (Figure 7). Figure 5 visualizes the main results of the root cause analysis and groups the PPC deficiencies into clusters according to the three following headings. Targets Interviews with employees highlighted the contradictory logistical target priorities of shop manager and foremen as main stumbling block (Figure 5): The shop manager assigns top priority to short lead times, whereas the foremen strive for high output and therefore utilization. From a logistical perspective this conflict is critical: It is not possible to maximize utilization (requiring a high WIP level) while minimizing lead time (requiring a low WIP level). Several authors pointed out that the challenge for managers therefore is not to "optimize" a certain logistic target, but rather to make a rational trade-off between them [10]. To resolve this stumbling block, all actors must have the same target priority [3]. Logistical Guideline The qualitative analysis of the PPC functions also showed a disagreement between the planned and actual flow of orders, i.e. the logistical guideline [11]: In accordance with their target priority of high utilization, the foremen change
the planned sequence to avoid setup times. As a result, planning and control decisions are not coherent: This creates a wide distribution of actual lead times; poor duedate reliability will follow. The quantitative analysis proves this: 40% of orders are not in time, see Figure 6a. The simulation analysis shows: combining WIP-based order release with backlog-based capacity control while using a strict FiFo rule for sequencing, will significantly increase due-date reliability, Figure 6b. Putting this into practice requires coordination processes for planning and control decisions as well as mitigating the conflicting actor interests for execution, Figure 5. Parameterization Successful implementation calls for a process including regular data maintenance and responsibilities, Figure 5. All results point to a lack of logistical and organizational knowledge: here the required joint understanding of the actors is missing. A role-specific qualification program [12] has been carried out to overcome this deficiency. Finally, Figure 7 structures the required steps for improvement in an extended PPC cycle. The levels identify the design responsibilities in PPC. Thus, the cycle enables a continuous review and holistic PPC adaptation to ensure superior logistics performance.
quantity
60% 60% of of orders orders in in time time
10 0
8 REFERENCES [1] Kraemmerand, P., Møller, C., Boer, H., 2003, ERP implementation: an integrated process of radical change and continuous learning, Production Planning & Control, 14/4:338-348. [2] Vollmann, T.E., et al., 1997, Manufacturing Planning and Control Systems, Dow Jones-Irwin, Homewood [3] Wiendahl, H.-H., Wiendahl, H.-P., v. Cieminski, G., 2005, Stumbling blocks of PPC: towards the holistic configuration of PPC systems, Production Planning & Control, 16/7:634-651. [4] Schuh, G., Westkämper, E. (Eds), 2006, Liefertreue im Maschinen- und Anlagenbau, Studie, Aachen. [5] Supply Chain Operations Reference Model, 2006, Version 7.0, http://www.supply-chain.org (4.01.2006) [6] Ropohl, G., 1999, Allgemeine Technologie – eine Systemtheorie der Technik, Hanser, München. [7] Deming, W. E., 1992, Out of Crisis, Massachusetts Institute of Technology, Cambridge, Mass. [8] Leont'ev, A. N., 1977, Tätigkeit, Bewusstsein, Persönlichkeit, Klett, Stuttgart. [9] Specker, A., 2005, Modellierung von Informationssystemen, 2. ed., vdf, Zürich. [10] Nyhuis, P, et al., 2005, Applying Simulation and Analytical Models for Logistic Performance Prediction, Annals of the CIRP, 54/1:417-422. [11] Wiendahl, H.-H., Roth, N., Westkämper, E., 2002, Logistical Positioning in a Turbulent Environment, Annals of the CIRP, 51/1:383-386. [12] Wiendahl, H.-H., Westkämper, E.,2004, PPC Design and Human Aspects, Production Engineering (WGP Annals), 11/1:129-132.
n = 1,649 orders μ = - 5.7 days σ = 64.5 days in time not in time
mean value
%
20
7 ACKNOWLEDGMENTS The author expresses his sincere thanks to Prof. E. Westkämper and H.-P. Wiendahl for their support. The results are part of the ongoing research project “Model-based Order Management Design for discrete manufacturing". The project is funded by the German Research Foundation DFG (WI 2670/1).
too early too late
50
30
6 SUMMARY To improve logistics performance, this paper proposes a holistic PPC design. It evaluates the efficiency of PPC operation (doing the things right), whereas effectiveness (doing the right things) is a question of market-orientation and not a topic of this paper. The result is a theoretically sound and practicable checking procedure based on a fast and reliable PPC screening of internal deficiencies.
-90
-60
-30 0 30 due-date deviation
days
90
a) Due-date reliability tool manufacturer (actual situation) too early too late
50 quantity
30 20 10 0
n = 1,803 orders μ = + 3.6 days σ = 9.5 days in time not in time
mean value
%
95% 95% of of orders orders in in time time -90
-60
-30 30 0 due-date deviation
days
90
b) Due-date reliability tool manufacturer (target situation)
Figure 6: Potential for logistics performance (case study). Act 3
Logistic strategy • target priority • delivery tolerance • logistical guideline
operation tasks
design tasks
• control functions • deviation analysis • adaptation functions
• coordination process • plan acceptance • actor interests (execution)
logistic management
• target acceptance • adaptation responsibility • logistical qualification
operative logisticians
Parameterization
Act 1
• realistic target • planning tolerance • calc. logic, parameter Plan
Do
general management
Basic configuration
Act 2
Check
• prioritization process • adaptation process • actor interests (adaptation)
Functional logic of order processing
Workflow of order processing
Design aspects
Figure 7: Levels of Change and necessary steps for improvement (case study).
Design responsibility