Page 295 - Orlicky's Material Requirements Planning

274 PART 3 Managing with the MRP System

FIGURE 15-1

Wheelwright and Hayes product/process matrix.

Process Structure Product Structure Low Volume Low Volume High Volume Very High Volume
Process Life Product Life Unique (one Multiple Standardized Commodity
Cycle Stage Cycle Stage of a kind) Products Product Product
(Project)
Jumbled flow Job shop
(job shop)
Disconnected line Batch
flow (batch)
Connected line flow Assembly line
(assembly line)
Continuous flow Continuous
(continuous)

lated using backward scheduling. Backward scheduling determines the latest each task
can start. In the process of scheduling all the required tasks, some tasks have a difference
between early and late start or early and late finish.
When planning material to be available to begin a task, the difference between an
early and late start is significant. The question quickly arises about when the material
should be available: in time for the earliest possible start or hold off investing that capi-
tal in inventory until the last possible minute? The project-type company must decide
and establish the material policy for ordering needed materials, choosing them to be
available at the early start, late start, or average start date. In most companies of this type,
the policy is to have the materials available at the earliest possible start date because a
project-driven company’s cost typically is driven most by the resources used rather than
by the materials. These resources are usually the constraint to the company delivering a
higher level of output. Having a resource idle because materials are not ready or avail-
able can cause a great financial loss because this resource’s capacity cannot be regained
once it is lost.
To manage these scarce resources more effectively and improve the overall time and
expense required to complete a project, a scheduling methodology has been developed
recently in the project scheduling area called critical-chain scheduling. This scheduling
method pulls all the individual slack times from each operation and provides a schedule
buffer for significant paths within the overall project. The traditional project scheduling
method has this slack-time buffer broken up at each operation. Project management real-
ity is that since the most critical resources are people, and since people are driven by
deadlines, getting a task completed early is virtually impossible. The natural tendency is
to wait until the last possible finish date to focus on the work and accomplish the tasks
because the resources typically have more to do than there is capacity available. Figure
15-2 shows how the individual activity buffers are moved to the end of the project so that
real requirement dates for each activity can be identified.