Page 328 - Orlicky's Material Requirements Planning

CHAPTER 18 Process Industry Application 307

temperature, pressure, and flow to determine how production should be scheduled. This
provides an additional level of complexity to the material planning process.
The process plant is rarely a single “V” type process. It is not unusual to find a blend
of manufacturing types inside a process plant. The initial processing of the main product
may occur in a continuous flow, but it is very common to find that final packaging is done
in lots or batches. Food processing is a good example. The product may be produced con-
tinuously but then must be packaged into a finite number of different package sizes. The
final BOM resembles a “T.”
The scheduling interface between the long, continuous runs of product must be inte-
grated with the final product configuration so that the product meets all manufacturing
requirements. This can include how long the work-in-process can be held in bulk before
packaging. The forecast market demands must be met and the best profit achieved. This
schedule is further detailed into the individual retail pack. The retail pack then usually
has some kind of shipping or case overpack for sale to the distributor. These distribution
packs can be simple, where one product is put in each case, or a complex pack. A com-
plex pack is a mix of products or an assortment put into one case pack. These distribu-
tion packs then must be consolidated onto a pallet for shipping purposes. These pallets
are tracked through the system, but visibility to the individual retail pack must be main-
tained. Having appropriate scheduling tools is essential in this environment so that the
very best schedule can be developed.
In addition to this type of bulk-to-pack manufacturing processes, process industries
use different quality measures. The discrete plant typically inspects parts with a binary
result. The part is either good or not. Good parts are used, and bad parts are scrapped or
reworked. A process plant can test a batch or a part to determine its potency or grade. The
result is not as simple as good or bad. The same production costs may be incurred to pro-
duce a batch of product with a low- or high-grade result. The low grade only can be sold
for a low price—if it can be sold at all. The high grade demands a premium in the mar-
ket. The high grade also may be affected by storage time. If the product is stored too long,
the grade may deteriorate into a lower-grade salable product or may deteriorate into
unsalable product. Each run will produce many different products, and the end result is
not known until the run is complete and the testing accomplished.
In refining, during the summer season, gasoline is in higher demand and com-
mands a higher price than other products. In the winter season, heating oil has the pri-
ority. The profitability of the operation depends on being able to shift the production
schedule between these two seasons, taking into consideration market demand, the qual-
ity of the crude being received, the physical constraints of the process equipment, major
maintenance, overhaul requirements, season of the year owing to regulations regarding
pollution, and storage capacity for building inventory in the chosen market location(s).
Traditional manufacturing only has to worry about where a part was placed in storage so
that it can be retrieved. Many process plants can go back to the same location, and the
product has changed by virtue of sitting on the shelf. This is yet another complication in
scheduling the process plant.