Dagstuhl, Feb 7-12, 2016 Optimization-based order release planning Hubert Missbauer Department of Information Systems, Production and Logistics Management University of Innsbruck A-6020 Innsbruck, Austria Hubert Missbauer No. 1
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF assessment | Iterative | Conclusions | Contents 1. Manufacturing planning and control systems, workload control and order release algorithms 2. Order release planning vs. traditional order release mechanisms 3. Order release planning models with fixed lead times 4. Clearing function models 5. Clearing functions – a critical assessment 6. Iterative approach (FLT order release – lead time updating) 7. Conclusions Hubert Missbauer No. 2
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Hierarchical structure of a typical manufacturing planning and control system Top level (“Goods flow control”, “Supply Chain Operations Planning”): Planning and control of the material flow through the entire logistic chain, including capacity planning, at an appropriate level of aggregation. Base level (“Production unit control”): Detailed scheduling of the orders within the production units, usually performed at the shop floor level and for each production unit separately. Interface: - Order release decisions - requires anticipation of flow times – lead times for order release planning ⇒ Controlling flow times by controlling WIP => Workload control (WLC) concept ⇒ Great importance of order release function ⇒ Algorithms for determining order releases are essential research topic! Hubert Missbauer No. 3
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Order release planning in hierarchical MPC systems Order release planning performs • material coordination • control of the state of the production units (WIP, avg. flow times, output) => “mesoscopic” modeling level (Chen and Mandelbaum 1994) Hubert Missbauer No. 4
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Algorithms for determining order release times/periods considering lead times • Traditional order review/release mechanisms (rule-based approach) Variants of a “basic release procedure” (Land 2004), e.g., - CONWIP (Spearman et al. 1989, 1990) - Lancaster University Management School (LUMS) approach (Hendry/Kingsman 1991; Stevenson/Hendry 2006) - Load-oriented order release (Wiendahl 1995) - Starvation Avoidance (Glassey and Resende 1988) - … Interaction order release – dispatching is discussed in this community. Hubert Missbauer No. 5
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Algorithms for determining order release times/periods considering lead times Cont’d • Multi-period order release models - Fixed lead times (based on Input/Output Control: Belt 1976, Wight 1974; with fixed time-lags: Hackman/Leachman 1989) - Load-dependent lead times -- Clearing function models (Karmarkar 1989, Missbauer 1998, 2002, Asmundsson et al. 2006, 2009) -- Lead time estimation without referring to WIP evolution (e.g., Voss/Woodruff 2006) -- Iterative approaches (Hung/Leachman 1996, Riaño 2006, Kim/Kim 2001) Essential differences of the two basic order release concepts: • Decomposition vs. integration of medium-term planning and short-term order release • Capability to utilize foreknowledge of demand Hubert Missbauer No. 6
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Order release planning models for one production unit: generic structure • Production unit is represented as a network of work centers. • Network flow model with continuous flows in discrete time (e.g., Johnson/ Montgomery 1975). • Capacities of the work centers are represented appropriately, depending on the manufacturing system. • Variables: Releases R jt , Production X jmt , WIP W jmt , FGI I jt for each product j in (or at the end of, resp.) period t, measured in units or hours of work. • Flow times (congestion effects) are modelled by additional constraints - internal to the model, - external to the model (by simulation or queueing; iterative solution). • Only the releases R jt are actually executed. Hubert Missbauer No. 7
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Model of a production unit with a single (bottleneck) work center: Fixed lead time v , lag before ∑ ∑ Min! + → hW l I t t t t t t Subject to + - 1, ..., W = W R X t = T -1 t t t t + X - 1, ..., = = I I D t T -1 t t t t = = 1, ..., X R t T t t v − ≤ = 1, ..., X C t T t t , , , 0 1, ..., ≥ = I R W X t T t t t t Symbols (all measured in hours of work): W WIP at the end of period t t R Work released in period t t X Output (actual production) in period t t I Finished goods inventory at the end of period t t D Demand in period t (parameter) t Hubert Missbauer No. 8
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Model of a production unit with a single (bottleneck) work center: Pre-determined backward lead time (distribution) (see also Hung/Leachman 1996; analogous Riaño 2003) ∑ ∑ + → Min! hW l I t t t t t t Subject to + - 1, ..., = = W W R X t T -1 t t t t = + X - = 1, ..., I I D t T -1 t t t t T ∑ 1, ..., = b = R X w t T τ τ − , τ t t τ = t 1, ..., ≤ = X C t T t t , , , 0 1, ..., I R W X ≥ t = T t t t t Additional Symbol b w Fraction of the output in period t that must be released in period t − τ τ , t (in order to be finished in period t ) Hubert Missbauer No. 9
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Model of a production unit with a single (bottleneck) work center: Fixed lead time v , Input/Output control (see Pürgstaller/Missbauer 2012, de Kok/Fransoo 2003) ∑ ∑ ∑ Min! b + a + → h W h F l I t t t t t t t t t Subject to + - 1, ..., = = W W R X t T -1 t t t t = + - = 1, ..., F F X R t T -1 − t t t t v - 1, ..., = + = I I R D t T -1 t t t v − t t v + ∑ 1, ..., W ≤ X t = T t k 1 k t = + ≤ = 1, ..., X C t T t t , , , , 0 1, ..., ≥ = I R W X F t T t t t t t Additional Symbol F WIP inventory of product j after the work center at the end of period t t Hubert Missbauer No. 10
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Simulation model of optical storage media production 24 products, rolling horizon setting Experimental factors: demand pattern, product mix, forecast accuracy Raw material Production Printing Packing SD CD V1 V2 KOD DVD V3 V4 MOD Final product inventory Hubert Missbauer No. 11
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Simulation results for traditional release mechanism (tradRM) and Input/Output control (IOC) with perfect demand forecasts (Pürgstaller/Missbauer 2012) Hubert Missbauer No. 12
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Simulation results for Input/Output control (IOC) for different settings of demand predictability (Pürgstaller/Missbauer 2012) Hubert Missbauer No. 13
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | CF shortcomings | Iterative | Conclusions | Fixed lead time order release planning models - assessment • Largely mature for practical applications, facilitate material coordination • Input/Output control is superior to traditional order review/release mechanisms, even for inaccurate demand forecasts • Input/Output control accurately models the smoothing capability of WIP, models with fixed positioning of time-lag do not. • Fixed lead time is a constraint – no adaptation to demand variations. • Lead time setting and adaptation is critical. Hubert Missbauer No. 14
Dagstuhl, Feb 7-12, 2016 Intro | Trad. ORR | FLT models | Clearing function models | shortcomings | Iterative | Conclusions | Clearing function model of a production unit with a single (bottleneck) work center ∑∑ ∑∑ Min! + → h W l I jt jt jt jt , j t t j t Subject to + - , = ∀ W W R X j t , -1 jt j t jt jt = + X - ∀ , I I D j t jt j t , -1 jt jt Λ = + ∀ , W R j t , -1 jt j t jt ∑ ∑ ≤ Λ ∀ X f t jt jt j j ( ) ; 1,..., , ≤ Λ = ∀ X f k J j t jt j kt , , , 0 , ≥ ∀ I R W X j t jt jt jt jt Λ Load (available work) in period t jt Hubert Missbauer No. 15
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