HEE 2327: MANAGING OPERATIONS

IN SMALL ENTERPRISE

TOPIC 6: PROGRAMMES
Programmes in Operations
Management
In operations management, programmes refer to the planned coordination of activities that support
efficient production, timely service delivery, and optimal use of resources.

Purpose in Small Enterprises

Well-structured programmes help small businesses manage time, cost, and performance—improving
control and competitiveness in dynamic markets.
Operational Role
These programmes support key tasks such as:
• Demand forecasting
• Material planning
• Inventory control
• Scheduling deliveries
• Monitoring workflow
• Lean operation practices

Effective programmes directly improve productivity, customer satisfaction, and profitability.

Forecasting Demand
• Forecasting means predicting future events using past data, trends, and logic
• Helps deal with uncertainty through scientific methods
• Involves assessing facts and anticipating future business conditions
• Sales forecasting focuses on predicting future sales
• Considers internal (e.g. company capacity) and external (e.g. market trends)
factors
• Aims to estimate customer demand
• Forecasting is a key part of managerial planning and control
• Acts as foresight in action, helping firms prepare for expected changes
• Offers a clear picture of near events and a general view of distant ones
• Guides allocation of resources, timelines, and strategies
Forecasting in Marketing and
Operations
• For a marketing manager, a sales forecast represents an estimate of the number of units or
revenue expected in a specified future period under a proposed marketing plan. It is based on
assumed economic conditions and external forces, such as market trends, inflation rates, and
consumer behavior.
• In the domain of production and operations, forecasting is indispensable. Even though the
production department follows the sales program generated by the marketing team, it must
independently forecast:
 The machine capacity required
 The materials needed for production
 The time required to meet delivery deadlines
• This requires analyzing historical production data to predict future resource needs accurately.
Factors Considered in Forecasting

• Creating a reliable forecast involves examining both:

1. Controllable factors: internal elements like production capacity, labor
availability, and pricing.
2. Uncontrollable factors: external elements such as economic conditions,
government policy, and market competition.
•The interplay of these factors directly affects how accurately a business can predict
demand and respond to it.
Importance of Forecasting in
Business
• Sales forecasting is one of the most critical activities in business operations. All other
business and industrial activities revolve around the forecasted sales volume. In essence:
1. It provides direction for production and procurement.
2. It helps in setting pricing, inventory, and marketing strategies.
3. It enables effective human resource planning, including recruitment, training, and
compensation.
4. It ensures that right quantities are produced, at the right time, at reasonable
cost, and with satisfactory quality.
• By anticipating demand, a business can maximize efficiency, reduce waste, and meet
customer expectations effectively.
Types of Forecasting Based on Time
Horizon
• The time range selected for forecasting depends on the specific objective. Forecasts are commonly
divided into three categories and each of these forecasting types supports different levels of
decision-making and is selected based on forecast purpose, complexity, and required
accuracy.
1. Short-Range Forecasting
 Duration: 1 week to 2 months
 Use: Primarily useful in production planning and daily scheduling
 Emphasis: High accuracy due to proximity to the present
2. Medium-Range Forecasting
 Duration: 3 to 6 months
 Use: Useful in workforce planning, materials procurement, and budgeting
3. Long-Range Forecasting
 Duration: 1 year and beyond
 Use: Helps in strategic planning, capital investment decisions, and product
development,

The purpose of long-range forecast

(i) To work out expected capital expenditure for future developments or to acquire new
facilities,
(ii) To determine expected cash flow from sales,
(iii)To plan for future manpower requirements,
(iv)To plan for material requirement,
(v) To plan for Research and Development. Here much importance is given to long range
growth factor.
Purpose Medium Range Forecasting

(i) To determine budgetary control over expenses,

(ii) To determine dividend policy,
(iii)To find and control maintenance expenses,
(iv)To determine schedule of operations,
(v) To plan for capacity adjustments.
Purpose of short-term forecast

(i) To estimate the inventory requirement,

(ii) To provide transport facilities for despatch of finished goods,
(iii)To decide workloads for men and machines,
(iv)To find the working capital needed,
(v) To set-up of production run for the products,
(vi)To fix sales quota
(vii)To find the required overtime to meet the delivery promises.
Factors Influencing Forecast

(i) Environmental changes,

(ii) Changes in the preference of the user,
(iii)Number of competitive products,
(iv)Disposable income of the consumer.
Factors to consider in forecasting the
production
(i) Demand from the marketing department
(ii) Rate of labours absenteeism
(iii)Availability of materials
(iv)Available capacity of machines
(v) Maintenance schedules
(vi)Delivery date schedules.
Steps in Forecasting
1. Determine the objective of the forecast: Clearly explain why the forecast is
needed, such as predicting demand, understanding customer preferences, or identifying
trends.
2. Select the period of the forecast: Decide whether the forecast will cover a short-
term, medium-term, or long-term period, depending on the business needs.
3. Choose the forecasting method: Select a method based on the time period, data
availability, and the purpose of the forecast.
4. Gather the necessary data: Collect data from internal records (primary sources) or
external publications and reports (secondary sources).
5. Make the forecast: Use the selected method to analyze the data and produce results
that can guide future business actions.
Forecasting Methods
1. Survey of Buyer’s Intentions (User Expectation Method): This method collects
direct feedback from customers about their future purchase plans. It is best for short-term
forecasts and new product launches, offering accurate insights based on real customer input.
2. Collective Opinion (Sales Force Composite Method): Sales staff predict sales in their
areas, and managers combine these forecasts. It uses the frontline knowledge of sales teams
and creates ownership and accountability.
3. Group Executive Judgement: Senior executives from different departments share their
insights to create a combined forecast. It is useful when data is limited and cross-functional
input is needed.
4. Expert Opinion Method: External specialists like analysts or consultants provide market
insights. This is helpful when entering new markets or dealing with unfamiliar products.
5. Market Test Method: A product is launched in a small market segment to observe
demand. Results help predict overall performance while minimizing risk.
6. Trend Projection Method (Time Series Analysis): Past sales data is analyzed to
identify patterns and project future demand. It assumes that trends will continue and works
well for stable, mature products.
7. Moving Average Method: This method averages past sales over a fixed time to smooth
out short-term changes. It is useful for products with seasonal or cyclical patterns and
requires consistent time-based data.
Criteria for a Good Forecasting
Method
1. Accuracy: A forecast must provide dependable figures since major business plans rely
on them.
2. Simplicity: The method should be easy to understand and apply, even by non-
experts.
3. Economy: Costs of applying the method should be justified by its usefulness and
accuracy.
4. Availability of Data: It should rely on data that can be easily and quickly gathered.
5. Stability: The method should produce reliable results even when market conditions
vary.
6. Utility: Forecast results should be actionable and useful for decision-making in
production, marketing, and staffing.
Material Requirements Planning
• MRP refers to a planning technique that calculates the materials and components needed
to produce a final product.
• It helps determine what is needed, how much is needed, when it is needed, and when to
order each item.
• MRP works backward from the master production schedule, breaking down end-item
requirements into component needs.
• MRP is part of a broader information system that supports planning and controlling both
production and purchasing operations.
• It helps managers schedule orders more effectively by showing the priority of tasks and
timing of material flows.
• MRP is a technique for determining the quantity and timing of items with dependent
demand based on master production schedules.
• When used properly, MRP becomes a powerful tool for achieving effective manufacturing
control.
MRP Objectives
1. Inventory reduction: MRP ensures materials and components are ordered only
when needed, preventing excess stock and reducing storage costs.
2. Reduced manufacturing and delivery lead times: MRP identifies what is needed
and when, helping to avoid delays and prioritize production tasks based on customer
deadlines.
3. Realistic delivery commitments: MRP provides accurate delivery timelines,
allowing the production team to give reliable information to the marketing or sales
team.
4. Increased efficiency: MRP coordinates activities across work centres, ensuring a
smooth flow of materials and improving the overall efficiency of the production
system.
Functions served by MRP

1. Order planning and control: When to release orders and for what quantities of
materials.
2. Priority planning and control: How the expected date of availability is compared to
the need date for each component.
3. Provision of a basis for planning capacity requirements and developing a broad
business plan.
Advantages and Disadvantages of
MRP
Advantages Disadvantages
1. Weak management support: MRP fails
1. Reduced inventory without full backing from top leaders.
2. Reduced idle time 2. Seen as standalone system: Some
firms misuse it as a complete solution,
3. Reduced set up time
not part of a bigger system.
4. Ability to change the master production 3. Poor fit with JIT: MRP doesn’t always
schedule work well with just-in-time methods.
4. Needs accurate data: Requires
5. Ability to price more competitively
constant updates and changes in how
6. Better customer service the firm operates.
7. Better response to market demands 5. Rigid schedules: Hard to adjust plans
once MRP sets them.
8. Reduced sales price
Inventory Control
• Inventory refers to the quantity of goods such as medicines, surgical items, and patient care
supplies kept in stock.
• Inventory control (also known as stock control) means regulating the stock and flow of materials
and components in an efficient, effective, and economical way.

Objectives of Inventory Control

1. Protection against fluctuating demand
2. Better use of resources, especially finance
3. Control of stock volume
4. Control of stock distribution
5. Balance of different products in stock
6. Maximum customer service
7. Accurate stock record-keeping
Methods of Controlling Stock
• Maximum Level: The highest quantity allowed in stock to avoid extra costs or
damage due to limited space.
• Re-order Level: The point at which a new order must be placed to avoid stockouts,
especially for fast-moving items.
• Danger Level / Warning Level: A low level where urgent action is needed to speed
up deliveries and avoid disruption.
• Minimum Level: The point where using more stock means tapping into reserved or
buffer stock.
• Zero Level / Exhaust Bin Level: No stock remains. This situation must be avoided to
prevent stoppages.
Methods of Inventory Techniques
1. ABC Analysis – Always Better Control
• A technique that ranks inventory items based on their annual consumption value,
helping apply different control levels to different item categories.
• A Items – Highly Important: High-cost items; about 10% of items but 70% of value.
Need tight control, frequent small orders, and close tracking by senior staff.
• B Items – Moderately Important: Mid-value items; around 20% of items and value.
Require balanced control by experienced staff.
• C Items – Least Important: Low-cost, high-quantity items; about 70% of items but
only 10% of value. Managed with minimal oversight to reduce costs.
Advantages and Disadvantages of
ABC Analysis
Advantages Disadvantages
 Controls capital investment in high-  Ignores non-monetary factors like
value items urgency or life-saving value
 Supports better resource allocation  Requires ongoing data analysis and
 Encourages accurate tracking of critical classification
stock  Conflicts with traditional cost
 Ensures availability of essential items accounting methods
while minimizing excess in non-critical  Involves additional resources for
ones maintenance and updates
Methods of Inventory
Techniques .Ctd
2. VED Analysis – Vital, Essential, Desirable
• VED analysis ranks inventory items based on functional importance rather than cost. It is
especially useful in healthcare and emergency services.
• Vital (V): Life-saving items that must always be in stock. Their absence poses serious
clinical risk. Example: adrenaline for anaphylactic shock.
• Essential (E): Important for treatment but not critical for survival. Short delays can be
tolerated, but regular availability is preferred.
• Desirable (D): Items used for minor or non-urgent conditions. Their absence does not
affect critical care. Useful for patient comfort and service quality.

Alternative Classifications
• Some systems use VEN (Vital, Essential, Non-essential)
• Others include Category 1: Essential, Category 2: Basic, Category 3: Complementary
medicines
Methods of Inventory
Techniques .Ctd
[Link] Time in Inventory Management
• Lead time is the total time between placing an order and receiving items into inventory. It
is crucial for maintaining stock, especially for critical and fast-moving goods.
Components of Lead Time
• Servicing Time: Time spent on creating purchase orders, collecting quotations, and
finalizing contracts.
• Delivery Time: Time taken by the supplier to manufacture, pack, and dispatch the
goods.
• Receiving Time: Time used for inspection, unpacking, recording, and storing the
items.
• Lead time is generally shorter in developed countries due to efficient logistics and better
communication systems.
• In contrast, developing nations may face unpredictable lead times due to infrastructure
and bureaucratic limitations.
• Lead time should influence re-order levels and safety stock planning.
Methods of Inventory
Techniques .Ctd
4. Safety Stock (Buffer Stock)
• Safety stock is the extra quantity of inventory kept to prevent stock-outs caused by supply
delays or unexpected demand.

Purpose of Buffer Stock

• Protects against supply issues: Covers delays from strikes, holidays, or shipping
problems.
• Prevents disruptions: Ensures continuous production or service during reordering.
• Supports customer satisfaction: Maintains service quality during demand spikes.
• Acts as emergency reserve: Useful during crises like disasters or disease
outbreaks.
• It is crucial in healthcare and public services where shortages can risk lives
• It is determined by Demand variability, supply reliability, and lead time.
Methods of Inventory
Techniques .Ctd
5. Economic Order Quantity (EOQ)
• EOQ is a method used to find the ideal order quantity that minimizes the total cost of
ordering and holding inventory.
Key Cost Components
a) Ordering Cost: Includes admin tasks like preparing orders, getting quotes, and
following up. These costs go up as order frequency increases.
b) Carrying Cost: Covers the cost of storing inventory, such as rent, insurance,
spoilage, and tied-up capital. These rise when too much stock is held.
• EOQ balances both costs to decide how much to order and when to order, helping
reduce waste and avoid stockouts.
• It Leads to cost-effective purchasing and smooth inventory control.
Delivery Schedules
• Delivery schedules are detailed plans showing when and how goods or services will be
delivered. They help align supply with demand and support smooth operations.
• They reduce lead times, prevent stockouts, and improve the flow of materials in
production or service processes.

Objectives of Delivery Scheduling

• Ensure timely delivery: Meet production or customer deadlines without delay.
• Coordinate activities: Align procurement and distribution across departments.
• Reduce waiting time: Keep production moving without unnecessary pauses.
• Minimize holding costs: Avoid overstocking and understocking.
• Use resources efficiently: Optimize transport and labor use.
• Prevent stoppages: Ensure materials arrive before production halts.
Types of Delivery Schedules
a) Fixed Delivery Schedules: Deliveries are made at regular intervals, such as daily,
weekly, or monthly. This method is suitable when demand is stable and predictable,
allowing for easy planning and coordination. However, it can lead to overstock or shortages
if demand changes unexpectedly.

b) Flexible (Variable) Delivery Schedules: Deliveries are adjusted based on real-time

demand or changing production needs. This type works well for businesses with seasonal
or unpredictable orders. It helps reduce inventory costs but requires strong communication
with suppliers and a responsive logistics system.

c) Just-in-Time (JIT) Delivery Schedules: Goods arrive exactly when needed for use in
production or service. This reduces the need for large inventories, saving on storage and
waste. JIT is ideal for lean and efficiency-driven systems, but it relies heavily on timely
delivery — any delay can stop operations.
Components of an Effective
Delivery Schedule
a) Item identification: What products or materials need delivery
b) Quantity: How much is required per delivery cycle
c) Delivery frequency: How often deliveries should occur
d) Time window: Preferred or allowable delivery time slots
e) Lead time: The required gap between order placement and delivery
f) Buffer time: Extra time built into the schedule to handle delays
g) Delivery location: Specific receiving points (warehouse, production unit, branch)
Factors Affecting Delivery
Schedules
1. Customer Demand Patterns: delivery schedules must match demand trends; stable
demand allows fixed plans, while variable demand requires flexibility to avoid stockouts
or overstocking
2. Supplier Reliability and Capacity: consistent and capable suppliers support timely
deliveries, while unreliable ones may cause delays that affect operations.
3. Transportation Availability and Efficiency: smooth and timely delivery depends on
vehicle availability, infrastructure quality, and traffic conditions.
4. Production Timelines and Batch Sizes: deliveries should align with production
needs to avoid early congestion or delays that disrupt workflow.
5. Geographical Distance and Route Planning: long distances and poor routing can
delay deliveries, while efficient route planning improves timing and reliability.
6. Inventory Levels and Stock-out Risks: low stock levels require more precise
deliveries; high stock increases holding costs but reduces urgency.
7. Weather Conditions and Unforeseen Disruptions: factors like storms, strikes, or
emergencies can impact delivery schedules, requiring flexibility and backup plans.
Delivery Scheduling Tools and
Techniques
1. Material Requirements Planning (MRP): Automates delivery schedules based on
production plans
2. Enterprise Resource Planning (ERP): Integrates delivery planning with broader
business functions
3. Transportation Management Systems (TMS): Optimizes routes, delivery times,
and logistics costs
4. Electronic Data Interchange (EDI): Allows real-time communication between
suppliers and buyers
5. Delivery Gantt Charts or Calendars: Visual tools to track and monitor scheduled
delivery dates
Steps to Create an Effective
Delivery Schedule
1. Collect Order Information: Gather all confirmed orders, delivery addresses, and promised
deadlines.
2. Group by Geography: Cluster orders that are in proximity to each other to minimize travel
distance.
3. Determine Capacity: Assess the capacity of your vehicles (weight volume) and the availability
of drivers.
4. Plan Routes: Use tools like maps or route optimization software to sequence deliveries
efficiently.
5. Assign Resources: Match routes to vehicles and drivers based on capacity, skills, and
availability.
6. Communicate: Share the schedule with drivers, customers, and relevant team members.
Provide customers with tracking updates.
7. Monitor and Adjust: Track progress in real-time. Be prepared to adjust for traffic, weather, or
Challenges in Delivery Scheduling

1. Inaccurate demand forecasting leading to early or late deliveries

2. Supplier non-compliance with agreed delivery windows
3. Poor coordination between purchasing, logistics, and production departments
4. Lack of flexibility in rescheduling during disruptions
5. High costs from emergency or expedited deliveries
Best Practices

1. Develop strong relationships with suppliers to ensure schedule adherence

2. Use real-time tracking and alert systems for proactive communication
3. Maintain minimum buffer stock for critical items to absorb minor delays
4. Review and adjust schedules regularly based on performance and feedback
5. Integrate delivery schedules with procurement and production planning
Network Analysis
• Network analysis is a planning and scheduling method that shows the sequence and
timing of project activities to improve control and decision-making.

Purpose and Importance for Small Enterprises

1. Visualize the Project: provides a clear diagram of all tasks and their dependencies.
2. Identify Critical Path: highlights the task sequence that determines the shortest
completion time.
3. Optimize Resources: ensures efficient use of time, labor, and materials by avoiding
delays and overlaps.
4. Manage Uncertainty: supports "what-if" analysis to prepare for possible disruptions
and delays.
5. Improve Scheduling: helps create realistic time and cost estimates for business
projects and operations.
Key Components of Network
Analysis
1. Activity: A specific task or work package that consumes time and resources (e.g.,
"Design Prototype").
2. Event (Node): A point in time representing the start or completion of one or more
activities.
3. Dependency: A relationship between activities where one must start or finish before
another can begin.
4. Path: A sequence of connected activities from the start to the end of the project.
5. Critical Path: The longest path through the network, determining the shortest possible
project duration. Any delay in tasks on this path delays the entire project.
6. Slack/Float: The amount of time a non-critical task can be delayed without affecting the
project deadline.
Steps to Perform Network Analysis
1. List Activities: Identify all tasks required to complete the project.
2. Determine Dependencies: Define the order of tasks (e.g., Task B cannot start until Task A
finishes).
3. Estimate Durations: Predict the time required for each activity.
4. Draw the Network Diagram: Represent activities and dependencies visually using nodes and
arrows.
5. Identify Paths and Calculate Times: Find all paths from start to end and calculate the total
duration for each.
6. Find the Critical Path: Identify the path with the longest duration.
7. Calculate Slack: Determine slack time for non-critical activities.
8. Monitor and Update: Track progress and adjust the network as needed during project
execution.
Techniques of Network Analysis
a) Critical Path Method (CPM): used when the duration of each activity is known and
fixed. It helps identify the longest path of dependent tasks, known as the critical path,
which determines the minimum time needed to complete the project. CPM is ideal for
predictable, routine projects like construction or equipment maintenance. It also
calculates float or slack time, showing which tasks can be delayed without affecting
overall deadlines.
b) Program Evaluation and Review Technique (PERT): suitable for projects where
activity durations are uncertain. It uses three time estimates for each task: optimistic,
most likely, and pessimistic. These are used to calculate an expected time through
weighted averages. PERT is useful in R&D, product design, and service innovation,
helping managers deal with unpredictability and plan for risks more effectively.
c) Graphical Evaluation and Review Technique (GERT): a flexible and advanced
method that allows for conditional paths, loops, and repeated activities. Unlike CPM and
PERT, GERT can include It is often used in software development, decision points and
probability-based outcomes. simulations, and diagnostic processes where some tasks
may be skipped or repeated based on results.
Benefits of Network Analysis
a) Efficient Planning: It allows precise scheduling and sequencing of tasks, helping project
managers develop realistic timelines.
b) Early Detection of Delays: By identifying critical activities, managers can monitor them
closely and take preventive action if delays occur.
c) Better Resource Allocation: Knowing which tasks are critical and which have slack allows
flexible and cost-effective resource deployment.
d) Improved Communication: Visual networks offer clear understanding among team members
and departments about their responsibilities and deadlines.
e) Enhanced Control: Progress can be measured against planned timelines, enabling corrective
action and continuous monitoring.
f) Project Transparency: Stakeholders can see the overall structure, timeline, and constraints of
the project at a glance.
Limitations of Network Analysis

a) Dependence on Accurate Data: For results to be reliable, time estimates and task
sequences must be accurate. Errors in input can lead to misleading results.
b) Complexity in Large Projects: For projects with hundreds of activities, network
diagrams can become difficult to manage and interpret.
c) No Direct Resource Optimization: Basic network analysis does not account for
resource limits or conflicts unless combined with resource levelling techniques.
d) Needs Constant Updating: Project conditions can change, requiring frequent
updates to the network for it to stay relevant.
e) Limited Handling of Uncertainty (in CPM): While PERT accounts for uncertainty,
CPM assumes fixed activity durations, which may not reflect real-life variability.
Activity Scheduling
• activity scheduling is the process of assigning start and end times to production or
service operations. It follows routing and aims to use machines and labor efficiently
without overloading them
• The goal is to optimize resource use, maintain a smooth workflow, and meet delivery
deadlines with minimal delays or idle time.
• Scheduling defines what work to do, when to do it, and in what order, helping balance
workloads and support timely output.

Interrelation Between Routing and Scheduling

• Routing: determines the sequence of operations required to complete a task.
• Scheduling: sets the timing for each operation along that route.
• Link: routing cannot be effective without accurate scheduling, and scheduling depends
on routing to estimate task durations.
Together, they prevent bottlenecks and ensure efficient production flow.
Principles of Scheduling

These principles collectively improve production flow, minimize delays, and support
operational efficiency.
1. Optimum Task Size: Scheduling tends to achieve its maximum efficiency when the
task sizes are small and all tasks are of the same order of magnitude.
2. Optimum Production Plan: Scheduling tends to achieve its maximum efficiency
when the
• work is planned, so that it imposes an equal/even load on all the plants/facilities.
3. Optimum Operation Sequence: Scheduling tends to achieve its maximum
efficiency when the work is planned so that the work centers are normally used in the
same sequence.
Scheduling Systems
Scheduling systems can be classified into three broad categories based on the nature of production:
1. Unit Scheduling System
•Used when jobs are produced one by one and are highly customized. This system applies mainly to job
production environments.
a. Project Scheduling
•A project consists of several interdependent activities often managed by different departments or supervisors.
Examples include shipbuilding and railway coach manufacturing. Common methods used include ; Project
Evaluation and Review Technique (PERT), Critical Path Method (CPM), Graphical Evaluation and Review
Technique (GERT)
•Tools like Gantt charts, milestone charts, and bar charts may also be used, though they are generally less
effective than network methods.
b. Job Shop Scheduling
•This deals with scheduling diverse jobs across multiple machines. Each order is unique, and production
planning begins only after receiving the customer order. Routing and scheduling are highly customized to each
job.
Scheduling Systems .Ctd

Factors influencing job shop scheduling:

a) Arrival Pattern: Orders may be processed as they arrive (First-In-First-Out), or
grouped and prioritized by delivery dates (static situation).
b) Processing Pattern: With duplicate or flexible machines, planners evaluate various
routes for optimal flow. Backtracking may occur due to limited resources.
c) Machine Variety: Machine size, precision, and capacity influence scheduling
decisions.
d) Labor Availability: In labor-limited shops, scheduling revolves around available
workers. In machine-limited shops, machine availability dictates the schedule.
e) Order of Sequencing: Scheduling also depends on sequencing rules.
Scheduling Systems .Ctd

2. Batch Scheduling System

•Used when jobs are manufactured in batches or lots. Products may be made to order or
for stock, and setups change between batches. This system is common in medium-scale
manufacturing or where moderate variety and volume exist.

3. Mass Scheduling System

•Applied in mass production environments where large quantities of a few standardized
products are produced continuously. Scheduling aims to maintain uninterrupted flow and
minimal inventory.
Sequencing Rules for Single Facility
a) First In First Out (FIFO): jobs are processed in the order they arrive; follows
standard queue discipline.
b) Shortest Processing Time (SPT): jobs with the shortest time required are
processed first to reduce queue buildup.
c) Minimum Due Date (MDD): jobs with the earliest due dates are prioritized to help
meet delivery commitments.
d) Last In First Out (LIFO): the most recently arrived job is processed first; common in
inventory systems.
e) Static Slack for Remaining Operations (SSRO):Jobs are prioritized by static slack
= (Time till due date – total processing time) / number of remaining operations.
f) Dynamic Slack for Remaining Operations (DSRO):Jobs are prioritized by dynamic
slack = (Time till due date – expected time of remaining operations) / number of
operations.
Basic Scheduling Problems

The production planner may face certain problems while preparing production plans or
Schedules. Some important problems are discussed below:
a) Flow production scheduling for fluctuating demand (known smoothening problem),
b) Batch production scheduling, when products are manufactured consecutively,
c) The assignment problem,
d) Scheduling orders with random arrivals
e) Product sequencing.
Elements of Scheduling
1. Demand Forecasts / Customer Orders: determine delivery dates by analyzing future
demand and firm customer commitments.
2. Aggregate Scheduling: prepares a tentative plan for monthly or quarterly output,
aligning demand with available capacity using rough-cut capacity planning.
3. Production Plan: outlines planned output levels, required resources, inventory levels,
and any capacity constraints.
4. Master Production Schedule (MPS): specifies what to produce, when, and how much,
typically broken into daily, weekly, or monthly targets.
5. Priority Planning: breaks down the MPS into parts and components required for
production, guiding material and resource planning.
6. Capacity Planning: determines how jobs are assigned to specific work centres or
machines over a set period to avoid overloading
7. Facility / Machine Loading: assigns jobs to machines based on priority rules, ensuring
proper use and balancing of resources.
8. Evaluation of Workload: assesses load across work centres; excess load is shifted to
underutilized machines to avoid bottlenecks.
9. Sequencing: arranges job priorities to ensure smooth workflow, reduce production
delays, and minimize operational costs.
Just-In-Time Operations
• JIT is a production philosophy focused on eliminating waste by ensuring that materials and products
arrive only when needed—not before or after.
• The goal is to deliver the right product, with the right quality, at the right time, based entirely on
customer demand.
Core Objectives of JIT
• Produce only what customers want: match production closely with actual demand to avoid
overproduction.
• Produce only as quickly as needed: prevent early or late output by aligning with the customer's
usage rate.
• Produce with perfect quality: aim for zero defects to avoid rework or waste.
• Minimize lead time: shorten the time from order to delivery by removing delays and inefficiencies.
• Produce only desired features: avoid unnecessary features; focus on customer-specified
requirements only.
• Eliminate all forms of waste: reduce waste in labour, materials, time, and space, ensuring every
action adds value and no idle inventory remains.
• Produce with methods that reinforce the occupational development of workers.
Overview of JIT manufacturing
1. Inventory Reduction: JIT lowers inventory levels at all stages—raw materials, work-in-
progress, and finished goods—to reduce storage costs and waste.
2. Quality Improvement: the system promotes consistent quality enhancement, both
inside the organization and through its supplier network.
3. Lead Time Reduction: JIT reduces setup times, movement delays, and overall process
time, leading to faster delivery and greater responsiveness.
4. Vendor Control / Performance Improvement: fewer suppliers are used, but each
handles larger volumes, giving the buyer more control and allowing for stricter delivery and
quality standards.
5. Continuous Improvement: JIT encourages ongoing problem-solving by constantly
identifying and addressing existing and emerging issues in the production process.
6. Total Preventive Maintenance: regular maintenance is emphasized to avoid
breakdowns, minimize downtime, and ensure a smooth production flow.
7. Strategic Gain: JIT helps firms achieve a sustainable competitive advantage by
enhancing efficiency, quality, and responsiveness to market changes.