Introduction of Capacity and Scheduling Under Process and Supply Chain

        Various business improvement methodologies are being adopted by organizations to improve the performance of their businesses. Supply chain design has been considered as a crucial factor for businesses so that competitive edge could be obtained. Since the early 1980s, supply chain design has received a considerable attention, still, the management of supply chains is needed to be well-understood particularly, and the necessity of conceptual frameworks and clear definitional constructs on design of supply chain have been highlighted by multiple researcher. A supply chain can be described as a relationships’ set among manufacturers, suppliers, retailers, and distributors that facilitates the raw materials’ transformation into finished products (Govil and Proth 2002). The following figure shows the Supply Chain Process

        Although a supply chain is consist of various business components, it itself is observed as a single entity. Researchers and practitioners traditionally have limited their research scope and analyses within the larger chain to individual stages, however, have recently recognized the requirement for an integrated approach to the design of the manufacturing system. The framework of the supply chain, consequently, has emerged as a significant component of this integrated and new approach (Mauergauz 2016). The following image shows the supply chain planning matrix

    Furthermore, the organizations having supply chain design as a core business strategy consider capacity as a significant measure to make it sure that facility has enough capacity. There are various software programs such as ERP (Enterprise Resource Planning) as well as WMS (Warehouse Management Systems) use formulas to compute throughput based depending on capacity. Usually, organizations use two capacity measures i.e. rated and theoretical (Kouvelis and Su 2008).

    In addition, scheduling in supply chain design involves decision making regarding the available resources or capacity allocation such as space, labor, and equipment to activities, jobs, customers or tasks over time. Thus scheduling results in a schedule of activities, or time-phased plan. The schedule of supply chain design indicates what, when, and by who is to be done, and with what equipment (Shepherd and Günter 2010). The following elements are necessary for detailed efficient supply chain schedule:

Shift-by-shift, day-to-day scheduling of work centers and production machines

Scheduling an upstream operations’ dependencies

Sequencing that is cost-effective and based on various characteristics such as weight, color, size, and more

Matching order and production with due dates and availability of raw material inventory

This paper briefly evaluates the capacity and scheduling under process and supply chain design in the following section:

Capacity and Scheduling Under Process and Supply Chain Design

Supply Chain Design Capacity Strategies

        There are three major capacity strategies within manufacturing and production management and supply chain optimization that different organizations use when the increased demand is observed. Most detailed supply chain planning’s level is all about the production scheduling. It includes optimization in the horizon of near-term planning. This horizon’s length may vary to a few weeks from hours up, and this length depends on the business type. Orders and operations are allocated by a planning on the factory floor to several production resources. Resources, in this context, can include tools, machinery, skills, or personnel (Govindan, Fattahi and Keyvanshokooh 2017). Following are the three major capacity strategies:

Lead Capacity Strategy of Capacity and Scheduling Under Process and Supply Chain

            The lead capacity strategy, as suggested by its name, adds capacity before the occurrence of actual demand. This capacity strategy is often being used by the organizations, as a company by this strategy is allowed to increase the production level at a time when a plant of manufacturing demand is not very large. If any problem arises during the process of increasing production, then it can be dealt with so that the plant of manufacturing is nearly ready when the demand arises. Lead capacity strategy minimizes the risk this is why the organizations prefer this approach. Organizations try their best not to fail to meet dates of delivery because of the lack of capacity because customer satisfaction is now the most important concern of businesses (Sawik 2016). One more benefit of a lead capacity strategy is that businesses are given a competitive advantage through this strategy. For instance, if a manufacturer of some toy believes that for the Christmas period, some particular good will be a popular seller, then that manufacturer will increase the capacity of that particular good prior to an anticipated demand so that the product is in stock while “catch up” would be played by other manufacturers. Though, there are some risks associated with the lead capacity strategy. The organization could find itself quickly with unwanted inventory in the case when the demand does not materialize, and the organization may have to face unnecessarily expenditure of ramping up capacity (Shepherd and Günter 2010).

Lag Capacity Strategy of Capacity and Scheduling Under Process and Supply Chain

    A lag capacity strategy is an opposite approach of the above two strategy i.e. lead capacity strategy. The organization with the lag capacity strategy will increase its capacity only after the occurrence of demand. Although many organizations follow the lag capacity strategy, the success of this strategy is not guaranteed. Nevertheless, some advantages are associated to lag capacity strategy. Initially, this strategy decreases the risk of a company. The company, by delaying a significant capital expenditure and not investing at a lesser demand’s time, will have a more stable relationship with its investors and bankers. In addition, the company will keep earning more profit than its competitor companies that have done investment with increased capacity. There is one downside as well i.e. the company would face a time where the demanded product is not available until the capacity of that product has finally increased (Hall and Potts 2003).

Match Capacity Strategy of Capacity and Scheduling Under Process and Supply Chain

        In a match capacity strategy, the company tries to surge the capacity in lesser increments so that the increases in volume could coincide. Although match capacity strategy tries to minimize the under as well as overcapacity of the two approaches mentioned above i.e. lead strategy and lag strategy, the companies may get the worst of these two approaches as well, where the companies can find themselves under capacity and overcapacity at different time periods. In order to optimize the supply chain, the companies should be able to supply anything their customers that they want, exactly at the time when they want it, and achieve it by spending as less amount as possible. By taking advantage and understanding the production capacity and actual manufacturing of the company's facility, the businesses can achieve every important goal of its supply chain optimization. The significance of the economic objectives, environmental and balancing social design in companies as well as the development has been cultivated by several awareness growing for the optimal sustainable design of the supply chain includes in it. For enhancing the supply chain the companies must be try supply all things for their customers. It must be according to the time of the customer delivery. The company must be achieve it’s in less amount which is possible for the company (Nikolopoulou and Ierapetritou 2012).

Capacity Planning to Optimize Supply Chain 

Following are the various ways by which capacity planning can optimize the supply chain of a company.

Advantage of Scale Capacity and Scheduling Under Process and Supply Chain

        There are multiple businesses that fall into the trick of solely focusing on inventory costs or production. This is actually a myopic view that prevents businesses from considering the “hidden” expenses in a whole end-to-end supply chain design of the company. These factors involve transportation expenses between plants, taxes, and inventory storage within each plant. High performing multi-plant facilities, having capacity planning software, recognize the varying cost elements’ tradeoffs so that optimized decisions could be made across whole supply chains. For the supply chain of the multiple products, it is considered as the processes of the supply chain which is important more than finished goods. It’s not considered as the capacity of the entities, but it can be according to the nature of the capacity which can play a good role for managing the uncertainty and demand. The process of the inventory cost and production are occurs in all business and these cost are prevent the business from hidden claws of the business. This scale is the good fit for protecting any business from various problems related to production and inventory as well as inventory and production is the part of the supply chain. (Tomlin 2000).

Adaptability Capacity and Scheduling Under Process and Supply Chain

    Capacity planning consideration in relevance to the supply chain of businesses has become especially applicable to the companies that are handling different projects or sharing materials with other plants. Getting the production “footprint” facilitates the strategic decision of businesses that optimize its supply chain design. Demand for products, in line with a business cycle, shifts in different quantities or to new regions over time. If the company wants to remain in sync and profitable then adapting production footprint is the best option (Pishvaee and Torabi 2010).

Make vs. Buy Capacity and Scheduling Under Process and Supply Chain

    Manufacturing and production businesses put a significant amount of strategy as well as thought into decision making that how to distribute and generate their projects. A supply chain optimization’s key component is whether or not a company at any point will require to outsource its production. Understanding that the capacity of the business enables it to know when outsourcing can be helpful for the profitability and productivity of the company. When the supply chain capabilities of the companies are directly adjacent to its enterprise strategy then it can achieve a competitive edge. Supply chain software and modern capacity planning approaches make it possible for businesses to achieve a strong market position (Sawik 2016).

Process Supply Chain Scheduling

    Supply chain planning process can be streamlined and optimized with a powerful replenishment planning functionality, production scheduling, and procurement schedules. Supply chain planning and scheduling require highly instinctive supply chain monitor so that all interactions between orders, sales forecasts, current inventory levels, production schedules, and purchases could be analyzed.

Replenishment planning: replenishment algorithms and product formulations can be used to recommend as well as compute orders regarding just-in-time replenishment for raw materials considering the typical lot size and lead time from each supplier. Replenishment orders and raw material inventories are connected automatically to a simulator of the supply chain so that if the schedule of production changes, it is re-planned automatically. In the first step of the supply chain scheduling it follows the strategy of just in time which leads toward the plan the order according to the time which is given by supplier (Hall and Potts 2003).

Production scheduling: production scheduling leverages the robust simulation capabilities that enable major operating parameters’ modification such as yield values, equipment rates, and product transitions so that optimized candidate schedules could be created. Changes in schedule are incorporated automatically into the involved Supply Chain Monitor by which the schedules are allowed to determine effectiveness and feasibility immediately (Hall and Potts 2003).

Procurement scheduling: procurement scheduling creates requirements regarding procurement for each and every raw material    after developing the production schedules. It includes the all process of the production in which the process from raw material to the end product is includes. This is the major and very important process of the supply chain because in this process the quality matters a lot (Hall and Potts 2003).

    Supply chain process scheduling computes safety stock recommendations as well that are based on service levels of targeted customer, and compares levels of optimum inventory to levels of anticipated inventory that are based on existing policies of supply chain management. Furthermore, the highly accurate ATP (Available-To-Promise) capabilities are provided by the solution by synthesizing production schedules, inventory, forecasts, and orders so that availability for any moment could be computed in the future (Mauergauz 2016). Following are the optional add-on modules for Supply chain process scheduling:

Dynamic Scheduling

Management Dashboard (Edition of Supply Chain Planning)

Systems Connect

Distribution Scheduling

Supply Chain Focus on Scheduling and Planning

        Have an organized plan of risk is a key plan to focus on planning of supply chain and supply chain scheduling. The businesses should be focusing on processes that are able to simultaneously address various functions, and make it sure that the plans are coordinated between concerned business departments so that duplication of efforts could be minimized and conflicting objectives could be avoided. The process of planning is one the most important part of the business but supply chain plays vital role for the process of the planning and scheduling (Govindan, Fattahi and Keyvanshokooh 2017).

        While each and every process has some particular objectives, joined together, these processes can give a connected plan that links tomorrow with today. Master scheduling and production planning are the two approaches of considering the longer time horizon that so at various production entities, furthermore it can be applied to numerous facilities as well as just one plant (Mauergauz 2016). These two processes, in brief, seek to achieve the following five goals for long-term:

Project and plan production for future along with inventory positions of long-term.

Creating requirements for usage for raw material inventories and WIP (Work in Process).

Determine the asset requirements and long-term staffing for managing costs of labor.

Evaluate if the forecast and business plan can be met and excess capacity could be identified.

References of Capacity and Scheduling Under Process and Supply Chain

Govil, Manish, and Jean-Marie Proth. 2002. Supply Chain Design and Management: Strategic and Tactical Perspectives. Academic Press.

Govindan, Kannan, Mohammad Fattahi, and Esmaeil Keyvanshokooh. 2017. "Supply chain network design under uncertainty: A comprehensive review and future research directions." European Journal of Operational Research, Vol 263, Issue 1 108-141.

Hall, Nicholas G., and Chris N. Potts. 2003. "Supply Chain Scheduling: Batching and Delivery." Operations Research, Vol. 51, No. 4 509-679.

Kouvelis, Panos, and Ping Su. 2008. The Structure of Global Supply Chains. Now Publishers Inc.

Mauergauz, Yuri. 2016. Advanced Planning and Scheduling in Manufacturing and Supply Chains. Springer.

Nikolopoulou, Amalia, and Marianthi G. Ierapetritou. 2012. "Optimal design of sustainable chemical processes and supply chains: A review." Computers & Chemical Engineering, Volume 44 94-103.

Pishvaee, M.S., and S.A. Torabi. 2010. "A possibilistic programming approach for closed-loop supply chain network design under uncertainty." Fuzzy Sets and Systems, Volume 161 2668–2683.

Sawik, Tadeusz. 2016. "Integrated supply, production and distribution scheduling under disruption risks." Omega, Volume 62 131-144.

Shepherd, Craig, and Hannes Günter. 2010. "Measuring Supply Chain Performance: Current Research and Future Directions." Behavioral Operations in Planning and Scheduling 105-121.

Tomlin, Brian Thomas. 2000. Supply Chain Design: Capacity, Flexibility and Wholesale Price Strategies. Massachusetts Institute of Technology.