Chemical Engineering August 2013 - 43

TABLE 1. INVENTORY DATA AND FACTORY CAPACITY FOR CASE STUDY 1
Month
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
Inventory
(containers) 5 5 10 10 15 5 5 10 15 20 10 5 115
Factory
capacity 20
20
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
20 containers
Source composite curve
20 containers
20
60
20 containers
Sink composite curve
10
20 30 40 50 60 70 80 90 100 110 120
Number of containers
FIGURE 2. This PPPD for case 1 (noni factory) is not feasible because the part of
the source composite curve is below the sink composite curve
Outsourced: 60 containers
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
10
20 containers
Sink composite curve
20 containers
Pinch October
Source composite curve
20 containers
Excess: 5
containers
20 30 40 50 60 70 80 90 100 110 120
FIGURE 3. This feasible PPPD is obtained by horizontally shifting the source composite
curve of Figure 2 to the right
21]. In many management extensions
of pinch analysis, time is used as the
quality index [11, 18-20].
In this article, two novel graphical
techniques for production planning are
proposed, namely production planning
pinch diagram (PPPD) and production
planning grand composite curve
(PPGCC). These new production planning
tools can be used to optimize factory
capacity and financial resources,
which are common challenges in most
companies. Such problems are particularly
critical for small and medium enterprises
(SMEs), which typically are
heavily constrained by limited capital
resources. The problem arises when a
company or facility is maximizing the
use of its company resources, such as
inventory or the factory capacity, while
minimizing outsourcing by reducing
idle space or excess factory capacity.
This goal implies the minimization of
additional costs.
Large or multi-national companies
(MNC) usually acquire adequate
space for future expansion of plants
and warehouses, and purchase machines
that are custom-made to meet
their production capacities (the machines
sometimes cater for expansion,
too). On the other hand, SMEs have
relatively limited financial resources,
and thus tend to rent readily available
industrial spaces as production
units that are readily available in the
market. Therefore, proper production
planning in SMEs presents unique
challenges. With these newly developed
tools, SMEs will be able to handle
the production planning problems
more effectively.
Underlying principles
The basic principle of the newly developed
graphical techniques is based on
the work of Ooi and colleagues [17],
which was originally developed for
CO2 capture-and-storage planning
problems. In order to address the problem
of production planning, we shall
first identify the production sinks and
the sources of the planning problem.
Production sinks are defined as
the units or sections that demand resources.
Production sources are units
or sections that contain the resources.
For instance, production of " noni " powder
(a nutritional product extracted
from the tropical fruit, Morinda citrifolia)
is treated as a sink that requires
production space. On the other hand,
factories are treated as sources, as
they can be used to satisfy the production
requirement of the goods. In this
context, sources may be viewed as providing
services (for example, production
space) to the sinks. The overall
concept is illustrated in Figure 1.
Although supply and demand of
goods are typically beyond the manufacturer's
control to a certain extent,
control of time and capacity adaptation
is still possible. Note that production
capacity or factory space can either
be fixed or variable. For instance,
if a factory is located in a standard
industrial lot with fixed dimensions,
it is classified as a fixed capacity/variable
time problem. On the other hand,
cases where the factory, or production
units are flexible (that is, if the manufacturer
could acquire them according
to their exact requirements) can be
classified as a variable capacity/variable
time problem. For example, such
cases usually occur in pharmaceutical
and allied industries. Both cases are
illustrated in the following industrial
case studies. The objective of the proposed
approach is to determine the
minimum outsource requirement. To
fulfill the objective, the PPPD and
PPGCC are used, and are illustrated
using the following case studies.
Case Study 1
We first consider an example involving
production planning for a powderproduction
factory. This case study
describes a food processing factory
that produces noni powder that is
dried at very low temperature using
infrared drying technology. Table 1
shows the forecasted inventory data
based on the previous year's record.
In this case study, a production campaign
across a one-year planning horizon
is considered.
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