Introduction to Industrial Engineering
By Jane M. Fraser
Operate a production system
Return to the Table of Contents.
Recall that the previous chapter was about selection
and organization of the physical assets of the organization.
Now that the production system has been set up, we need
to discuss how to operate it.
This chapter is about the operating rules for the production system.
One difference between the previous chapter and this one is in the amount of
time that a decision affects the organization. Building a new facility
(Chapter 5) is a decision that usually affects the company for years and
takes money and time to change that decision. In this chapter, I’ll describe
decisions that usually affect the company for less time, and that take less
time to change, but even among these decisions, the time varies. Consider
- Select and commit to working with a supplier.
- Hire enough workers to run the operation for two shifts.
- Allocate planned production over the next month and schedule workers for
- Decide which particular jobs will be done on this week’s shifts.
- Begin work on a particular job on a particular machine by a particular team.
These decisions are all part of “operations management” and they have impact
over a shorter time period than the decisions in Chapter 5, but they still
vary in how long they affect the company.
This chapter is organized into the following sections. (This organization
follows closely that used by Turner et al.)
- 7.1 Forecasting
In chapter 5, we already discussed the issue of deciding on the size of an
operation. How big a steel plant? How big a hospital? How many fast food
restaurants in one area? How big a chip manufacturing plant. The answer to
those questions puts an upper limit on how much steel can be made, how many
chips can be made, how many patients can be served, and how many customers
can be served, but the organization still needs to forecast demand and make
adjustments to the work force, the resources ordered, and so forth.
- 7.2 Aggregate planning
With a forecast of overall demand, the organization now plans how it will
meet that demand, perhaps through building inventory during certain periods
or by adding temporary workers.
- 7.3 Operations planning
Now the organization gets more specific. Given the aggregate plan, how much
of which resources will be needed? Which supplier will deliver them? How
will work be allocated in the manufacturing process?
- 7.4 Supply chain and inventory management
When and where will incoming resources be received? How will finished
product be stored? Will subassemblies be made and used as orders are
- 7.5 Operations policies
Which order will be started at what time on which production equipment by
whom? Many other decisions about scheduling and other policies are needed
before operations can begin.
- 7.6 Operations
Once operations are underway, the IE still has some questions to answer.
How is the work proceeding? Is the schedule still working? How can we handle
any difficulties that arise? What information should we collect on the