Development of planning rules and an optimised Master Production Schedule for a new water and ice tea bottling plant

Abstract

The Clover group, a well-established branded consumer goods company in South Africa, has recently acquired a brand new water and ice tea bottling facility. In order to align the operations of this facility with the efficiency and effectiveness objectives of the Group as a whole, this facility requires a specially tailored optimised master production schedule (MPS). Infor Advanced Scheduler software, which is the software that the Group uses in all of their other manufacturing facilities for production scheduling, is used to develop this optimal production schedule. Some general production planning rules need to be developed as guidelines for the development of the optimal MPS. Accompanying the MPS, a job schedule that organises labour to ensure that the labour resources required are aligned with the production plan, is also required for this facility. Extensive literature studies focused at specifically sales and operations planning, capacity planning and operations research tools and techniques, specifically Mixed Integer Linear Programming (MILP) gives direction to the development of this MPS. In the first stages, sales and operations functions and rough cut capacity planning is used to identify production planning rules fitting the specifications of the facility in terms of equipment capabilities, available capacity, sales and demand forecasts and company-wide general rules and assumptions. After establishing the basic rules and parameters, all of the important factors that influence the MPS are systematically optimised, and a MILP to determine the optimal lot sizes for different scheduling alternatives is developed. All the optimised factors are then combined to develop two alternative production schedules, one that is a continuous production schedule of which the monthly schedule remains constant throughout the year. The second alternative, which resulted in the optimal schedule alternative, is a production schedule with one off-peak schedule followed for six months, combined with a peak schedule for the other six months. The peak and off-peak periods are identified through analysis of sales and demand forecasts for the coming year. Job schedules with different shift configuration alternatives are created for both of the schedule alternatives, and this is how the optimal schedule is selected, by evaluating the cost of labour associated with the selected MPS. All the alternative schedules are confirmed as feasible solutions, and the selected MPS alternative is optimal in terms of the determined lot sizes, average inventory holding cost and labour cost related to the accompanying job schedule. A sensitivity analysis is done to evaluate the rigidity of the MPS, should safety stock levels be adjusted, and the MPS proved to be rigid enough as the schedule would barely change based on production time required. The sensitivity analysis does prove that major cost savings can occur if safety stock levels are reduced, but future work on improving forecasting accuracy is recommended first. Other future work possibilities have emerged such as warehouse utilisation optimisation, distribution and procurement planning and optimisation and forecasting improvement. This project, along with future work recommendations are all ultimately aimed at developing and optimising the operations of the Clover Waters Facility, in order to manage resource constraints as efficiently and cost effectively as possible and satisfy customer demand.