“Opening the door to improving efficiency”

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“Opening the door to improving efficiency”

-A study on efficiency in Production, focused on processing time-

By: J.W. Hummel Studentnr.: s1142364

Organization: Weekamp Deuren B.V.

Archimedesstraat 10 7701 SG Dedemsvaart Supervisors: Ir. M.K. Wijma

Drs. K. Steen

University: RijksUniversiteit Groningen

Faculty of Management & Organization

Specialization: Production & Service Management Supervisors: Dr. M.J. Land

Dr. E.P. Jansen Date: December 10, 2004

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“Challenges can be stepping stones or stumbling blocks.

It’s just a matter of how you view them.”

Author Unidentified

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rologue

To Whom It May Concern:

Because confidentially parts of this thesis are not public, some appendices are left out of the public version of this thesis.

J.W. Hummel

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reface

The work that lies in front of you is written as a part of my final thesis at Weekamp Deuren B.V. in Dedemsvaart. This thesis is the final project of my study in Business Administration at the RijksUniversiteit in Groningen.

I would like to thank everyone that supported me during my study and my final thesis.

I would like to say special thanks to Marco Wijma and Karel Steen, the supervisors of Weekamp Deuren B.V, who made it possible for me to conduct this research at their organization.

I would also like to thank Martin Land and Pieter Jansen, the supervisors of the university, who provided me with assistance, feedback and suggestions during the research.

At the end I would like to thank my parents, my brothers, my closest friends and my girlfriend for all the support and assistance I received from you. I hope to be able to pay you back once.

Jeroen Hummel

Dedemsvaart, October 2004

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anagement summary

This research is conducted at Weekamp Deuren B.V., a producer of wooden doors and windows. Weekamp has four production locations, one in the Netherlands, one in the Czech Republic and two in Indonesia. The production location in the Netherlands is divided into the departments ZKTP (Very Short-Term Planning), Mechanical SD, Mechanical Luxury, Finishing Luxury, CNC chisel centres, Manual Additions, Spray Coater, Final Assembly and Shipping.

The need for this research comes from the level of the costs of production in the Netherlands. Some of the operations that Weekamp executes can also be bought individually in the market, like the inserting of glass or the painting of a door. The cost price of some operations at Weekamp is even higher than the average selling price of those operations in the market. Therefore the efficiency of the production process is researched. This leads to the following research objective:

To be able to reach this objective the following question is answered:

The first approach to get an indication of the efficiency levels per department and to be able to determine the processing times per department, is to conduct time measurements.

Results from the measurements of the processing times are compared with the actual time used over 2003 to get an indication of the efficiency level per department. To determine these efficiency levels more accurately and to identify the types of inefficiency that are present, work samples are conducted. These work samples showed a distribution of time spent on value-adding activities, necessary non-value-adding activities and wasteful activities, which can in turn be divided into waste in transportation, waste from producing defects, waste of waiting, waste of motion and waste in processing. Based on the number and the costs of the wasteful hours, the rest of the research has been focussed on the Manual Additions department. The work samples showed that the wastes that are present

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The main objective of this research is to evaluate the production process of Weekamp Deuren in order to make a judgement on its efficiency as well as to give

recommendations to the management of Weekamp Deuren for possible improvements that can increase this efficiency.

What is the level of efficiency per department in the production process, what causes this possible inefficiency and what can be changed to improve the efficiency level per department?

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at this department are waste in transportation, waste from producing defects and waste of motion.

The two main causes of the waste in transportation that were found are the current layout of Production and the current way of transportation. The current layout does not comply with the physical flows between departments. There are restrictions for the layout of Production like the fixed positions of the Spray Coater department and the Shipping department and the position of the exhaust system. Efficiency can improve when the layout is changed in such a way that the layout is in correspondence with the most common physical flows between departments, while considering the restrictions that are present. The current way of transportation is very labour-intensive, especially before the doors are hanged into the rail system at the Spray Coater department. A less labour- intensive way of transportation could save employees a lot of time that can be spent on value-adding activities.

The waste from producing defects that is found at the Manual Additions department can be caused at every department of Production. Therefore the causes of waste from producing defects should be investigated at every department as well as at the production facilities in the Czech Republic and in Indonesia. Defects in production at Weekamp Deuren are caused by errors due to misunderstanding, errors in identification, errors due to amateurism, inadvertent errors and errors in forgetfulness. These errors could be prevented through better training of the personnel, regular as well as temporary employees, standardization of the work and the work procedures and the use of good, clear work instructions. A reduction of the variety of materials leads to less information on the work order, which makes the work orders easier to understand. The training of all personnel and the standardizing of the work and the work procedures makes sure that everyone knows what should be done with each situation. Another point of the training is that it is easier to transform temporary personnel into regular personnel. A totally different cause of defects comes from the fact that the products of Weekamp are made out of wood, a natural product that can cause problems with the quality. To remove this cause, source inspections are needed which locate quality problems at the source and than tries to change the situation at the source.

Waste of motion can be divided into unavoidable waste of motion, work-related waste of motion and non-work-related waste of motion. Waste of motion mainly consists of non- work-related waste of motion. Non-work-related waste of motion can be caused by lack of standards and procedures and by lack of commitment. There are formal rules and procedures formulated in an organizational manual about what is allowed and what isn’t during working hours at Weekamp. This organizational manual is not used properly by everyone to inform new employees. Therefore, it is hard for new and temporary personnel to get to know these unwritten rules and procedures. This should be part of the training of new and temporary personnel. The employees that do know the rules and procedures, but don’t follow them probably have a lack of commitment. This low level of commitment is caused by the high percentage of temporary personnel and the great deal of changes within the organization. Commitment can be raised by empowering the

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personnel and involving them more in several aspects of the organization. This can be done on several levels. Improving the level of involvement and commitment can not be forced to individuals. Therefore, a final solution for lack of commitment at personnel is to find ways to end the contract with those employees.

Further research is recommended on the methods of working at the Sales department and the Order Entry department, on the compatibility and usability of the present automation system, on the way of transportation at Production and on the layout of Production.

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Chapter 1: Weekamp Deuren B.V. 10

1.1 Introduction 10

1.2 The organization 10

1.3 The production process 10

1.3.1 Mechanical SD (Machinale SD) 11 1.3.2 Stabilized doors 11 1.3.3 Mechanical Luxury (Machinale Lux) 11 1.3.4 Finishing Luxury (Afwerken Lux) 12 1.3.5 CNC chisel centre 12 1.3.6 Manual Additions (Handmatige Toevoegingen) 12 1.3.7 Spray Coater (Spuiterij) 13 1.3.8 Final Assembly (Afmontage) 13 1.3.9 Shipping (Expeditie) 13

Chapter 2: Research plan 15

2.1 Introduction 15

2.2 Reason for this research 15

2.3 The problem definition 16

2.3.1 Research objective 16 2.3.2 Research question 16

2.4 Sub-questions 17

2.5 Segmentation of the research 18

2.6 Theoretical framework 18

2.7 Conceptual model 21

2.8 Research method 21

Chapter 3: Production process and planning and control 24

3.1 Introduction 24

3.2 The production process 24

3.2.1 Departments 24 3.2.2 Customer Order Decoupling Point 25

3.2.3 Characterization of the production process 25 3.3 The planning and control of the production process 26

3.3.1 Work order release 27 3.3.2 Detailed work order planning 27 3.3.3 Capacity assignment and variation 27 3.3.4 Issue of work 28

3.4 Planning and control at Weekamp 28

3.4.1 Work order release 28 3.4.2 Detailed work order planning 28 3.4.3 Capacity assignment and variation 28 3.4.4 Issue of work 29

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Chapter 4: Processing times 31

4.1 Introduction 31

4.2 Variance Analysis 31

4.3 The processing times per department 32

Chapter 5: Inefficiencies identified 34

5.1 Introduction 34

5.2 Work Samples 34 5.3 Value-added focus and elimination of waste 35 5.3.1 Waste of producing defects 36

5.3.2 Waste in transportation 36

5.3.3 Waste of waiting time 36

5.3.4 Waste in processing 37

5.3.5 Waste of motion 37

5.4 Results of Work Sampling 37

5.4.1 Mechanical Luxury 38

5.4.2 Finishing Luxury 39

5.4.3 CNC chisel centre 39

5.4.4 Manual Additions 40

5.4.5 Spray Coater 41

5.4.6 Final Assembly 42

5.4.7 Shipping 42

5.5 The costs of inefficiency 43

5.6 Conclusion 44

Chapter 6: Causes of inefficiency and possible improvements 46

6.1 Introduction 46

6.2 A department elaborated 46

6.3 Possible problems 47

6.4 Causes of waste and possible improvements 48

6.4.1 Waste in transportation 48

6.4.2 Waste from producing defects 53

6.4.3 Waste of motion 56

6.5 Conclusion 58

Chapter 7: Conclusions and recommendations 60

7.1 Introduction 60

7.2 Conclusions 60

7.3 Recommendations 63

7.4 Reflection on the research 63

References 65

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hapter 1: Weekamp Deuren B.V.

1.1 Introduction

This chapter gives a general introduction into the organisation in which this research is conducted. It first gives a quick overview of the history and the organizational structure of the organisation .It furthermore gives a description of the production process that takes place.

1.2 The organization

Weekamp has been a producer of wooden doors on the Dutch market for more than 25 years. It began in 1978 when the brothers Weekamp started a factory where they made stairs, windows and doors. In 1985 they decided to specialize on making doors only.

Currently Weekamp is one of the biggest door producers on the Dutch market, with 130 employees in the Netherlands and additional production facilities in the Czech Republic and Indonesia. Weekamp Deuren B.V. is the organizational part of Weekamp and Weekamp Productie B.V. is the production part of Weekamp. Both departments are part of Reesthout B.V., the coordinating organization. Weekamp Deuren B.V. has a department of Sales, R&D, Administration, Order Processing, Marketing, Planning &

Logistics and Purchase. The sales department is divided into Sales Commerce and Sales Industry, where Sales Commerce mainly sells to stores and Sales Industry mainly sells to building companies and wood factories. Weekamp Productie B.V. is divided into the departments ZKTP (Very Short-Term Planning), Mechanical SD, Mechanical Luxury, Finishing Luxury, CNC chisel centres, Manual Additions, Spray Coater, Final Assembly and Shipping. Weekamp has four production locations, one in Dedemsvaart, the Netherlands, one in the Czech Republic and two partners in Indonesia, that produce for Weekamp. The organizational chart can be found in appendix 1. This organizational chart is the situation without the foreign production locations. The executives are put into the chart with their initials.

1.3 The production process

Weekamp divides their doors into five segments. These segments are the Balcony doors (Stapeldorpel deuren), the Stabilized doors (Stabiel deuren), the Luxury doors (Luxe deuren), the Ornament doors (Vroeg Nederlandse modellen) and the Living Doors®. At this moment Balcony doors, Luxury doors, Ornament doors and Living Doors® are still produced in Dedemsvaart, but this will change to only non-standard Luxury, Ornament and Living Doors. Next to that, all new models and test models will be produced in Dedemsvaart. In the Czech Republic they produce the Stabilized doors and the Balcony doors at this moment. This will change to the production of all standard Luxury and Ornament and all-non-standard Balcony and Stabilized doors. In Indonesia Weekamp has two partners that produce doors for Weekamp. These doors are used as stock items in

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Dedemsvaart. The partner in Djakarta makes basic Balcony and Living Doors for Weekamp and the partner in Medan produces basic Balcony and Luxury Doors. The doors from Indonesia and the Czech Republic will be finished off in Dedemsvaart according to the wishes of the customer. The production process will be discussed for each department. A drawing of a door with the most common parts, to make the description of the production processes more clear, can be found in appendix 2. Besides these descriptions of the production process, a global flowchart can be found in figure 1.1 and the routings of the several products can be found in appendix 3.

1.3.1 Mechanical SD (Machinale SD)

At the department mechanical SD, the production of semi-finished products and the assembly of the door takes place for Balcony doors and windows. The production process starts with the shortening and planing (korten en schaven) of the wooden girders. The wooden girders are shortened and planed at the right size here. After this, the products are first transported to a stock area. From there the stiles (stijlen) are going to the line chiselling machine (meerkoppige gatensteek) and the thresholds (dorpels) are transported to the tenon profiler (pennenbank). The line chiselling machine mortises (steekt de gaten) the stiles. All the holes are mortised at the same time. After this, the stiles are moulded (frezen van profiel). At the tenon profiler, the tenons (pennen) are struck on the threshold and a groove and tongue (groef en veer) is moulded on the threshold. The haunches (spatpennen) are also diminished (menageren) here. After these operations the thresholds are fitted with cellular tape, the groove and tongue are treated with a coating and slot outlets (ventilatiesleuven) for the glass system are mortised. The treatment with coating only happens with parts made out of merbau wood, because merbau wood “bleeds” when it gets wet. This means that red fluid runs out of the wood when it gets wet. Then all parts are ready for assembly. The parts that have to be put together are covered with glue and then the stiles and thresholds are assembled to one door. Afterwards superfluous glue is removed and after a short time of drying, the door can be sanded in the sanding machine (schuurmachine). After this, the door is ready to go to the next department, the CNC chisel centre.

1.3.2 Stabilized doors

The Stabilized doors are all made in the Czech Republic, till the point of the operations on the CNC chisel centre. From that point, they are processed in Dedemsvaart. The process of making a Stabilized door starts with the assembly of a frame that consists of stiles and thresholds made of spruce. On top of this frame, the first plywood plate, covered with glue, is placed and attached with nails. Then the door is turned and the filling will be placed. This can be spruce, foam or cork, depending on which type of Stabilized door is made. Then the second plywood plate, covered with glue, is placed and attached with nails. After a treatment with the sanding-machine, the door is ready to be transported to Dedemsvaart for further operations.

1.3.3 Mechanical Luxury (Machinale Lux)

At the Mechanical Luxury department all Luxury, Ornament and Living doors are produced up to and including the assembly of the door. The process starts, like the

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production of Balcony doors, with the shortening and planing of wooden girders. The stiles and thresholds are then stored in a stock area on the work floor. Because of the customer-specific character of these products, the stiles and thresholds are marked out (aftekenen) with all the production steps till the assembly of the door. This provides that everyone knows what has to be done with that part of the door and which parts belong together. After the marking out, the thresholds first go to the tenon profiler and the stiles go to a single chiselling machine (enkelvoudige gatensteek). This is the beginning of the mechanical production of Luxury, Ornament and Living doors. Which operations will follow, depends on the model of the door that is being produced at the time. Other operations that can be done at this part of the production process are the moulding of a rebate 10mm (groef 10mm), a rebate 16 mm, a slot 8 (groef 8), a cambering (toog), the striking of haunches, the diminishing of haunches, sawing with the band saw, treating merbau wood with coating, using the tisch spindle moulder (spatpengroeffrees) for the stiles. Next to the stiles and thresholds, a Luxury or Ornament door can consist of wooden or MDF panels and glazing beads. The parts that are needed are transported to Assembly and will be put together there. Panels are assembled here most of the times, but that depends on the way they are locked in. Glazing beads are being put on later on in the process. First the parts are covered with glue on the areas where they will assemble and then they are pushed together with the frame press. Afterwards the superfluous glue is removed and the door is sanded with the sanding machine. The door is now ready for the next department, Finishing Luxury.

1.3.4 Finishing Luxury (Afwerken Lux)

After the sanding some parts will be added or made manually. For the Luxury, Ornament and Living Doors this is done at the department Finishing Luxury. These additions are things such as decorative frames, glazing beads or wooden panels. Next to these additions, the employees on this department also sandpaper the doors additionally, fill up holes, and remove glue and sealant from the door. After this the door is ready for the operations on the CNC chisel centre. This department will be positioned behind the CNC chisel centre and work more closely with Manual Additions in the near future.

1.3.5 CNC chisel centre

The following operation(s) in the production process for all the doors is taken care of at the CNC chisel centres. Here are operations carried out with all kinds of cutting tools, such as moulding mailboxes, drilling holes, grooving hinges (scharnierinkrozingen), sawing the door in the right size, sawing glass openings, drilling the cylinder hole (cilindergat) and the crank hole (krukgat) and moulding the casing of the lock (slotkast).

1.3.6 Manual Additions (Handmatige Toevoegingen)

Before the door is going to be spray coated, some parts have to be added manually. These are parts that were not already placed at Finishing Luxury or parts that have to be added to Balcony or Stabilized doors. Operations that can occur are the assembly of a water bar (weldorpel), the final sawing of glass openings, the sandpapering of right angles, the assembly of decorative frames, the making of the glazing beads and repairing damage to the door. When grooves are made in stabilized doors by the CNC chisel centre, they have

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to be sandpapered manually and treated with lacquer. The mortising of slot outlets for the glass systems is also done by this department. When a door is completely finished, it is suspended to go to the spray coater.

1.3.7 Spray coater (Spuiterij)

The spray coater of Weekamp works with water based paint, which is obligatory since March 2004 in the Netherlands. Before the doors are treated, the dust has to be removed.

Then, the doors are sorted according to whether they need a covering or transparent coating. The doors are primed and finished according to the work instructions.

Doors that will get a covering layer of paint go through the flow coater first, transparent doors are pre-sprayed. The flow coater is a sort of shower of white primer, which gets into every nerve of the wood. Merbau wood gets this treatment twice to be protected against bleeding. After the flow coater, the doors pass a drying room.

All doors are sandpapered after they have been through the drying room. The doors are checked for damages and irregularities and repaired with filler if possible. In case of luxury doors, the panels, grooves of the single duet doors and v-grooves need to be puttied with white tiokol putty. There are two finishing levels used; the primer coating and the pre/finish-coating. For doors that are only treated with a primer coating nail holes are filled with putty and raw patches are sandpapered. Wormholes are allowed unless they appear spread over the door. Cracks are also allowed unless they are deeper than 10mm, wider than 0,5mm or longer than 300mm and unless there are more than one per stile or threshold or they are at the side of the door. If doors are treated with a prefinish- or a finish-coating all nail- and wormholes have to be filled with putty and raw patches have to be sandpapered. Cracks are allowed unless they are deeper than 1mm, wider than 0,5mm or longer than 300mm and they can be maximal 25 percent of the surface length of the threshold or the stile. The doors need to be finished with the colour indicated on the spray label. This layer is sprayed on the door by hand. After this treatment the doors has to dry for at least three hours before other operations can be done.

1.3.8 Final Assembly (Afmontage)

After the spray coater the door is transported to Final Assembly for the next step in the production process, the finishing of the doors. This departments starts with a global quality check, where the door is checked for big failures and damages. After this, several finishing operations can be executed. Glass can be inserted, locks and hinges can be assembled and glazing beads can be attached to the door. At the end the door is checked intensively for quality failures, damages and mistakes. If the door meets the required quality, the door is transported further to the shipping department. If there are some minor damages the door is repaired right away, and then transported further to the shipping department. When a door has major damages, failures and/or mistakes the door is temporarily stored, waiting for repair.

1.3.9 Shipping (Expeditie)

At the Shipping department all doors are grouped by day of delivery. Every day of the week has its own number, and every zip code has its own day of delivery. Before the doors can be sent to the customer, they first need to be packed in some way. There are

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three ways that doors are packed. Luxury doors are sealed in individually, other doors with a primer coating are piled up a pallet board and doors with a pre/finish-coating are placed in a crate. After this, the doors are ready to be transported to the customer with one of the trailer trucks.

Mechanical SD

Mechanical Luxury

CNC chisel centres

Manual Additions

Spray Coater Final Assembly

Shipping Finishing

Luxury

Fig. 1.1 Flowchart Production

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hapter 2: Research plan

2.1 Introduction

In this chapter a description is given of the approach chosen within this research. This chapter starts with the description of the reason for this research. Then the formulation and justification of the research objective and research question is discussed together with the restrictions of the research, followed by the segmentation of the research. In this chapter the used literature and the used method of the research are also discussed.

2.2 Reason for this research

The reason for this research at Weekamp is the level of the costs of producing doors in the Netherlands. The cost prices of several operations that can be executed to produce a door are higher than the average selling price of those operations. There are operations that can be bought in the market individually, like the painting of a door and the inserting of glass in the door. For some of these individual operations the average selling price in the market is lower than the cost price of these operations at Weekamp Deuren. It is, for example, sometimes cheaper to hire a glass setter that will insert the glass into the door than to buy a door at Weekamp were the glass is already inserted.

The first approach that Weekamp used to deal with this problem was to move part of the production process to foreign countries. Weekamp opened an own production facility in the Czech Republic and started working with two partners in Indonesia. The logic behind this movement is that labour in those countries is cheaper than in the Netherlands and the labour costs cause the biggest part of the costs of a product. By reducing the labour costs, the cost price of the doors will also go down. These foreign production facilities of Weekamp are used to produce the standardized products. The customer-specific products are still produced in the Netherlands, and also the finishing of the doors is done here. Because still a part of the production process is present in the Netherlands, the high labour costs are a reason to conduct a research on the current way of producing at Weekamp in the Netherlands.

The management of Weekamp suggests executing time measurements, so new standard times for each operation can be determined. The standard times within Weekamp are used for the planning of the available capacities in the production process and for the calculation of the cost prices of the products. The cost price consists of the cost of material, the cost of labour and the indirect costs. The cost of labour is based on the standard times of the operations that are needed to produce the specific door of which the cost price is being calculated. The current standard times are out-of-date and do not give a realistic image of the actual time needed for the operations. In this situation at Weekamp unrealistic standard times cause unrealistic cost prices and therefore cause unrealistic selling prices. By adjusting the standard times to the present production situation, the cost prices will get more realistic.

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Another way to deal with the high costs is to improve the efficiency of the production process. By improving the efficiency of the production process more products are made at the same costs or the same amount of products are made at lower costs.

Because the labour costs are the most influential costs in this situation, the main emphasis lies on the efficiency of the employees. The improved efficiency has a positive effect on the labour costs per product and therefore has a positive effect on the cost price of the products.

2.3The problem definition

The problem definition consist of three components¹; the research objective, the research question and the restrictions of the research. The research objective and the research question are formulated within this paragraph and divided into sub-question in paragraph 2.4.

2.3.1 Research objective

The research objective establishes for whom the research is being done, what will be the result and why this is relevant for them². The research objective is formulated in the following way:

2.3.2 Research question

The research question formulates the main question of the research, which fits the research objective³. The research question is formulated in the following way:

In the research objective it is established that this research is conducted for the management of Weekamp Deuren and that it leads to recommendations for possible improvements that can increase the efficiency at Weekamp Deuren. To be able to give recommendations, the level of efficiency should first be determined. When this level of efficiency is determined, the causes of possible inefficiencies should be researched to be able to find ways to improve the efficiency. In this research efficiency is seen as the

1 Leeuw, A.C.J. de, “Bedrijfskundige Methodologie; management van onderzoek”, page 81

What is the level of efficiency per department in the production process, what causes this possible inefficiency and what can be changed to improve the efficiency level per department?

The main objective of this research is to evaluate the production process of Weekamp Deuren in order to make a judgement on its efficiency as well as to give

recommendations to the management of Weekamp Deuren for possible improvements that can increase this efficiency.

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difference between the actual labour hours of a department used over a year compared to the total labour hours a department should use according to a standard.

2.4Sub-questions

In order to be of more guidance the research questions are divided into sub-questions.

These sub-questions all cover their own part of the research. The accumulation of the answers on those sub-questions lead to the answer of the research questions.

The research starts with a description of the production process and the planning and control of that process. The description focuses on Weekamp Production B.V. and the Planning and Logistics department of Weekamp Deuren B.V. Other departments of Weekamp Deuren B.V. are left out of the research as much as possible. Only the sections of these departments that affect the production process and the planning and control of this process are directly taken into account. The description leads to a clear picture of the organization and can give a first indication of the areas were problems occur. Because the problems can occur in the production process as well as in the planning and control of that process, both areas are described in this part of the research. Therefore the following sub-questions are formulated:

Ì How can the production process be segmented into operations, and what do these operations consist of?

Ì In what way are the operations planned and controlled on the department level?

After the general description of the production process and the planning and control of that process, the production process is analyzed further to identify the efficiency-level for each department. In this research efficiency is seen as the difference between the actual labour hours of a department used over a year compared to the total labour hours a department should use according to a standard. The first step to identify the efficiency- level of each department is to identify the operations that are operated at each department.

The processing times of each operation at Weekamp Deuren are measured and to indicate the efficiency-levels the measurement are compared to the actual time used by each department over a year. Therefore the following sub-questions are formulated:

Ì What are the processing times of different operations at Weekamp Deuren?

Ì What was the actual time needed for each department in 2003 according to subsequent calculation and what is the expected time needed according to the processing times measured?

When the efficiency-levels per department are identified, the kinds of inefficiency and the causes of the inefficiency should be determined. First the different kinds of inefficiency that can exist should be determined and afterwards it should be investigated which of these inefficiencies are present at Weekamp Deuren. With the help of the Work Sampling technique the percentages of time that employees spend on the different kinds of actions that are recorded. Based on these percentages the time spent on the different inefficiencies and the costs of these inefficiencies are determined. Therefore the following sub-questions are formulated:

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Ì Which kinds of inefficiencies can exist in a production situation and which of these inefficiencies are present in the production process of Weekamp Deuren?

Ì How much time is lost by the several inefficiencies and what are the costs of the several inefficiencies in the production process?

After identifying the different kinds of inefficiencies per department and the time and costs that are spent on these inefficiencies, one department is investigated further. The research focuses on only one department from this moment on to be able to make a more thorough analysis of the situation. For this department the causes of the inefficiencies that are present are examined and possible improvements are researched. This leads to recommendations for possible improvements. Therefore the following sub-questions are formulated:

Ì What are the causes of the several inefficiencies in the production process?

Ì How can the most costly inefficiencies of the production process be improved?

2.5 Segmentation of the research

This research is divided into four phases. The first phase is used to create a clear picture of the organization and the production process where the research is conducted.

The second and third phase of the research analyze the production process. The second phase is an analysis which results in an indication of the efficiency level of each department of Production. This is done based on measurements of the processing times and leads to an insight into the time required for each operation. It also gives insight into the actions that are part of each operation and which operations are performed at each department. The third phase goes deeper into the results of the second phase. With the help of Work Sampling the efficiency levels are specified and different types of inefficiency are distinguished.

Afterwards the causes of these several kinds of inefficiencies are researched with the help of literature, interviews and observations. This leads to recommendations for possible improvements for one department on how efficiency can be improved in phase four.

These recommendations can also be used as a guideline for possible improvements at other departments.

The focus within this research is on the analysis. It results in a number of recommendations, based on the analysis, on which the organization can base further actions to improve the efficiency of the production process.

2.6 Theoretical framework

The theoretical framework indicates from which points of view the reality are researched.

The different theories and concepts that are used present the presuppositions on which this research is based. A further explanation of the used theories and concepts can be found in the chapters where they are used.

In this research the efficiency of the several production departments is investigated. In this research efficiency is seen as the difference between the actual labour hours of a department used over a year compared to the total labour hours a department should use according to a standard. The operations done in the working hours are meant to add value to the product. Other activities do not directly add value to the product and

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are therefore inefficient. The principle of value is therefore very important in this research.

In harmony with the basic principle of value in this research the main theoretical framework is the Value Analysis approach. This approach is described by J.M. Nicholas in chapter 2 of his book “Competitive Manufacturing Management”. The Value Analysis approach provides the basic structure of the research. The goal of the Value Analysis is to assess the value content of the elements of a process. All production and support activities add to a products cost, but not all add to its value. Value Analysis looks at how much value something adds compared to the cost it adds⁴. The first step in the Value Analysis is the gathering of information. In this step information about costs, requirements and features of the elements that will be evaluated is collected. The next phase is the analysis phase, where the function the element serves is studied. In the creation phase ideas are generated for alternative ways to serve the same functions. In the evaluation phase the costs and the ability of the alternative to fulfil these functions are examined. The last phase is the implementation phase, where the selected alternative is implemented. This research focuses on the first three steps of the Value Analysis approach.

To describe the production process a characterization is made of the process according to the complexity of the capacity and variety of routings and the complexity of the material structure. With the help of these two factors, five most common kinds of production situations can be determined according to Bertrand, Wortmann and Wijngaard⁵. Another concept that is used for the description of the production process is the Customer Order Decoupling Point⁶. The Customer Order Decoupling Point is the point in production where the order of the customer gets influence on the production process.

The BWW-framework, described by Bertrand, Wortmann and Wijngaard in their book “Productiebeheersing en material management”, is used for the description of the planning and control of the production process. This framework describes the different levels of planning and control in relation with the production process. The planning and control is taken into the general description of the organization, because the planning and control of the production process can be one of the causes of inefficiencies according to Nicholas⁷.

To describe the operations and to make a distinction between efficient and inefficient operations, Nicholas uses the value-added focus and the elimination of waste⁸. First, a distinction is made between value-adding and non-value-adding activities and elements. Afterwards the non-value-adding activities are than divided into necessary and unnecessary activities and elements. These unnecessary non-value-adding activities and elements need to be eliminated from the process. These activities and elements can be

4 Nicholas, J.M., “Competitive Manufacturing Management”, page 46 - 47

5 Bertrand, J.W.M., J.C. Wortmann and J. Wijngaard, “Productiebeheersing en material management”, page 109 - 113

6 Bertrand, J.W.M., J.C. Wortmann and J. Wijngaard, “Productiebeheersing en material management”, page 40

7 Nicholas, J.M., “Competitive Manufacturing Management”, page 144

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classified into seven wastes, which where first identified by Toyota and first described by Taiichi Ohno. These wastes are: waste from producing defects, waste in transportation, waste from inventory, waste from overproduction, waste of waiting time, waste in processing and waste of motion. Only the sources of waste that influence time that is available for the processing should be used in this research, while the other sources are out of the scope of this research. Therefore waste from inventory, for example, is left out of the research, while inventory negatively affects the lead time, not the time that is available for processing.

For the analysis of the efficiency of each department the ‘variance analysis’⁹ is used. With this classical management accounting approach price and quantity variances can be calculated. In this research only the quantity variances in used processing time are investigated. The formula for a quantity variance in the variance analysis is (Actual Quantity x Standard Price) – (Standard Quantity x Standard Price)¹⁰. The actual quantities in this research are derived from the total used labour hours over 2003. The standard quantity is derived from the time measurements that are conducted in this research. The variance analysis is chosen because efficiency can be seen as the difference in quantity between the net standard time and the actual time.

After this analysis of the efficiency level per department, the types of inefficiency should be examined further. A way to do this is the work sampling method. Work sampling is, like Jenkins and Orth describe it in their article Productivity Improvement Through Work Sampling “a series of instantaneous observations of work-in-progress taken at random times over a period of time”. One of the main advantages of work sampling is that it provides an easy, inexpensive and quick way to analyze the productivity of a large number of workers on the site rather than limiting continuous observations to a small group of workers. Additionally, because of the random nature of the work sampling method, observations are considered less noticeable and pushy to workers than by using a constant observation method. Furthermore, workers are more inclined to cooperate with the work sampling method since the results focus on the work performance by workers as a whole, rather than singling out individual performance.

Acceptance of the method is also better because of the fact that stopwatches or other timing devices are not used¹¹. Because of these reasons work sampling was found more suitable for the analysis of efficiency in this research than for example continuous time studies or motion studies.

Theories about Just-In-Time Production and Lean Production are used to find ways to deal with these kinds of waste and to eliminate the unnecessary non-value-adding operations. Just-In-Time Production and Lean Production are theories about organizing the production process in such a way that the product flows smoothly through the process and wastes of time are minimized or even eliminated. These insights can also be used to find ways to deal with the inefficiencies at Weekamp Deuren.

9 Garrison, R.H., E.W. Noreen & W. Seal, “Management Accounting”, page 494 - 518

10 Garrison, R.H., E.W. Noreen & W. Seal, “Management Accounting”, page 501

11 Jenkins, J.L. and D.L. Orth, “Productivity Improvement through Work Sampling”, from Cost Engineering, volume 46, number 3, march 2004, page 27 – 32

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2.7 Conceptual model

A conceptual model in a research represents the global view that lies at the basis of the research¹². The conceptual model of this research can be found in figure 2.1 and is based on paragraph 2.7. It shows the central framework of the Value Analysis and its relationship with other theories and concepts that are used in the research as it is described in the theoretical framework in paragraph 2.7. The relationship between the used theories and the segmentation of the research is also made clear with the help of this conceptual model.

2.8Research method

In this paragraph the used methods in this research is explained to back up the reliability of the research. A research is reliable if iterative research provides the same results while the circumstances have not changed¹³. First the methods of information gathering are discussed briefly for each research phase. Afterwards each method of information gathering is discussed more thorough.

The research starts with a description of the history of the organization, the production process and the planning and control of the production process. Information in this part of the research is gathered through interviews, observations, internal documents and the homepage of Weekamp Deuren. This can be found in chapter 1 and chapter 3. In chapter 1 the history of the organization, the departments of Weekamp Production B.V.

and a first description of the production process are given. In chapter 3 the production process is discussed further in relation to the planning and control of the production process.

The second phase of the research is the analysis of the efficiency of the production process per department. The information in this phase of the research is gathered through time measurements. This information is analysed with the use of the variance analysis. This can be found in chapter 4.

The information in the third phase of the research is meant to identify the several types of inefficiency that are present in the production process of Weekamp Deuren. To be able to identify those types of inefficiency the Work Sampling method is used. This phase is described in chapter 5 of this thesis.

The last phase of the research consists of the researching of the sources of the inefficiencies of one of the production departments at Weekamp Deuren. This leads to recommendations for possible improvements of the efficiency. The information in this phase of the research is gathered through interviews and observations. The outcomes of this phase are described in chapter 6.

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The interviews that are conducted to gather information throughout the research were semi-structured and were conducted individually. Employees that are interviewed are the head of Production, the head of the department Planning & Logistics and the foremen of the production departments. For each interview an introduction and a list of subjects that should be discussed is made. An exact elaboration of the subjects into a fixed set of questions is not made to be able to go more deeply into the subject and react on answers

Value Analysis

Information gathering

Analysis

Creation

Evaluation Implementation

Research

General description of the production process and its planning &

control

Time measurements of the operations

executed at Weekamp Deuren

Efficiency levels per department

Determining types of inefficiency that are present at Weekamp Deuren

Recommendations for possible improvements of efficiency

Customer Order Decoupling Point

Characterization of production

process

BWW-model

Work Sampling Variance analysis

Types of waste form Toyota’s Seven Wastes

Just-In-Time principles

Lean Production principles Sources of inefficiency

at Weekamp Deuren

Fig. 2.1. Conceptual model

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of the interviewee. The framework and the results of the interviews can be found in appendix 4.

Observations are made during the whole duration of the research. Through observations general information of the production process and the organization can be gathered, but also information from other sources can be verified through observations.

Internal documents can be a helpful information source, as well as the homepage of the organization. In the quality manual describes all operations and the desired quality levels. On the internal information system general information could be found, like organization charts, flow-charts, the history of the organization and the product range.

Some of this information could also be found on the homepage of the organization.

The time measurements are conducted to determine standard times for each operation in production. The first step is to specify all operations for each department.

When all operations are specified for each department, a number of measurements have to be conducted for each operation. These measures are conducted at various moments of the day at various employees to get a reliable picture of the real situation. The problem with these time measurements is that some operations are very rare, especially operations that are specific for customer-specific doors. This causes that some operations have only a few or even no time measurements at all. The segmentation into operations and the results of the time measurements can be found in appendix 5 and are discussed in chapter 4.

To identify the types of inefficiency that are present at the production process the Work Sampling method is used. The first step of is to classify the possible activities of employees. This classification is based on the value-added focus and the seven wastes of Toyota¹⁴. The operations that were specified by the time measurements are classified as value-adding activities. The remaining non-value-adding activities can be divided into necessary non-value-adding activities and unnecessary non-value-adding activities.

Necessary non-value-adding activities are activities that do not add value to the product, but that are necessary to be able to perform the value-adding activities. The unnecessary non-value-adding activities are than further divided into the different types of waste that were first identified by Taiichi Ohno at Toyota. The Work Sampling method is discussed and used in chapter 5 and the results can be found in appendix 6.

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hapter 3: Production process and planning and control

3.1 Introduction

This chapter provides a comprehensive description of the production process at Weekamp Deuren. Chapter 1 gave a picture of the history of the organization together with a description the actors and the different steps in the production process. In this chapter the production process is described further with the help of theoretical support. Next to the description of the production process, the planning and control of this process is examined. This is done, because possible problems with the efficiency of production can occur in the production process as well as in the planning and control of that process.

In paragraph 3.2 the Customer Order Decoupling Point and a characterization of the process according to the literature of Bertrand, Wortmann and Wijngaard¹⁵ is discussed to give a theoretically based description of the production process. In paragraph 3.3 the decisions of planning and control at the department level is discussed briefly. In paragraph 3.4 the interpretation of these decisions at Weekamp is described.

The information about Weekamp that is used in this chapter comes from observations as well as interviews with foremen in production, employees of the Planning and Logistics department and employees of ZKTP. A brief summary of these interviews can be found in appendix 4.

3.2The production process

In this paragraph the production process is further analyzed. In chapter 1 the first description of the process is given, segmented by type of door. Here a broader typology of the process is described. First the departments that can be distinguished at Weekamp are briefly discussed. The point of influence of the customer is than conducted. To conclude, the production process is characterized by describing the complexity of the capacity used and the complexity of the materials needed.

3.2.1 Departments

Production can be divided into ten departments; ZKTP, Mechanical Luxury, Mechanical Balcony, CNC chisel centre, Finishing Luxury, Manual Additions, Spray Coater, Final Assembly, Final Control and Shipping. Each department has its own set of operations for its own kind of doors. ZKTP can be seen as the planning and control for Production.

They have close contact with Planning and Logistics to make sure there is harmony between Production and Sales. Mechanical Luxury makes the semi finished products for the Luxury doors, the Living Doors and the Ornament doors, and they are assembled together on this department. At Mechanical Balcony the same happens for the Balcony doors. Other doors are made elsewhere and are available in stock at Dedemsvaart or can be transported within a day. At Finishing Luxury the Luxury doors, Living Doors and

C

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Ornament doors are finished off with decorative frames, glazing beads, water bars etcetera. The same happens for Balcony and Stabilized doors at Manual Additions. The other departments serve all the types of doors.

3.2.2 Customer Order Decoupling Point

The Customer Order Decoupling Point (from now on CODP) is the point in production where the order of the customer gets influence on the production process. Before the CODP, everything is produced in stock. After the CODP production is linked to the customer order, and all operations are specific for this order¹⁶. In the production process of Weekamp Deuren there are three different CODP-points. At first there is complete make-to-stock production. Most of these doors are delivered straight from the warehouse to the customer, within 24 hours. Weekamp also produces according to make-to-order.

These are the Luxury doors that are completely drawn and produced according to the wishes of the customer. The third way of producing that can be found at Weekamp Deuren is some sort of assembly to order, where the assembly is the adding of extra features to the door, such as locks, hinges, paint, etc. These doors are taken out of stock and are finished at the CNC chisel centre, the spray coater and final assembly. In Dedemsvaart all operations except the procurement of materials and the shortening and planing lie behind the CODP. Other production steps that lie before the CODP are done in Indonesia or the Czech Republic.

3.2.3 Characterization of the production process

According to Bertrand, Wortmann and Wijngaard¹⁷ a production process can be characterized by five most common kinds of production situation. The two factors that are important in this characterization by Bertrand et al are the complexity of capacity and variety of routings and the complexity of the material structure. The characterization can be seen in figure 3.1. Other production situations occur in practice, but this characterisation gives examples of common combinations.

16 Bertrand, J.W.M., J.C. Wortmann and J. Wijngaard, “Productiebeheersing en material management”, page 40.

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The production process at Weekamp in Dedemsvaart can be characterized as single piece or small lot production. Especially the Luxury and Ornament doors have a low recurrence level, which results in the situation that capacities are not specified for certain products. The only specialization that is present is made at the Mechanical department where Balcony doors and Luxury, Ornament and Living Doors are separated.

The variety of routings is also high because of the changing operations that have to be executed for different doors. These routings only vary within the different departments of Production. The routing between departments is the same for the greater part of the doors.

This means that the complexity of capacity at Weekamp is fairly high. The complexity of materials is described by Bertrand et al as the number of different materials and components that is needed for a production order. A door at Weekamp is built up out of 4 to 20 components. Most of the materials used for the door are common and can be used for all door models. The main points of variation between different door models are the number of materials used and the shape of the material. For example, a completely different model appears when a threshold is added to the door. Therefore the complexity of materials is not really high. Combining these two kinds of complexity Weekamp Deuren is placed close to the production situation of small lot production.

3.3 The planning and control of the production process

To describe the planning and control of the production process, the BWW-model of Bertrand, Wortmann and Wijngaard¹⁸ is used. This model shows the different levels of control for a production process. The first segmentation in level of control is the difference between control at department level and control at factory level.

In complex production processes, there are six major operational decisions that can be distinguished in relation to the planning and control. These decisions are: the planning of capacity utilization; the work order acceptance and delivery time promising;

Fig. 3.1 Characterization of production process Single piece/small

lot production of components (job

shop)

Project assembly

Batch production

Process/

continuous production

Mass assembly high

high low

low

Complexity of capacity

Complexity of materials WEEKAMP

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the work order release; the detailed work order planning; the capacity assignment and adjustment; and the issue of the work. The first two decisions are part of planning and control at factory level, the other four decisions are part of planning and control at department level. In this research the planning and control on factory level is left outside the research. The reason for this is that planning and control on factory level is usually long-term planning and control. This doesn’t affect the efficiency levels at Production as much as the planning and control on department level, which is usually short-term. The departments that are taken into account here are the departments of Production (ZKTP, Mechanical SD, Mechanical Luxury, Finishing Luxury, CNC chisel centres, Manual Additions, Spray Coater, Final Assembly and Shipping) and the department Planning and Logistics.

The four decisions affecting the planning and control on department level are briefly explained in paragraph 3.2.1 till paragraph 3.2.4. In paragraph 3.3 the planning- situation at Weekamp is explained and the decisions are elucidated within that situation.

3.3.1 Work order release

Accepted orders can differ in promised delivery time and lot size. Work order release is the function that converts customer orders into work orders, which can be released for production at the departments. The work order release decision focuses on the operational control of the amount of work in process in relation to the available capacity and material, in such a way that the lead time of released orders is under control.

3.3.2 Detailed work order planning

Inside a department there can be one or more bottleneck-capacities and it is possible that there are special requirements for the time schedule of operations of an order. This leads to a plan for each order in which the progress of the order is scheduled.

3.3.3 Capacity assignment and adjustment

Often a capacity per operation or per resource can temporarily be expanded or cut down on department level. Most of the times this happens by changing the deployment of employees through different operations (“worker exchange”) or by hiring and firing temporary personnel. By doing this a department can cope with a stream of orders with changing volumes and a changing composition. There are two kinds of flexibility that can be created in this way; volume-flexibility and mix-flexibility.

Volume-flexibility means that a department is able to change the amount of products they produce or the hours they work from time to time. In case of the control on department level, the only volume-flexibility that is interesting is the volume-flexibility that can be used to respond in short time on progress disturbances. This volume- flexibility does not provide more products than ‘normal’, but it makes sure that the

‘normal’ amount of products can be produced.

Mix-flexibility concerns the ability to change the mix of products within a product-family at a given volume. There is a high mix-flexibility when all product types demand the same capacity. The ability to change the capacity per type of capacity on the

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short run is called capacitive mix-flexibility. This capacitive mix-flexibility is an important factor to realize simple control.

3.3.4 Issue of work

Given the progress of the orders in a department and given the available flexible capacity, a decision should be made about the order of the present and the coming orders should be processed at each workstation.

3.4 Planning and control at Weekamp

The planning and control cycle at Weekamp starts at the department Planning and Logistics. At this department a global planning is made according to the available capacity and the customer orders. This leads to an assignment of hours to each department of Production. In the next paragraphs the rest of the planning and control cycle is discussed in relation to the decisions affecting planning and control on departmental level. This process can also be found in figure 3.2, which is based on the BWW-model¹⁹.

3.4.1 Work order release

The department of Planning and Logistics delivers this assignment of hours, together with work orders, to ZKTP on set times, depending on the number of shifts the department is working in. At ZKTP the technical feasibility is checked, but most of the times the original planning is maintained. They do add all repair and urgent orders to the work orders. According to this planning, the racks are arranged and provided with a day code.

This can be seen as the work order release decision from the BWW-model. These day codes give an indication when the door should be processed at which department. A day code runs from 12.00 o’clock the first day till 12.00 o’clock the next day. Mechanical SD en Luxury work with a planning of two and a half day code, all the other departments till the Spray Coater work with a single day code.

3.4.2 Detailed work order planning

Within the planning of production, the utilization of the CNC chisel centres is leading for the rest of Production. These machines need to be occupied as much as possible.

Sometimes even at the cost of maintenance. The adaptation of the planning of other departments to the planning of the CNC chisel centres can be seen as the detailed work order planning decision of the BWW-model.

3.4.3 Capacity assignment and adjustment

Each day the foremen and head of Production have a meeting. Here the production figures of the last day are discussed as well as the planning for the coming day. The complement of the department is viewed with considerations of illness or days off of employees. The available employees are than completed with temporary personnel when needed. There are some possibilities to shift employees from one department to another,

19 Bertrand, J.W.M., J.C. Wortmann and J. Wijngaard, “Productiebeheersing en material management”, page 67

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but there are limitations because of the customer specific character of the products made and the skills needed for some operations. This can be seen as the capacity assignment and adjustment decision of the BWW-model.

3.4.4 Issue of work

After these three decisions, the work orders are delivered to the foremen of the different Production departments, together with the rack number and the day code. The foremen than specify this planning for their departments. This leads to a sequence to work in and can be seen as the issue of work decision of the BWW-model.

At Mechanical Luxury and Mechanical SD the racks that cost the most time are done first. This way it is sure that these doors are finished within the planned time.

Within the department the routing past the machinery is fixed. Every rack follows the same routing, so they can not disturb each other. At the Finishing Luxury department the racks are processed according to their rack number. Within this sequence the door types are divided amongst the employees as much as possible, so that they all have the preferred as well as the disliked models to work with. With regard to the CNC chisel centres a moulding order is determined to utilize the machines as full as possible. The operator of the machines has his own responsibility to make sure the racks with doors are at his machine when they are needed. At the Manual Additions a rack order is determined by the foreman. Every employee should process every kind of door, but because they have the responsibility to get their own racks they still have some freedom with that.

Before the doors go to the Spray Coater they are hanged into the rail system. This hanging happens according to the day code. A day code has to be finished completely before they can start with the next day code. The sequences in which the doors are hanged also determine the entrance order at the Spray Coater. At the Spray Coater and at Final Assembly the doors are controlled with routing lists, but these are in practice only necessary when Production is behind schedule.

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Planning & Logistics: Assignment of hours, work orders and global capacity planning

ZKTP:

Check of technical feasibility and adding of rush and repair orders

Work order release ZKTP:

Arranging racks and providing them with day codes

Operations per department

Fig. 3.2 Planning and control on departmentlevel Detailed work order

planning P&L and ZKTP:

CNC chisel centres are leading for the rest of Production

Capacity assignment and adjustment Foremen production:

Daily meeting to discuss the complement of the departments

Issue of work Foremen production:

Rack or door order determined, based on method of the department